Wood recycling market to reach $30B by 2032

The wood recycling market has experienced significant growth in recent years, according to research and investment bank SkyQuest, driven by increased awareness of sustainability, regulatory pressures and advancements in recycling technologies. Additionally, the demand for recycled wood products in various industries, including construction, furniture manufacturing and energy production, has contributed to the market's expansion.

The global wood recycling market was valued at $20.44 billion in 2024 and is projected to reach around $30.43 billion by 2032, growing at a compound annual growth rate (CAGR) of 5.1 percent during the forecast period from 2025 to 2032.

SkyQuest attributes this market to several factors, including: 

• Increased demand for recycled products: As the construction, automotive, and furniture industries increasingly adopt sustainable materials, demand for recycled wood products, such as pellets, wood chips and reclaimed timber, is surging.
• Environmental regulations: Stringent waste management regulations and initiatives to reduce landfill waste are pushing companies to adopt recycling solutions. This has led to increased recycling activities in both developed and developing regions.
• Consumer preferences for sustainable products: Consumers are becoming more environmentally conscious, opting for products made from recycled materials, including recycled wood. This shift in preferences is driving demand for sustainable wood-based products.

Construction and demolition operations are expected to experience high growth in wood recycling because of increased construction activities globally, with end markets including furniture and carpentry, energy generation and landscaping. 

The North American wood recycling market is one of the largest in the world, SkyQuest says, and is expected to maintain a strong growth rate during the forecast period. The region's robust recycling infrastructure and stringent environmental regulations are key drivers.

Europe’s focus on sustainability and circular economy principles also have contributed to the region’s increasing adoption of wood recycling, with countries like Germany, the U.K. and the Netherlands leading the market. 

In addition to sustainability initiatives and environmental awareness, technological advancements and cost-effectiveness have helped make wood recycling a profitable operation. More efficient wood shredding, sorting and processing systems are improving the quality and yield of recycled wood, enabling the production of high-quality recycled products that meet industry standards. Recycled wood also comes at a lower cost than newly harvested timber, SkyQuest says. 

Despite its growth, the wood recycling industry faces several challenges:

• Contamination of wood waste: One of the primary challenges in wood recycling is the contamination of wood waste with nonwood materials such as metals, plastics and chemicals. This can hinder the recycling process and affect the quality of the final product.
• High transportation costs: The transportation of wood waste to recycling facilities can be costly, especially in regions where the wood supply is dispersed or where the recycling infrastructure is underdeveloped.
• Limited recycling capacity: While wood recycling is growing, many areas still lack the necessary infrastructure to process wood waste. The expansion of recycling facilities is needed to meet the increasing demand.
• Market volatility: The wood recycling market can be subject to fluctuations in the prices of raw timber and recycled wood products, which can affect the profitability and sustainability of recycling operations.