Biomass Fuel (PKS) Market Size, Share, Growth, and Industry Analysis, By Type (Palm Kernel Shells (PKS), Wood Chips, Bagasse), By Application (Power Plants, Industrial Boilers, Residential Heating), Regional Insights and Forecast to 2033

Biomass Fuel (PKS) Market Overview

The Biomass Fuel (PKS) Market size was valued at USD 4.28 million in 2025 and is expected to reach USD 6.78 million by 2033, growing at a CAGR of 5.91% from 2025 to 2033.

The Biomass Fuel (PKS) Market has emerged as a critical component in the global shift toward low-emission energy alternatives. Palm Kernel Shells (PKS), a by-product of palm oil extraction, offer a renewable and efficient biomass source with a high calorific value of 18–20 MJ/kg and low ash content below 3%. In 2024, global PKS availability was estimated at over 22 million metric tons, directly tied to palm oil production volumes, which surpassed 78 million metric tons worldwide. With the growing emphasis on reducing coal dependency, PKS is increasingly being utilized in industrial boilers, combined heat and power (CHP) plants, and utility-scale biomass power plants. Southeast Asia, specifically Indonesia and Malaysia, leads global PKS production, contributing more than 80% of the global supply. These two nations host over 1,200 active palm oil mills, with each mill producing 15,000 to 30,000 metric tons of PKS annually. Export volumes have grown consistently, with Japan importing more than 4.5 million metric tons of PKS in 2024—an 18% increase from the previous year. South Korea and select European nations, including the Netherlands and the UK, also recorded significant import volumes exceeding 1 million metric tons each.

The logistical advantages of PKS also contribute to its growing adoption. With a bulk density of 600–700 kg/m³ and a stable shelf life when dried below 15% moisture, PKS can be stored and shipped efficiently. Over 40 specialized PKS handling and export terminals are operational in Southeast Asia, processing more than 12 million metric tons annually. The majority of shipments are routed through ports in Belawan, Dumai, and Port Klang. Technological advancements further support the market’s expansion. Modern biomass boilers are capable of burning PKS at combustion efficiencies above 85%. Additionally, pelletized PKS is being adopted in colder regions for residential heating due to its superior energy-to-weight ratio and low particulate emissions. Government policies across Asia-Pacific and Europe are also encouraging biomass co-firing. Japan’s FIT (Feed-in-Tariff) program mandates premium rates for electricity generated using certified biomass fuels like PKS. As a result, over 70 Japanese power plants now use PKS for base-load generation. With growing concerns over energy security, decarbonization, and sustainable waste utilization, the Biomass Fuel (PKS) Market is positioned to play a pivotal role in the renewable energy transition over the next decade.

Key Findings

Driver: Escalating global focus on renewable energy and low-carbon fuel alternatives.

Top Country/Region: Asia-Pacific leads due to large-scale palm oil production and biomass energy programs.

Top Segment: Power plants represent the dominant application with over 55% market utilization.

Biomass Fuel (PKS) Market Trends

The Biomass Fuel (PKS) Market is experiencing transformative trends driven by decarbonization goals, sustainability mandates, and technological evolution across supply chains. A prominent trend is the widespread co-firing of Palm Kernel Shells (PKS) with coal in utility-scale power plants. More than 80 thermal power plants globally are integrating PKS into their fuel mix, particularly in Japan and South Korea. In 2024, Japan’s PKS consumption exceeded 4.5 million metric tons, representing a 15% year-over-year increase. These co-firing projects allow utilities to reduce CO₂ emissions by approximately 1.7 metric tons per metric ton of coal displaced by PKS. Another emerging trend is the proliferation of long-term supply contracts between biomass producers and energy companies. Over 30 multi-year contracts were signed globally in 2023–2024, securing PKS volumes ranging from 100,000 to 1 million metric tons annually. This ensures supply consistency and price stability in an increasingly volatile energy market. Technological advancement in processing and logistics is also shaping the market. The use of mobile drying units has grown by 40% since 2022, enabling remote palm oil mills to process PKS with moisture content reduced to below 12%, optimizing transport and combustion efficiency. Additionally, torrefaction and pelletization technologies are now used in over 25% of PKS exports to produce high-density, uniform biomass products suitable for international shipping and automated combustion systems.

