By Erin Voegele
A recent report filed with the USDA FAS’s GAIN predicts the EU market for wood pellets will likely grow this year but cautions future expansions could be limited by sustainability requirements introduced by individual member states.
According to the report, nearly half of the EU’s renewable energy is currently generated from the combustion of solid biomass, not including municipal solid waste. This includes wood chips and pellets. The EU consumes approximately 75 percent of the world’s wood pellets and accounts for about 50 percent of global production. In 2017, 40 percent of EU pellet consumption went to residential heating, with 33 percent to commercial power, 14 percent to commercial heating and 12 percent to combined-heat-and-power (CHP).
The EU consumed an estimated 27.35 million metric tons of wood pellets last year, up from 24.15 million tons in 2017. Wood pellet consumption is expected to increase to 30 million metric tons this year.
The EU is expected to produce 18.1 million metric tons of wood pellets this year, up from 18.85 million metric tons in 2018 and 15.3 million metric tons in 2017. Imports are expected to increase to 12.2 million metric tons in 2019, up from 10.355 million metric tons in 2018 and 8.692 million metric tons in 2017. EU exports of wood pellets are expected to remain at the 2018 level of 170,000 tons this year, down from 195,000 metric tons in 2017.
According to the report, the EU had 656 pellet plants in place in 2017 with a combined capacity of 22.75 million metric tons. Capacity increased to an estimated 24 million metric tons last year, and is expected to reach 25 million metric tons in 2019. Capacity use is expected to reach 72 percent this year, up from 70 percent in 2018 and 67 percent in 2017.
In 2018, the U.K. was the top EU consumer of wood pellets, with 8 million metric tons, followed by Italy with 3.75 million metric tons, Denmark with 3.5 million metric tons, Germany with 2.19 million metric tons and Sweden with 1.785 million metric tons. France, Belgium, Austria, Spain, the Netherlands and Poland were also among the top 11 EU consumers of wood pellets last year.
The U.K. imported 7.829 million metric tons of wood pellets last year, with 4.88 million tons of that volume imported form the U.S. Denmark imported 3.813 million tons of pellets last year, including 623 tons from the U.S. Italy imported 2.242 tons of wood pellets in 2018, including 88,000 tons from the U.S, while Belgium imported 1.137 tons, including 538,000 tons from the U.S.
Germany was the top EU producer of wood pellets in 2018, with 2.415 million metric tons, followed by Sweden with 1.845 million metric tons and Latvia with 1.575 million metric tons. France, Austria, Estonia, Poland, Spain and Portugal were also among the top nine EU pellet producers last year.
The U.S. was the top supplier of wood pellets to the EU last year, with 6.139 million tons, followed by Canada with 1.762 million tons and Russia with 1.365 million tons.
According to the report, a key factor in being able to capture the demand in the EU market and benefit from its growth potential is the sustainability of supply. “European traders and end-users of industrial wood pellets are calling for clear, consistent, harmonized and long-term government regulations,” said the authors in the report. “In the absence of EU-wide binding criteria for solid biomass, several EU member states, including Belgium, Denmark, and the Netherlands, developed their own rules in response to the growing use of wood pellets.”