--- mi_id: MIPR-node_e6cfa85 type: press_release canonical_url: "https://www.pheonixresearch.com/energy-power/bio-fuels/press-release/biomass-pellets-at-eur-41-30-a-megawatt-hour-against-eur-21-85-for-chips/" md_url: "https://www.pheonixresearch.com/energy-power/bio-fuels/press-release/biomass-pellets-at-eur-41-30-a-megawatt-hour-against-eur-21-85-for-chips.md" schema: "@type": NewsArticle "@id": MIPR-node_e6cfa85 url: "https://www.pheonixresearch.com/energy-power/bio-fuels/press-release/biomass-pellets-at-eur-41-30-a-megawatt-hour-against-eur-21-85-for-chips/" title: A Megawatt-Hour of Pellets Costs EUR 41.30 and a Megawatt-Hour of Chips Costs EUR 21.85 — 47.1 Per Cent of the Biomass Fuel Market Is the Certification File description: "Biomass fuel: USD 12,345.6m in 2025 across 59.3 Mt to USD 20,660.0m by 2033 at 6.65%. Pellets clear at EUR 41.30 a MWh against EUR 21.85 for chips — 47.1 per cent of market value is the file." datePublished: "2026-11-14T17:15:40+00:00" dateModified: "2026-11-14T17:15:51+00:00" keywords: - biomass fuel market - wood pellet market size - industrial wood pellet price - palm kernel shells market - biomass fuel forecast 2033 - heating pellets Europe - biomass certification - RED III biomass isPartOf: - id: MISG-node_3d9938b type: CollectionPage url: "https://www.pheonixresearch.com/energy-power/bio-fuels/" name: Bio-Fuels - id: MIIN-node_a95ba31 type: CollectionPage url: "https://www.pheonixresearch.com/energy-power/" name: "Energy & Power" - id: MIWS-root type: WebSite url: "https://www.pheonixresearch.com/" name: Pheonix Research acf: phoenix_meta_title: "Biomass Fuel Market 2026–2033: Priced by the Certification File, Not the Flame" phoenix_meta_description: "Biomass fuel: USD 12,345.6m in 2025 across 59.3 Mt to USD 20,660.0m by 2033 at 6.65%. Pellets clear at EUR 41.30 a MWh against EUR 21.85 for chips — 47.1 per cent of market value is the file." global_schema: organization: "@id": MIWS-root#organization "@type": Organization url: "https://www.pheonixresearch.com/" name: Pheonix Research website: "@id": MIWS-root "@type": WebSite url: "https://www.pheonixresearch.com/" name: Pheonix Research api: "@id": MIWS-root#api "@type": WebAPI url: "https://www.pheonixresearch.com/" graph: node_id: MIPR-node_e6cfa85 graph_node_endpoint: "https://graph.pheonixresearch.com/api/v1/query/live/node/MIPR-node_e6cfa85" graph_snapshot: "https://graph.pheonixresearch.com/api/v1/read/live/graph" graph_exclusions: "https://graph.pheonixresearch.com/api/v1/read/live/exclusions" graph_meta: "https://graph.pheonixresearch.com/api/v1/read/live/meta" graph_bundle: "https://graph.pheonixresearch.com/api/v1/read/live/bundle" discovery: discovery_json: "https://www.pheonixresearch.com/.well-known/pheonix-discovery.json" llms_txt: "https://www.pheonixresearch.com/llms.txt" sitemap: "https://www.pheonixresearch.com/sitemap.xml" --- # A Megawatt-Hour of Pellets Costs EUR 41.30 and a Megawatt-Hour of Chips Costs EUR 21.85 — 47.1 Per Cent of the Biomass Fuel Market Is the Certification File Pheonix Research has published *Global Biomass Fuel Market Report, Size, Share and Forecast 2026–2033: Priced by the File, Not the Flame*, which sizes the market for solid biomass fuel delivered to a combustion or co-processing point at **USD 12,345.6 million in 2025 across 59.3 million tonnes**, reaching **USD 20,660.0 million by 2033** at a compound annual rate of **6.65 per cent** — an increment of **USD 8,314.4 million**, or **1.673 times** the base year. The report's central finding is that the tonne, not the energy inside it, is the product. **USD 5,813.5 million — 47.1 per cent of the measured market — sits above what the same energy would cost as wood chips.