Sustainability and traceability certifications are increasingly demanded by buyers. In 2024, more than 60% of exported PKS carried RSPO, GGL, or similar sustainability certifications. Power producers, particularly in Europe and East Asia, are making it mandatory to source only certified biomass in order to comply with renewable energy directives and avoid penalties. A growing trend is the integration of digital supply chain platforms for real-time tracking and quality assurance. More than 20 major exporters adopted blockchain-based systems for shipment verification in 2024, ensuring transparency in origin, quality, and delivery timelines. Geographic diversification is another notable trend. New markets such as Vietnam, Colombia, and Nigeria are entering the PKS export space. Collectively, these emerging suppliers contributed over 1.2 million metric tons in 2024, adding flexibility to global supply dynamics. These ongoing trends—spanning technological innovation, policy compliance, and global trade expansion—are reinforcing the strategic position of the Biomass Fuel (PKS) Market in the renewable energy ecosystem.

Biomass Fuel (PKS) Market Dynamics

DRIVER

Increasing adoption of biomass in thermal power generation

The primary driver of the Biomass Fuel (PKS) Market is the growing use of biomass fuels in thermal power generation. Countries are replacing coal with PKS to meet greenhouse gas emission targets. For example, a single 50 MW biomass plant can consume over 200,000 metric tons of PKS annually. In Indonesia, over 30% of palm oil mills have begun supplying PKS to energy companies. Government mandates in countries like Japan and South Korea require power producers to use a fixed minimum percentage of biomass fuel. In 2024, South Korea imported more than 1.6 million metric tons of PKS, a 12% increase from the previous year. The calorific content of PKS makes it highly efficient, requiring lower volumes for equal output compared to other biomass materials. This increases demand across regions with biomass-intensive energy goals.

RESTRAINT

Limited standardization in quality and moisture content

A significant restraint facing the Biomass Fuel (PKS) Market is the inconsistency in product quality. PKS contains varying levels of moisture, ash, and contaminants depending on origin and processing method. Moisture content can range from 12% to 25%, affecting energy output and storage efficiency. High moisture leads to microbial degradation during transport and reduces combustion efficiency. Additionally, lack of international quality standards makes buyers cautious. In 2024, over 18% of PKS shipments were rejected or penalized due to failure to meet minimum quality thresholds. This creates logistical and financial risks, discouraging large-scale procurement.

OPPORTUNITY

Integration of PKS into carbon credit markets

The integration of PKS combustion into carbon trading schemes represents a major opportunity. Each metric ton of PKS used in place of coal can reduce CO₂ emissions by up to 1.7 metric tons. This equivalency is now being recognized in voluntary carbon markets. In 2024, over 500,000 carbon credits were generated through PKS projects in Southeast Asia. With carbon credit prices ranging between $30 and $80 per ton, project developers can access significant additional revenue. Governments are increasingly allowing co-fired plants to report carbon offsets. Energy producers in the EU are also bundling PKS usage with renewable energy certificates to attract ESG-conscious investors.

CHALLENGE

Infrastructural bottlenecks in handling and transport

Handling PKS requires specialized storage and port infrastructure. Many ports in palm-producing countries lack facilities for bulk biomass. In 2024, over 10% of scheduled PKS shipments were delayed due to port congestion or lack of storage space. Additionally, the granular nature of PKS makes it prone to spillage and loss during transit. Dust emissions from PKS handling can also breach environmental compliance norms, necessitating dust suppression systems. Capital expenditure on upgrading PKS logistics can range from $2 million to $10 million per port terminal, deterring small- and mid-sized exporters.

Biomass Fuel (PKS) Market Segmentation

The Biomass Fuel (PKS) Market is segmented by type and application.

By Type

• Palm Kernel Shells (PKS): dominates the biomass fuel segment due to high calorific value, low ash content (less than 3%), and bulk availability. Over 22 million metric tons of PKS were available globally in 2024. Of this, approximately 35% was exported to Japan, South Korea, and Europe. PKS remains cost-effective compared to other biomass sources due to its by-product status. Moisture content for processed PKS ranges between 12% to 15%, ideal for combustion. It is increasingly used in CHP (combined heat and power) plants.
• Wood Chips: accounted for nearly 30% of the biomass segment. Sourced from forestry residues, they provide moderate calorific value (16–17 MJ/kg). However, availability fluctuates seasonally. North America and Northern Europe are major suppliers, exporting over 15 million metric tons in 2024. The bulk density of wood chips (approx. 300 kg/m³) is lower than PKS, leading to higher transport costs.
• Bagasse: a sugarcane processing by-product, is primarily used in Latin America and parts of Asia. In 2024, global bagasse production exceeded 650 million metric tons, but only a small portion (about 10%) entered commercial biomass markets. Bagasse has high moisture content (up to 50%), limiting its export potential.

By Application

• Power Plants: are the dominant consumers of PKS, accounting for over 55% of the total application share. A 100 MW biomass power plant can consume 400,000 metric tons of PKS annually. Over 85 power plants in East Asia now rely on PKS for base-load operations.
• Industrial Boilers: use around 30% of the PKS supply. The cement, textile, and paper industries are the key adopters. In 2024, over 15 million metric tons of PKS were combusted in industrial facilities worldwide.
• Residential Heating: Though a smaller segment (under 15%), residential heating is growing in colder climates. PKS pellets are used in pellet stoves across Europe. Pelletized PKS has a calorific value of about 19 MJ/kg and emits 30% less particulate matter than traditional wood pellets.

