Pellet Prospects

Report analyzes current and future European pellet markets
By Lisa Gibson | May 23, 2011

In 2009, Europe consumed 9.8 million metric tons of wood pellets, with 9.2 million going to the 27 European Union member states, according to the 2011 report European Wood Pellet Markets: Current Status and Prospects for 2020.

Six European authors representing universities, pellet organizations and renewable firms collaborated on it with three goals in mind: map current European wood pellet demand and supplies; provide a comprehensive overview of major market types and prices; and discuss the future outlook in light of raw material supply. The work was published in Biofuels, Bioproducts & Biorefining.

In 2009, approximately 670 European pellet plants produced more than 10 million metric tons of pellets, making it the largest producer in the world. At the time of the report, Sweden and Germany were the largest pellet producers, both producing about 1.5 million metric tons. Sweden is the largest consumer of wood pellets at about 2 million metric tons and Germany, with a consumption of just below 1 million metric tons, exports more than 500,000 metric tons. The chart maps out consumption, production, import and export figures for the 15 largest European pellet markets including Sweden, Germany, Denmark, Austria, France, Italy and others.

After Europe, North America has the largest pellet production facilities. Capacity grew from 1.1 million metric tons in 2003 to 6.2 million in 2009, the report says. Canada exports 80 percent of its pellets and the U.S. exports only 20 percent. The majority of U.S. pellets are used in residential applications.
The report also studies residential and industrial pellet pricing, and transport costs and pellet trends. “The pellet market is quite dynamic due to economic developments and recently released government biomass support plans,” the report reads. “Public support is needed to cover the additional costs of capital investment, operation and maintenance of renewable energy equipment, and pellet fuel feedstock, in comparison with their fossil fuel alternatives.”

In addition, the report considers current and future supplies for pellet production and analyzes future pellet demand. It lists the EU member states with the most potential for additional wood and wood waste use for heating and electricity production as: Germany (43 million metric tons), France (19 million), U.K. (14 million), Spain (13 million), Poland (7 million), Belgium (7 million), Greece (6 million) and Italy (6 million). “It is uncertain to what extent the demand for woody biomass will be covered by wood pellets,” according to the report, which concludes by saying that pellets and other woody biomass sources could play a significant role in meeting the EU’s renewable energy goal of 20 percent by 2020.

—Lisa Gibson