In 2022, global demand for wood pellets amounted to 46.2 million t, while the production output totaled 46.8 million t. Demand in the EU decreased slightly year-on-year to 24.2 million t. Consumption in Asia rose from 6.9 million t in 2021 to 9.5 million t in 2022. This is mainly due to the burgeoning demand for energy in the industrial sectors of Japan and South Korea. Consumption of industrial pellets reached 4.6 million t in Japan and 4.9 million t in South Korea.
In 2022, 24.7 million t of pellets were produced in Europe, 20.6 million t of which in the EU. Production output in North America amounted to 14.3 million t. The USA remains the largest pellet producer in the world with an output of 10.8 million t. North America and Asia primarily produce industrial pellets, while certified pellets dominate the EU market. The industrial sector accounts for 44% of pellet demand in Europe, while 56% are used in the residential and commercial sectors.
Room for improvement
In China, around 2,000 manufacturing companies produce 20 million t of pellets and briquettes are produced from solid biofuels every year. In the cities in the east of the country, natural gas is mainly used for heating and cooking. Further west, in rural regions, coal and biomass are the predominant fuels. “Chinese wood pellets are mostly of poorer quality than European pellets, so we mostly use very simple, domestically produced boilers. Many boilers also use straw bales as fuel. One million biomass boilers are sold each year,” Dr. Guangqing Liu from the Beijing University of Technical Chemistry told participants. China plans to become carbon-neutral by 2060.
Focus on Asia
“Canada produced 3.8 million t of pellets in 2022, and has a capacity of 4 million t. At 300,000 t, domestic consumption is very low, however. Meanwhile, natural gas is very popular and is viewed as green energy by large parts of the population,” Gordon Murray of the Wood Pellet Association of Canada told the audience. In 2023, Canada exported 3.26 million t, compared to 3.5 million t in the year before. According to Murray, it is not yet possible to say to what extent last year’s wildfires, which destroyed 185,000 hectares of forests, will affect production volumes. Export markets have changed over the past eight years. In 2017, 69% of pellets were shipped to Great Britain. In 2023, that percentage was down to only 17%. The opposite can be observed in Japan. In 2017, the Asian country received 11% of Canadas total exports. In 2023, it already accounted for 52%. India is not an interesting market for Canada as agricultural pellets are mostly used there. Murray does see a lot of potential in Taiwan and Indonesia, though. “The two countries use industrial pellets to generate electricity, and a clear upward trend can be observed there,” Murray explained.
It’s the Olympic spirit that counts
In Turkey, the share of coal as an energy source is 35%, followed by natural gas (21%) and hydroelectricity (19%). At only 3%, biomass accounts for a very small percentage in the generation of energy. In the housing sector, natural gas is the predominant source of energy (80%). Since 2016, the consumption of natural gas for heat generation has risen by 80% to 265 TWh, while the share of coal has halved. Turkey has around 23.2 million hectares of forests. In 2022, 4.6 million m³ of firewood were produced, which corresponds to 15% of the country’s total wood consumption. The use of softwood industrial-quality log wood has increased by 50% to around 18 million m³. Turkey has 59 pellet mills with a production capacity of 5,000 to 40,000 t a year. 28 pellet mills produce ENplus-certified pellets for the EU market. The pellets consist of sawdust, but also of nut shells and olive pits, and are usually of low quality. In 2022, Turkey exported 138,000 t of wood pellets, mostly to Bulgaria, Italy and Lithuania, and imported 65,000 t, Dr. Özben Kutlu from the Ege University in Izmir/TR told participants.
Always on the podium
“Vietnam is the second biggest pellet exporter and one of the largest producers in the world. We are also the number-one supplier of wood chips and one of the biggest furniture manufacturers,” Dr. Kenneth Tran from the Vietnamese pellet company Ayo Biomass said confidently. Japan and South Korea are Vietnam’s main export markets with a share of over 95%. From Tran’s perspective, export volumes will continue to grow, among other things because of the logistics problems in the US and the unclear economic situation of Enviva, the world’s largest pellet manufacturer. Most of the wood pellets from the north and south of Vietnam are exported to South Korea, which does not require certified pellets. In central Vietnam, with its plantations, certified pellets are produced for Japan.