** The premium is not a bubble and it is not misbehaviour. It is the price of a densified, uniform, contractible, traceable tonne, and it is the single fact that every commercial decision in this category resolves to: where to site a plant, which certificate to carry, whether to sell on spot or on term, whether to own a port. ## Same energy, twice the price, and the fuel is not the difference In the 2024–25 heating season the Baltpool exchange cleared wood chip transactions across the three Baltic states at an average of **EUR 21.85 per megawatt-hour** — EUR 115.8 million of turnover on 5.3 terawatt-hours, with national averages of EUR 21.80 in Lithuania, EUR 22.01 in Latvia and EUR 21.34 in Estonia, converged to within three per cent of each other (Baltpool, 13 May 2025). That is what a functioning commodity market looks like. In the same period industrial wood pellets were assessed at **EUR 195 per tonne CIF ARA — EUR 41.30 per megawatt-hour** — and residential-grade ENplus A1 at EUR 210 per tonne, or EUR 44.47 per megawatt-hour (RBCN Biomass Market Update, 2025). Identical combustion chemistry. A **1.89 multiple** on the industrial grade and 2.04 on the residential grade. What separates the two prices can be itemised: moisture, density, fines tolerance, ash specification, chain of custody, audit trail, and the fact that one is a contractible unit of renewable energy and the other is a pile of chips. What cannot be separated is that roughly half of what this market is worth is attributable to what travels with the fuel rather than what is in it. ## Three channels, three files, three prices | Channel | | 2025 volume (Mt) | | USD per tonne | | 2025 value (USD m) | | Share | | 2033 value (USD m) | | CAGR | | Share of increment | | Industrial wood pellets | | 32.7 | | 196.62 | | 6,429.6 | | 52.08% | | 11,297.5 | | 7.30% | | 58.6% | | Heating pellets | | 20.8 | | 247.12 | | 5,140.0 | | 41.63% | | 7,978.5 | | 5.65% | | 34.1% | | Palm kernel shells | | 5.8 | | 133.79 | | 776.0 | | 6.29% | | 1,384.0 | | 7.50% | | 7.3% | | **Total** | | **59.3** | | **208.19** | | **12,345.6** | | **100%** | | **20,660.0** | | **6.65%** | | **100%** | **Industrial pellets** at USD 196.62 a tonne carry a sustainability and chain-of-custody file that a utility can present to a regulator in return for a subsidy, a renewable certificate or a zero emissions factor. They are 52.08 per cent of value and supply 58.6 per cent of the increment — and their demand rests entirely on the subsidy they were built to satisfy. **Heating pellets** at USD 247.12 a tonne carry a quality certificate and a bag. They serve more than 6.5 million European households, a channel that grew 5 per cent to 15.3 million tonnes of residential consumption in 2025 while European industrial demand was being squeezed. Highest price per tonne, slowest growth at 5.65 per cent, and the most durable of the three. **Palm kernel shells** at USD 133.79 a tonne carry a legal-origin file and almost nothing else. Japan imported just over 4.0 million tonnes in 2025 under HS 1404.90 — 74 per cent from Indonesia, 22 per cent from Malaysia — at a landed USD 126 to 141 a tonne. Fastest growth at 7.50 per cent, and the only channel in this report that cannot be burned in Europe and still counted as renewable. ## Every door that built this market is closing at the same time Industrial biomass demand was constructed by three policy instruments in three jurisdictions, and all three are now in retreat or at their ceiling. **South Korea** imported 3.91 million tonnes of wood pellets in 2025, down 3 per cent from the 4.015 million tonne record of 2024, while the average import price rose 15 per cent to USD 145 a tonne and the import bill rose 12 per cent to USD 566 million (Lesprom Analytics, 11 February 2026). The country's late-2024 amendment to its Renewable Portfolio Standard ends certificate support for new biomass power plants, ends certificates for state-owned coal-and-biomass co-firing from 2025, phases out private co-firing certificates from 2026, and lowers the weighting given to dedicated biomass plants over time. That is not a demand wobble. It is the removal of the mechanism that took the import curve from 122,000 tonnes in 2012 to 3.91 million tonnes. **Japan** reached 8.7 gigawatts of installed biomass capacity by December 2025 against an 8 gigawatt target for the 2030 energy mix — it has already exceeded the policy it was built to satisfy, with wood pellet imports above 8 million tonnes in 2025. From April 2026, new FIT/FIP certification has ended for facilities of 10 megawatts or larger in the “general wood and agricultural