Wood Pellets - Residential: Market Size & Forecast 2026

The global residential wood pellets market sits at roughly USD 10.5 billion in 2025 (base year), growing at a 5.2% CAGR through 2032 to approximately USD 14.8 billion. European heating demand is the dominant consumption pocket (over 50% of global volume), and ENplus certification is the de facto retail grade. Sawmill-residue feedstock economics, not industrial power-sector demand, set the residential price ceiling, and the COST basis is structurally tighter than the bulk-utility pellet market because ash-content specs are stricter and bagged retail drives higher conversion margin. > **Analyst Take. Our view: residential pellets are a feedstock-anchored replacement category with a 5.2% base-case CAGR, not an emerging-fuel 12% growth story. The consensus 6%+ line misses the substitution ceiling: dense wood-burning heat pumps and district-heating decarbonisation are absorbing the marginal E

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