The European wood pellet markets: current status and prospects for 2020

Abstract

The wood pellet market is booming in Europe. The EU 2020 policy targets for renewable energy sources and greenhouse gas (GHG) emissions reduction are among the main drivers. The aim of this analysis is to map current European national wood pellet demand and supplies, to provide a comprehensive overview of major market types and prices, and to discuss the future outlook in light of raw material supply. Approximately 650 pellet plants produced more than 10 million tonnes of pellets in 2009 in Europe. Total European consumption was about 9.8 million tonnes, of which some 9.2 million tonnes is within the EU-27, representing a modest 0.2% of Gross Energy Consumption (75 EJ level in 2008). The prices of most pellet types are increasing. While most markets of non-industrial pellets are largely self-sufficient, industrial pellet markets depend on the import of wood pellets from outside the EU-27. Industrial pellet markets are relatively mature, compared to non-industrial ones, because of their advanced storage facilities and long-term price-setting. However, industrial pellet markets are unstable, depending mainly on the establishment or the abolishment of public support schemes. Following our scenarios, additional 2020 demand for woody biomass varies from 105 million tonnes, based on market forecasts for pellets in the energy sector and a reference growth of the forest sector, to 305 million tonnes, based on maximum demand in energy and transport sectors and a rapid growth of the forest sector. Additional supply of woody biomass may vary from 45 million tonnes from increased harvest levels to 400 million tonnes after the recovery of slash via altered forest management, the recovery of waste wood via recycling, and the establishment of woody energy plantations in the future. Any short-term shortages within the EU-27 may be bridged via imports from nearby regions such as north west Russia or overseas.