residues” category, which accounts for 94.8 per cent of new certifications in that class (Drax, presented to the 2026 pellet industry conference, 22 September 2026). Existing contracts are unaffected, and a biomass category has been reinstated in the long-term decarbonised power auction. Japan is not closing. Japan has stopped opening. **Europe** consumes 70 per cent of global pellet demand and produces 45 per cent of world output, with production excluding Belarus and Russia rising 10 per cent to a record 24.1 million tonnes in 2025 (Bioenergy Europe). The revised Renewable Energy Directive, EU/2023/2413, in force since 20 November 2023, extended “no-go areas” from agricultural to forest biomass — primary and old-growth forest, highly biodiverse forest, grassland, heathland, certain high-carbon-stock land and peatland — added specific harvesting requirements including for clear-cuts and deadwood extraction, and widened greenhouse gas savings criteria. Only biomass that does not originate in those areas can count toward renewables targets or receive subsidies. The compliance file, not the fuel, determines eligibility — and eligibility determines the price. ## Two importing blocs, each short almost exactly twelve million tonnes At 36.05 million tonnes of consumption against 24.1 million tonnes of production, Europe runs a structural deficit of **11.95 million tonnes**. Japan and Korea together imported **11.91 million tonnes** in 2025. Two blocs, each short almost exactly the same quantity, drawing on the same North American and Asian supply base — and one of them is removing the subsidy that justified the purchase. Every 10 per cent reduction in that combined pull, redirected into a spot market with no alternative large buyer, reprices several million tonnes at once. Replacement demand exists, in sustainable aviation fuel and cement co-processing. But it buys a different tonne, at a different price, under a different file, and it is not yet large enough to absorb what the three closing doors release. That is why this forecast is 6.65 per cent rather than the double-digit rate volume growth alone would support. ## USD 37 between the mill and the boiler, and 15 of it is the state Argus assessed Japan-compliant palm kernel shells at about **USD 101 a tonne FOB east coast Sumatra** in December 2025. Japanese buyers paid about **USD 138 a tonne CIF** in May 2026, down from a peak of about USD 167 in July 2024 — a **36.6 per cent** gap. Of the USD 37 difference, USD 15 is statutory: an Indonesian export duty set monthly against the crude palm oil reference price (USD 10 a tonne in May 2026) plus a plantation fund levy of USD 5 a tonne from 1 March 2026. The remaining USD 22 is shipping, certification and margin. The same industrial pellet cleared at **USD 211 a tonne in Northwest Europe and USD 145 in South Korea** — a **1.46 multiple** on a physically comparable product. Europe is paying 46 per cent more for a tonne it cannot produce enough of; Korea is paying less for a tonne whose subsidy is being withdrawn. The two prices are converging on policy, not on fibre. And ENplus A1 residential pellets were assessed at EUR 210 a tonne against EUR 195 for industrial I2 — **7.69 per cent for a certificate**, on a tonne in which nothing physical has changed. The chain-of-custody requirements, fines tolerance, ash specification and audit trail are the difference. ## Of 6.65 per cent, 3.47 points is volume and 3.07 points is price The base of USD 12,345.6 million at **USD 208.19 a tonne** rises to USD 20,660.0 million at **USD 265.21 a tonne** by 2033 on 77.9 million tonnes: volume compounding at 3.47 per cent and realised price at 3.07 per cent, which compound — they do not add — to 6.65 per cent. The price half is the contentious one, because it requires delivered biomass to outpace general inflation for eight consecutive years in a market whose stated purpose is to undercut the fossil fuel it displaces. It is defensible for three reasons — statutory cost escalation in Indonesia, a widening sustainability compliance burden in Europe, and aviation fuel buyers entering the same fibre catchment at a higher willingness to pay — and