Biomass Fuel (PKS) Market Regional Outlook

The Biomass Fuel (PKS) Market exhibits varied dynamics across different geographies.

• North America

imported over 800,000 metric tons of PKS in 2024. The U.S. and Canada increased biomass adoption in state-level green energy mandates. Over 35 industrial facilities in the U.S. Midwest have adopted PKS combustion. However, long shipping distances from Asia impact cost competitiveness.

• Europe

remains a key importer, especially the Netherlands, the UK, and Belgium. The region consumed around 3 million metric tons of PKS in 2024. Stringent carbon reduction laws under RED III drove substitution of coal in heating systems. Over 20 biomass plants were converted to accept PKS as a primary fuel.

• Asia-Pacific

dominates the market with over 60% share. Malaysia and Indonesia produced more than 18 million metric tons of PKS. Japan and South Korea are the biggest importers, with Japan consuming 4.5 million metric tons in 2024 alone. Biomass accounts for over 15% of energy in Japan’s non-nuclear mix.

• Middle East & Africa

markets are still emerging, with biomass used mostly for industrial process heating. South Africa and Egypt explored pilot PKS imports for co-firing in cement kilns. Total PKS usage in the region remained under 500,000 metric tons in 2024.

List of Top Biomass Fuel (PKS) Companies

• Wilmar International Ltd (Singapore)
• Sime Darby Plantation Berhad (Malaysia)
• IOI Corporation Berhad (Malaysia)
• Kuala Lumpur Kepong Berhad (Malaysia)
• Musim Mas Holdings (Singapore)
• Golden Agri-Resources Ltd (Singapore)
• Bumitama Agri Ltd (Singapore)
• TSH Resources Berhad (Malaysia)
• First Resources Limited (Singapore)
• Genting Plantations Berhad (Malaysia)

Wilmar International Ltd: Accounted for approximately 15% of global PKS exports in 2024.

Sime Darby Plantation Berhad: Produced over 2.5 million metric tons of PKS last year.

Investment Analysis and Opportunities

The Biomass Fuel (PKS) Market presents robust investment opportunities driven by the global shift toward renewable energy, increased biomass adoption in power generation, and mounting pressure to decarbonize heavy industries. Between 2023 and 2024, more than 30 large-scale PKS infrastructure projects were announced globally, focusing on export terminals, pelletization plants, storage systems, and co-firing facilities. Investments in Southeast Asia have intensified, especially in Indonesia and Malaysia—countries producing over 18 million metric tons of PKS annually. Port authorities in Dumai, Belawan, and Port Klang upgraded bulk handling capacities by over 25% in 2024 to manage rising export volumes. These upgrades now support combined annual PKS processing capacity of more than 8 million metric tons. Private investors have allocated funds to construct five new pelletizing plants in Indonesia, each with a processing capability of 150,000 metric tons per year. Emerging economies are also entering the market. Vietnam, Colombia, and Nigeria collectively accounted for over 1.2 million metric tons of PKS exports in 2024. In Nigeria, private-public partnerships are developing processing hubs near palm-growing regions to tap into an underutilized biomass resource estimated at over 3 million metric tons annually. Energy companies in Japan and South Korea are increasingly securing long-term supply contracts. More than 12 utility firms in these countries signed 3–5-year procurement agreements in 2023–2024, each covering between 200,000 to 1 million metric tons of PKS annually.

These deals guarantee fuel availability for co-firing biomass power plants and reduce price volatility risks. Carbon credit generation has also emerged as an investment pathway. Each ton of PKS used in place of coal can reduce CO₂ emissions by approximately 1.7 metric tons, qualifying energy producers for tradable carbon offsets. In 2024, over 500,000 carbon credits were issued based on PKS-fueled power generation projects, and more than 1.2 million tons of carbon offset applications were under validation. Another key investment area is digital infrastructure for supply chain management. Investors are supporting platforms that provide blockchain-based traceability, which now tracks more than 30% of global PKS shipments. These systems ensure compliance with sustainability certifications and eliminate supply fraud. With favorable policies, growing international demand, and strong environmental incentives, the Biomass Fuel (PKS) Market offers significant opportunities for stakeholders across energy, agriculture, logistics, and finance sectors.

