On April 6, the 29th European Pellet Conference took place in Wels as a hybrid event and as part of the World Sustainable Energy Days (WSED) with over 650 participants from 60 countries.
Independent and secured energy supply
With the “Fit for 55” package, the EU Commission presented its plans on how to limit climate change and become the world’s first climate-neutral continent by 2050. “The war in Ukraine will have a massive impact on our economic and energy system. In order to secure our energy budget and consumption while becoming more independent at the same time, it is important for the EU to reduce its imports of gas, oil and biomass from Russia,” Dr. Johannes Baur from the European Commission’s Directorate-General for Energy emphasized. In 2020, Russia was the second largest pellet producer in Europe after Germany (2020: 3.1 million t) with 2.2 million t a year. German demand totaled 2.24 million t in 2020. Pellet consumption from domestic production amounted to around 2 million t.
In total, only 55,000 t (2.3%) of pellets were imported from Russia, Belarus and Ukraine. According to the German Pellets Institute (DEPI), 3.355 million t were produced in Germany in 2021, while consumption amounted to 2.9 million t. This year, a capacity of almost 4 million t and a pellet production output of 3.6 million t are expected in Germany, while consumption is projected to reach 3.1 million t.
Industrial pellets of increasing importance
“So far, Germany has been a net exporter. In the future, we will be dependent on imports, especially of lower-quality pellets, that is pellets that are not ENplus-certified,” Martin Bentele, Managing Director of the German Wood Fuel and Pellets Association (DEPV), emphasized. In Germany, 99% of the produced and 70% of the traded wood pellets are ENplus-certified. Even though production is expected to increase over the next few years, Bentele believes that pellets produced in Germany will only be used to generate heat and not electricity. “If there is growing demand from the industry, it will be difficult to meet it exclusively with pellets from Germany. This enormous run on heating systems, which we might see soon, is not something the industry aimed for. That’s why it is all the more important that we gain speed and competitiveness,” Bentele analyzed. Biomass from wood and especially pellets are alternatives especially in industries which previously used lignite as an energy source, such as the lime, sugar and cement industries, but also nurseries. For example, boiler manufacturers such as Hargassner and Windhager implemented a number of greenhouse projects in the Netherlands and Canada.
Low willingness to invest
“The use of industrial pellets will grow rapidly,” Thomas Meth, Executive Vice-President at Enviva, predicted. The US group wants to produce 13 million t of industrial pellets a year by 2026. Since 2013, global demand for industrial pellets has risen by 153%, from 9.3 million t to 23.6 million t in 2021. In 2026, it will reach a record level of around 32 million t and stabilize at around 30 million t a year by 2030. According to Michael Hjorth Christensen, COO at CM Biomass of Copenhagen, there is a lack of investments in the industrial pellets segment in particular. Due to the sometimes long lead times in the implementation of such projects, Christensen and Meth expect more stability and security from politicians when it comes to funding guidelines. “Big manufacturers in particular have hardly any goods in stock and don’t increase stock levels either. The result is a shortfall in supply,” Christensen explained.
Dr. Christian Rakos, managing director of proPellets Austria, has been calling for investments in pellet storage, especially at the beginning of the heating period, for many years and hopes that the required laws will be passed in Austria.
Which wood should be used?
“We have to concentrate on mobilizing as much biomass as possible in a sustainable way. In the long-term, the success of the pellets industry depends largely on which wood is used in addition to wood waste from sawmills and crown wood,” Meth explained. For Rakos, wood from thinning is another interesting source.
In a spontaneous survey among the conference participants, 45% see pellet supply as the most urgent challenge, while for 13%, it is the shortage of staff. For 56% of respondents, expanding the raw material base, followed by reducing costs (24%), is the most important task facing the industry over the next five to ten years.
Market participants ask themselves how big sawmill by-product capacities are in Central Europe and how much of those capacities can be used for pelletizing. At the moment, most of the sawdust and wood shavings is used for the production of panels. In the future, there will be more competition between the panel industry and the pellet industry over supply.