it is the assumption most likely to be wrong. Read the model as a spread: hold the delivered price at USD 208.19 and the 2033 market is **USD 16,218.0 million**, with value growing at exactly the volume rate. Hold volume at 2025's 59.3 million tonnes and let price compound, and 2033 is **USD 15,727.0 million**. ## The market power is not in the forest The United States exported **10.09 million tonnes of wood pellets in 2025** — roughly one tonne in five of global output, and the single largest traded flow in the market — organised around a small number of port-linked plants in the Southeast. In 2025 that geography moved. Georgia lost three major paper mills in under ninety days, which is a supply event disguised as a demand event: pulp and paper mills are the primary source of the sawmill and manufacturing residue pellet plants buy, and their closure removes both the residue and a competing buyer. Combined Amsterdam–Rotterdam–Antwerp pellet inventories fell by 15,500 tonnes, or 47 per cent, to around 17,500 tonnes in a single quarter of early 2025. A market with six weeks of visible stock at its main import hub has no buffer against a disruption. Enviva emerged from Chapter 11 with roughly USD 1 billion less debt and its 1 million tonne Alabama plant ramping. Drax Group, the most vertically integrated participant in the industry, reported revenue of GBP 5,391 million against GBP 6,163 million, adjusted EBITDA of GBP 947 million against GBP 1,064 million and operating profit of GBP 241 million against GBP 850 million. That is what partial integration looks like when three independent shocks arrive: the fuel chain absorbs the margin before the generation business reports it. No producer holds a share of this market that gives it pricing power over the fuel. The concentration sits one layer downstream — in certification bodies, port terminals and the traders who assemble a bankable file — because a chain-of-custody audit is largely a fixed cost per cargo: trivial on a 30,000 tonne Handysize, prohibitive on a 2,000 tonne regional lot. That is a consolidation mechanism that requires no producer to become more efficient. ## What the 59.3 million tonnes does not include Published figures for “the biomass market” range across two orders of magnitude because they count different things. This report counts one: solid biomass fuel delivered to a combustion or co-processing point, across a commercial boundary, at the price the buyer paid. - Captive bagasse, black liquor and on-site mill residue. Burned where they are produced, at a transfer price that is administrative rather than commercial. They are an avoided disposal cost, not a fuel market, and they are the single largest reason other estimates run far higher. - Traded wood chips. Real and priced — the Baltpool exchange alone cleared 5.3 terawatt-hours in one heating season — but mostly moving within a hundred kilometres of where they are cut, on contracts that are not consistently reported. Used here only as the energy-price reference that establishes the pellet premium. - Firewood, unprocessed residue, refuse-derived fuel and the non-biogenic fraction of alternative fuels. Of the 25.57 million tonnes of alternative fuel that Global Cement and Concrete Association members reported for 2024, 8.51 million tonnes — 33.28 per cent — is biomass; the remainder is fossil-derived waste. - Liquid biofuels, biogas and certificate value. Renewable Energy Certificates, Guarantees of Origin and UK Renewable Obligation Certificates trade separately, at their own price, with their own volatility — and on some days they are worth more than the fuel. ## Four things that would break the forecast - The three subsidy retreats land on the same balance sheet. A North American exporter selling into Korea, Japan and Europe faces a simultaneous reduction in the price each will pay, and there is no fourth market of comparable size. - The fuel supply is somebody else's by-product. European input costs did not fall through the 2024–25 heating season because sawmilling was subdued by lower construction activity. A market whose input is the waste of another industry has a supply curve it