Thomas Meth, co-founder and vice-president of Enviva, presented his vision for a better future involving the use of pellets © WSED
An update on the European pellet markets was given by Gilles Gauthier, General Manager of the European Pellet Council. In Europe, Germany was the number one pellet producer last year with over 3 million tons. France and Austria follow in second place with 1.5 million tons each, followed by Belgium with an output of around 800,000 tons. The increasingly strict environmental regulations as well as government subsidies for modern heating systems, which promote the use of pellets and encourage end users to switch to biomass, are seen as the driving forces behind the growing demand. As more and more countries grant subsidies on pellet heating systems in order to achieve their climate goals, demand for pellets is increasing on those markets.
Strong growth on Italian market followed by stagnation in 2020
Italy is one of the most important sales markets for Austrian pellets. In the past ten years, Italian pellet consumption rose from 1.5 million tons to almost 3.5 million tons a year. As a result of the coronavirus pandemic, consumption was slightly lower in 2020, as Matteo Favero from the Italian Agroforestry Energy Association (AIEL) reported at the conference.
Pellet stove sales in Italy fell by 23% in 2020, while those of pellet boilers saw an even bigger decrease of over 36%. For Favero, the hard lockdown in Italy is one of the reasons for the overall contraction.
Iberian Peninsula with mixed figures
In 2020, Spain produced 700,000 tons of pellets which is a little less than in the year before (2019: 714,000 tons). The Spanish Biomass Association (AVEBIOM) expects an increase in production, though, which should bring the total to 850,000 tons by 2022, according to Pablo Rodero, President of the European Pellet Council (EPC). For Rodero, the reasons for the decrease are a weaker demand in the south and east of the country as well as high stock levels due to remaining stocks from the previous year. Due to the weather, pellet consumption was at a normal level in central Spain and in the north of the country.
Pellets from third countries
Pellet imports from the US totaled 8.5 million tons (2019: 7.8 million tons) last year. Europe is the number one consumer of US pellets. The closure of paper mills in the southwestern United States freed up considerable volumes of wood for pellet production, said Thomas Meth, co-founder of Enviva Biomass, the world’s biggest pellet producer.
According to Univ.-Prof. Ming Shan of the Tsinghua University, Chinese pellet production reached 20 million tons last year (2019: 18 million tons). In the past three years, the Chinese government installed 90,000 pellet stoves in Shandong Province.
Russia produced 2.26 million tons of pellets in 2020, of which 2 million tons were exported to the EU and 200,000 tons to South Korea. With the ban on log exports from 2022, a bigger quantity of residual wood is available for pellet production in Russia. Therefore, the country plans to raise production to 5 million tons, as Dr. Olga Rakitova, Director of the National Bioenergy Union, reported. The 300 pellet producers in Russia can still rely on government subsidies, which cover 80% of the transport costs. According to Rakitova, a price of €85/ton is possible from the port of St. Petersburg/RU thanks to the subsidies.
Millions for the fight against biomass
At the pellet conference, a worrying development on the biomass markets in Italy and the US was brought to the attention of the audience. According to Meth, over €150 million have been donated to American NGOs, which fight biomass heating systems, in the past five years. Smear campaigns have been launched in Europe as well. Italian newspapers published extremely negative articles on biomass heating system, as Favero reported.
