This post is the first in a series related to Forisk’s Multi-Client Study: North American Forest Market & Industry Rankings, a comprehensive analysis and rankings of North American timber markets and wood-using mills. For more information, click, here.

Wood pellet production capacity in North America has increased 144% over the past decade. Growing to meet European demand for renewable energy—and more recently demand from Asia—wood pellet manufacturing capacity has consolidated and shifted across regions. Today, the U.S. South is the largest wood pellet producing region in North America. With 11.5 million tons of capacity, the region accounts for 58% of North America’s wood pellet capacity (Figure). The South’s production capacity has increased more than fivefold since 2009, growing at a compound annual rate of 14%.

The nature and structure of wood pellet capacity within the region has changed as well. The shift to an export-oriented business has pushed the wood pellet industry to economically efficient large-scale production facilities in an effort to lower per unit costs. Since 2009, the average capacity of wood pellet manufacturing facilities in the U.S. South grew 180%, reaching 250 thousand tons in 2019.

Scale leverages technological advances in the forest products industry, and industry consolidation further leverages those benefits. Enviva, the largest industrial pellet producer in the world, entered the market in 2010 and currently accounts for 40% of the U.S. South’s wood pellet capacity and 23% of North America’s. In 2019, in addition to announced capacity increases at Enviva’s Greenwood and Sampson facilities, the company began operations at its 661 thousand ton mill in Hamlet, NC. Further growth is expected with announced capacity increases at Enviva’s Northampton and Southampton mills in 2020 as well as plans to build a new facility in Lucedale, MS.