Black Pellets Market Size To Reach $3,219.5 Million By 2040

Black Pellets Market Growth & Trends

The global black pellets market is expected to reach USD 3,219.5 million by 2040, expanding at a CAGR of 14.8% from 2026 to 2040. The market is experiencing robust growth driven by the accelerating phase-out of coal, increasing adoption of low-carbon solid fuels, rising biomass co-firing in power generation, and growing demand for sustainable industrial heating solutions across both developed and emerging economies.

As governments and industries intensify decarbonization efforts, black pellets are gaining traction as a drop-in replacement for coal due to their high energy density, hydrophobic nature, and compatibility with existing coal-fired infrastructure. Compared to conventional white pellets, black pellets offer superior grindability, lower moisture absorption, and enhanced storage stability, enabling efficient long-distance transport and large-scale deployment in power generation and combined heat and power (CHP) applications. These technical advantages support broader adoption across utility-scale power plants and energy-intensive industrial sectors.

Utilities and industrial end users are increasingly investing in black pellet supply chains to comply with renewable energy mandates, achieve carbon reduction targets, and diversify fuel sources while minimizing capital expenditure on retrofitting. Continuous advancements in torrefaction processes, feedstock flexibility, and pellet quality are improving production efficiency and cost competitiveness. In parallel, expanding international biomass trade flows, particularly from North America and Southeast Asia to Europe and the Asia Pacific, are further reinforcing market growth.

As global energy systems transition toward low-carbon and circular economy models, black pellets are emerging as a critical bridging fuel that enables near-term emissions reductions while leveraging existing thermal infrastructure, positioning the market for sustained long-term expansion.

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Black Pellets Market Report Highlights

• The industrial heating application segment accounted for the largest share of 43.4% in 2025, driven by the increasing replacement of coal and fossil fuels in energy-intensive industries such as cement, steel, chemicals, pulp & paper, and food processing. Black pellets are widely adopted in industrial boilers and furnaces due to their high energy density, hydrophobic properties, and compatibility with existing coal-handling and combustion systems, enabling emissions reduction without major infrastructure retrofits.

• Industrial heating is also expected to register the fastest CAGR of 16.4% over the forecast period, supported by rising industrial decarbonization commitments, volatile fossil fuel prices, and growing emphasis on energy security. Advancements in torrefaction technology, improved pellet durability, and expanding availability of standardized black pellet grades are enhancing operational reliability and cost competitiveness, accelerating adoption across both developed and emerging markets.

• Regionally, Europe held the largest share of 55.1% in 2025, supported by stringent emissions regulations, coal phase-out policies, and strong biomass co-firing mandates under EU decarbonization frameworks. The region’s mature biomass imports infrastructure and long-term offtake agreements continue to reinforce demand for black pellets in power generation and industrial heating.

Black Pellets Market Segmentation

Grand View Research has segmented the global black pellets market report on the basis of application and region:

Black Pellets Application Outlook (Revenue, USD Million; Volume, Thousand Tons; 2021 - 2040)

• Power Generation

• Industrial Heating

• Residential Heating

• Others

Black Pellets Regional Outlook (Revenue, USD Million; Volume, Thousand Tons; 2021 - 2040)

• North America

  • U.S.

  • Canada

• Europe

  • Germany

  • UK

  • Italy

• Asia Pacific

  • China

  • Thailand

  • Japan

• Latin America

• Middle East & Africa

List of Key Players in the Black Pellet Market

• Airex Energy Inc.

• Arbaflame AS

• Bioendev AB

• Blackwood Technology B.V.

• Idemitsu Kosan Co., Ltd.

• Khodal Bio Fuel

• NT Biomass Products Co., Ltd. (NTBC)

• SIMEC

• Talwandi Sabo Power Limited (TSPL)

• Thermya