Popularity of wood pellet use fuels EU import increase.

Popularity of wood pellet use fuels EU import increase.

The European Union rise in the use of wood pellets as fuel for small scale power generation plants and heating of homes is set to see the import of pellets rise by 25% this year.

Approximately 50% of the world’s wood pellets are manufactured within the EU, mostly as a waste by-product from sawmills but increasingly from timber left over from felling.

The top 5 EU wood pellet producers in 2014 are Germany (2.35m tonnes), Sweden (1.35m tonnes), France (1.20m tonnes), Latvia (980,000 tonnes) and Austria (900,000 tonnes).

The estimated total EU production of wood pellets in 2013 was 11.5m tonnes and this is expected to increase by another 1.0m tonnes this year. However, this growth is insufficient to meet the EU consumption (approximately 70% of the world’s total) which is growing rapidly and is expected to rise by some 14% to 20.0m tonnes this year.


Deficit of supply

With the growing demand from both the residential heating market and small scale power generation, the EU wood pellet production is unlikely to be able to keep up with this as capacity growth is insufficient.

France, Germany and Italy typically use wood pellets for domestic heating, whereas Denmark and Sweden use pellets for district-level heating plants and combined heat and power plants. Countries like the UK, Belgium and Netherlands mostly only use wood pellets to help fulfil quotas for electricity produced from renewable sources in larger scale power plants.


Export surge

Export levels are set to increase fourfold on 2009 levels to 7.5m tonnes this year – with exports coming predominantly from Canada, Russia and America.

American wood pellets exports to Europe alone are expected to top $1 bn by 2020 – seeing an increase in pellet output in America’s main timber regions, with output tripling since 2011 in the US South along the Atlantic coast in the states of Georgia, North Carolina and Virginia.

The export market volumes in Canada have also increased by more than 50% in 2013 on 2011 levels, with the majority being supplied by British Columbia.


Pellet Imports

The UK is the main EU pellet importer, 3.39m tonnes in 2013 with 50% coming from America, and Denmark second at 2.31m tonnes. Outside the EU, South Korea has dramatically increased its wood pellet imports over the last two years, with imports largely coming from Vietnam and Canada, giving European buyers increased competition from other importers.

(Source: USDA attaché report)


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