cannot control. - The tonnage is verifiable and the sustainability claim is not. The EU's no-go areas and harvesting requirements are verifiable only against a chain of custody that terminates at a forest stand. A single enforcement action against a large importer would reprice European industrial pellets by more than the entire certification cost. - Substitution above and below. Below, biomass competes with coal plus a carbon price, and the carbon price is the only variable that has moved in its favour. Above, heat pumps and electrification take a residential heating market that supplies 41.63 per cent of this report's value at its highest unit price. Three risks were considered and weighted down. **Feedstock exhaustion** is not binding in the forecast window: the US Department of Energy estimates more than 161 million tons of biomass residuals are available annually in the United States alone, against 10.09 million tonnes of pellet exports. **Technology substitution** is not imminent, because torrefaction adds cost to a product that competes on price against coal plus carbon, and no alternative densified fuel is at scale. **Demand collapse** is unlikely in heating, which is a dispersed, non-cyclical, price-sensitive retail market. ## Methodology The report is built on two research layers in a disclosed proportion of approximately 70 per cent secondary and 30 per cent primary. The secondary layer carries the numbers: the Bioenergy Europe Pellet Statistical Report of 24 June 2026, the RBCN Biomass Market Update, Lesprom Analytics' South Korean import series, Drax Group's Annual Report and Accounts 2025, the Global Cement and Concrete Association's GNR 2024 dataset, Baltpool clearing data, European Commission bioenergy reporting and Directive (EU) 2023/2413, Argus palm kernel shell assessments and Indonesian export declarations, and US Department of Energy resource estimates. The primary layer — structured interviews with producers, traders and port terminal operators across the Baltic, Iberian, Southeast US and Southeast Asian tiers, buyer-side interviews with utility fuel procurement and industrial fuel managers, and a buying-criteria exercise — supplies the mechanism and carries no number of its own. It explains why the FOB-to-CIF spread contains a statutory layer, why a fixed-cost audit consolidates production, and why buyers in Rotterdam and Gunsan price the same product 1.46 apart. No third-party market research estimate appears anywhere in the report, in any figure or in any reconciliation. ## About this report *Global Biomass Fuel Market Report, Size, Share and Forecast 2026–2033: Priced by the File, Not the Flame* is available at [https://www.pheonixresearch.com/energy-power/bio-fuels/market-report/global-biomass-fuel-market/](https://www.pheonixresearch.com/energy-power/bio-fuels/market-report/global-biomass-fuel-market/), with competitive landscape, value chain, investment activity, technology and innovation, market risk and regulatory landscape chapters. Supporting analysis: [The Biomass Fuel Market Is 59.3 Million Tonnes. The Number Everyone Quotes Is 53.5.](https://www.pheonixresearch.com/energy-power/bio-fuels/article/the-biomass-fuel-market-is-59-3-million-tonnes-the-number-everyone-quotes-is-53-5/) and [The Same Pellet Clears at USD 211 in Amsterdam and USD 145 in Korea](https://www.pheonixresearch.com/energy-power/bio-fuels/article/the-same-pellet-clears-at-usd-211-in-amsterdam-and-usd-145-in-korea/). ## About Pheonix Research Pheonix Research is a market intelligence platform that sizes markets bottom-up from physical volume and prices them at the point where a buyer actually pays, then translates the result into role-specific decisions. Its research is organised around value chains rather than industry labels: the same market looks different to procurement, to strategy and to the executive, and the output is built to end in an action and a timeframe rather than a chart. Pheonix publishes market reports, bespoke intelligence engagements, the role-based VALUE platform and curated signal bundles. For further information, visit [https://www.pheonixresearch.com/](https://www.pheonixresearch.com/).