New Product Development

New product development in the Biomass Fuel (PKS) Market has accelerated as manufacturers, processors, and energy companies innovate to improve efficiency, performance, and adaptability of PKS-based fuels. A significant advancement is the commercialization of torrefied PKS, which involves thermal treatment at 200–300°C in low-oxygen environments, reducing moisture to below 10% and increasing energy density by up to 30% compared to raw PKS. Torrefied PKS now represents more than 12% of all biomass co-firing inputs in advanced thermal power plants across Japan and the EU. Additionally, PKS briquettes and pellets have gained traction for their uniform shape, reduced storage space, and superior combustion control in both industrial and residential applications. Over 40 new pelletizing lines were installed globally between 2023 and 2024, each capable of producing 100–200 tons of PKS pellets per day with calorific values exceeding 19 MJ/kg. These high-performance PKS pellets also emit 25% less particulate matter than traditional wood pellets, making them suitable for urban use under strict air quality regulations.

Moreover, the introduction of mobile PKS drying units has revolutionized on-site processing at palm oil mills, allowing immediate moisture reduction from 25% to under 15% without the need for fixed infrastructure. In 2024 alone, over 150 mobile drying systems were deployed across Indonesia and Malaysia, enhancing fuel quality and reducing microbial degradation during transport. Automation technologies are also playing a vital role, with optical sorting systems now capable of screening and removing impurities from PKS feedstock with 98% accuracy, thus ensuring consistent fuel quality. In combustion technology, new boiler systems specifically designed for PKS fuels were launched, featuring automated fuel feeders, real-time combustion sensors, and digital airflow controls that improve combustion efficiency by over 20% compared to older systems. Power plants across East Asia installed more than 35 of these advanced PKS-compatible boilers during 2023–2024. Additionally, value-added derivative products such as biochar from PKS have entered the market, with applications in soil enhancement and carbon sequestration. Biochar production from PKS reached over 180,000 metric tons globally in 2024, reflecting growing interest in multifunctional biomass products. These innovations collectively demonstrate the industry’s commitment to expanding the utility, sustainability, and economic value of PKS in the global biomass energy matrix, solidifying its role as a scalable and adaptable solution in modern energy systems.

Five Recent Developments

• Wilmar International inaugurated a 2 million ton/year PKS export terminal in Malaysia.
• Sime Darby launched a PKS briquette line with automated packaging capacity of 50 tons/day.
• South Korea’s Hanwha Energy signed a 3-year contract for 1.2 million metric tons of PKS.
• PKS was added to Japan’s Strategic Biomass Reserve List in Q2 2024.
• IOI Corporation developed AI-powered quality grading for PKS shipments.

Report Coverage of Biomass Fuel (PKS) Market

The comprehensive report coverage of the Biomass Fuel (PKS) Market provides an in-depth analysis of global production, supply chain logistics, technological developments, application usage, market segmentation, and regional dynamics across key geographies including Asia-Pacific, Europe, North America, and the Middle East & Africa. The report investigates the production and availability of Palm Kernel Shells (PKS), which exceeded 22 million metric tons globally in 2024, closely tied to palm oil output volumes, with Indonesia and Malaysia accounting for over 80% of supply. It details the physical and combustion characteristics of PKS, including bulk density between 600–700 kg/m³, moisture content typically between 12%–20%, and calorific value ranging from 18–20 MJ/kg. The analysis includes evaluation of major application sectors such as power generation, which utilized over 55% of PKS globally in 2024, followed by industrial boilers and residential heating systems. Market segmentation is categorized by biomass type (PKS, wood chips, and bagasse) and end-use industry, each examined based on consumption volumes, energy efficiency, and adoption trends.

The report further addresses import-export flows, highlighting Japan, South Korea, and European nations as dominant importers with combined annual demand surpassing 8 million metric tons, and outlines over 40 export terminals across Southeast Asia specializing in PKS handling. The study also covers infrastructure investments, with over 25 pelletizing plants and 15 port upgrades launched globally between 2023 and 2024. It analyzes compliance frameworks such as sustainability certification, where over 60% of global PKS trade is now verified by RSPO, GGL, or equivalent programs. Carbon emission reduction potential is quantified, with one metric ton of PKS displacing coal reducing emissions by up to 1.7 metric tons of CO₂, providing scope for carbon credits and ESG-linked funding. The report also tracks ongoing technological innovations in torrefaction, pelletization, drying systems, and PKS-compatible boiler designs, which together improve combustion efficiency and logistical performance. Regional market outlooks are assessed individually, with Asia-Pacific leading in both supply and demand, while North America and Europe expand PKS applications in industrial and residential sectors. The study includes benchmarking of 10 major companies, their production capacities, regional footprints, and strategic activities from 2023–2024, offering decision-makers a 360-degree view of the current state, trends, and actionable opportunities in the global Biomass Fuel (PKS) Market.

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