North American Fuel Pellet Industry Has Construction in Store

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

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Summary

Fuel pellet construction projects are active in the U.S., Mexico and Canada, bringing more than $1.6 billion in potential spending.

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An Export-Driven Market

While relatively few North American power plants are fueled by biomass in the form of fuel pellets manufactured from wood and organic waste, that isn't stopping pellet producers in the U.S., Canada and Mexico from spending on construction projects, primarily with an aim to reach export markets. Most North American fuel pellet exports go to biomass-burning power plants abroad.

And that translates into big business, and big business means growth opportunities, which North American fuel pellet producers are seizing. According to Industrial Info Resources data, there are more 30 active capital fuel pellet projects across North America in various stages of development, carrying a combined value of more than US$1.6 billion. In addition, Industrial Info Resources is tracking nearly 150 planned maintenance shutdowns and programs at fuel pellet plants across the continent.

Most North American fuel pellets end up in Europe. In the latest available data, the U.S. Department of Agriculture (USDA) reported that the U.S. exported more than 608,500 metric tons of fuel pellets in February. While this was down substantially from January's 964,860.7 metric tons, the USDA notes a relative year-over-year flatness when both months are taken into account, representing U.S. exports of 1.57 million metric tons at a value US$305.66 in January and February 2026, compared with 1.62 million exported tons valued at US$305.88 million for the first two months of 2025. The USDA reported that February pellet exports from the U.S. primarily ended up in the U.K., which received more than 471,000 metric tons, followed in a distant second place by Denmark, which imported 44,334 metric tons of U.S. wood fuel pellets in February.

The U.K. as a prime export destination should come as no surprise as the country boasts what is generally considered to be the world's largest biomass-fueled power plant. Drax Power says the 2.6-gigawatt Drax power station in North Yorkshire can consume up to 32,000 metric tons of fuel pellets daily at full capacity. The plant relies substantially on North American biomass, and pellet producers there are answering the call in the form of on-the-ground and planned projects.

Under Construction

One of the largest North American fuel pellet projects presently underway is occurring in British Columbia under the auspices of Peak Renewables Limited, which is converting a shuttered sawmill to produce wood pellets. The plant is located in the heavily forested northwestern corner of the province, with little in the way of access to waterborne routes, but the Peak plant's pellets will be shipped by rail to the Port of Vancouver to reach Asian and European markets. The port's Pacific Coast location suggests a strong reach into Asian markets. Peak is adding eight pelletizers at the US$135 million project, with an aim of producing 600,000 metric tons of pellets of year. Subscribers to the Industrial Info Resources Global Market Intelligence (GMI) Project Database can learn more by viewing the project report.

A perceived weakness in those Asian markets is one of the reasons Drax has cited for pausing construction on a 450,000-ton-per-year plant in Washington state and a dryer addition at a British Columbia location. Industrial Info Resources is tracking 15 operational Drax fuel pellet plants in British Columbia and the southern U.S., accessing both the Pacific and Gulf of Mexico.

Despite Drax's project pauses, other construction is underway in North America. Amyium Incorporated is just wrapping up a 250,000-ton-per-year plant about 60 miles northeast of Sacramento, California, that will use self-generated biogas for energy and could provide excess power to area grid operator Pacific Gas & Electric. A smaller project in Chihuahua, Mexico, is expected to wrap up this summer and begin ramping up to 20,000 tons per year of fuel pellet production.

Planned Fuel Pellet Plants

Industrial Info Resources is tracking more than US$1.1 billion of planned and engineered fuel pellet projects in the U.S. and Canada that have not yet started construction. With the exception of one rebuild project in Missouri necessitated by a fire, all of the U.S. projects are planned for Atlantic and Gulf Coast states such as Alabama, Louisiana, Georgia and North Carolina, with easier waterborne access to markets in Europe. Georgia is on the receiving end of one the largest of these projects, which comes in the form of Spectrum Energy's plans for a 600,000-ton-per-year plant at a brownfield site, followed by a planned Phase II expansion that would boost production to more than 1 million tons per year. Subscribers can learn more by viewing the related project reports.

Planned Canadian fuel pellet projects are more scattered, but one company, Powerwood Canada Corporation, rises to the top for its planned investments. Industrial Info Resources is tracking four planned plants from the company valued at more than US$290 million. These include two projects in Alberta and one each in New Brunswick and Nova Scotia. The two Alberta projects are expected to break ground first, in 2026 and 2027.

Maintenance

In addition to capital projects, Industrial Info Resources is tracking 148 planned maintenance projects at North American fuel pellet plants. Drax and Colorado-headquartered Lignetics Incorporated are neck-and-neck for the lead maintenance spending positions, coming in the form of 55 projects requiring combined spending of more than US$28 million. British Columbia is on the receiving end of the of both the highest number of these maintenance projects as well as the highest total maintenance investment.

Key Takeaways

• Industrial Info Resources is tracking more than 180 capital and maintenance projects, valued at US$1.75 billion at fuel pellet plants in the U.S., Canada and Mexico.
• According to the USDA, the U.S. exported 1.57 million metric tons of wood fuel pellets at a value US$305.66 in January and February 2026.
• Industrial Info Resources is tracking four planned grassroot fuel pellet construction projects valued at a combined US$292 million in Alberta, Nova Scotia and New Brunswick from Powerwood Canada.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).