Wood Recycling Market Size

Wood Recycling Market size was valued at USD 19.45 billion in 2023 and is poised to grow from USD 20.44 billion in 2024 to USD 30.43 billion by 2032, growing at a CAGR of 5.1% during the forecast period (2025-2032).

Growing interest in renewable energy has fueled the demand for biomass energy, in which recycled wood takes center stage. Wood waste is used as an eco-friendly option by several industries and power generation plants instead of fossil fuels to cut carbon emissions and conserve energy. It notably fuels the wood recycling market expansion.

The global wood recycling industry has emerged as a pivotal business segment of the larger waste management and circular economy market due to growing environmental sensitivities and governance imperatives. Wood waste, which originates from construction and demolition (C&D), furniture, packaging, and industrial processes, accounts for a major percentage of the world's waste streams. Rather than landfilling or incinerating wood, recycled wood is reused to produce different value-added products including particleboards, biofuel, mulch, compost, bedding for animals, and landscaping supplies. The increased focus on sustainability and resource utilization has driven up demand for recycling wood, mainly in the building, furniture industries, and the biomass energy markets.

Governments all over the globe have enacted strong regulations to cap landfill waste and encourage recycling practices, further pushing market growth. Technological improvement in recycling tools, including auto-sorting plants and bio-treatments, has improved process efficiency and recycling wood material quality. Furthermore, the expanding use of circular economy principles by industries such as construction, furniture, and energy has promoted increased use of recycled wood in the development of sustainable products. Urbanization and industrialization have also generated substantial wood waste, presenting both challenges and opportunities for recycling companies. Market operators are increasing processing capacity and investing in new recycling technologies to maximize resource recovery and minimize waste disposal costs.

Demand for sustainable building materials and bio-based products continues to rise, thus providing more impetus for the wood recycling market. Also, partnerships between government agencies, private enterprises, and environmental bodies are driving innovation and knowledge-sharing within the sector. As a result of the continued focus on sustainability, waste minimization, and renewable resources, the global wood recycling market can anticipate stable growth from technology development, policy initiatives, and increasing consumer awareness of the use of recycled wood products.

In March 2023, the European Union made a €1 billion investment to improve wood recycling facilities in member countries. The move will help advance recycling levels, minimize landfill waste, and encourage circular economy principles. The money will be used for new recycling technologies, waste collection optimization, and green product development. With strict environmental regulations and rising consumer awareness, this investment is expected to drive significant growth in the wood recycling market over the next four to five years. By strengthening recycling capabilities and fostering innovation, the EU’s initiative will contribute to a more sustainable and resource-efficient wood recycling industry globally.

In February 2023, IKEA partnered with Renewi to launch a large-scale wood recycling program, reinforcing its commitment to sustainability. The initiative focuses on collecting and repurposing wood waste from IKEA products, reducing environmental impact and increasing resource efficiency. This program aligns with IKEA’s goal of becoming a circular business by 2030, setting a benchmark for sustainable retail practices. By incorporating recycling into its supply chain, the business is likely to shape the trend of wood waste management in the global market. The partnership with Renewi reflects the increasing contribution of large businesses to the future of the wood recycling sector.

In October 2024, North America's top waste management company, Waste Management, Inc., entered into a strategic alliance with advanced recycling technology company Renewlogy. Through this partnership, Waste Management intends to deploy novel chemical recycling technologies to transform mixed wood waste into high-value materials, including synthetic fuels and industrial chemicals. With the integration of Renewlogy's technology into its business, Waste Management aims to maximize resource recovery and minimize landfill reliance. This program is poised to have a dramatic impact on the international wood recycling industry throughout the decade by encouraging high-end recycling technology and helping the waste management system become more sustainable.

In September 2024, SUEZ, the international leader in environmental services, diversified its wood recycling capacity through the acquisition of UK-based Wood Recyclers Ltd. This move increases SUEZ's ability to process and recycle a wide range of wood waste materials, such as construction waste and industrial by-products. The firm intends to invest in cutting-edge processing plants to boost the output of recycled wood products, such as biomass fuels and composite materials. During the next decade, this development is expected to enhance SUEZ's market position in the wood recycling sector and serve the increasing demand for sustainably sourced materials across industry sectors.