EU wood pellet consumption forecast to grow in 2023

The European Union consumed a record 24.8 million metric tons of wood pellets in 2022, according to a report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network. Consumption is expected to grow to 25.6 million metric tons this year.

The report attributes much of last year’s growth in EU wood pellet consumption to increased residential use. Additional consumption this year is also expected to come primarily from residential demand supported by member state (MS) incentives and the implementation of the third Renewable Energy Directive (REDIII).

The report notes that EU demand for wood pellets has significantly outpaced domestic production over the past decade, resulting in increased imports of wood pellets, primarily from the U.S., Russia, Belarus and Ukraine. Last year, the EU imported an estimated 5.89 million metric tons of wood pellets at a value of $1.32 billion. A ban on wood pellet imports from Russia in mid-2022 has created additional demand for product sourced from other regions.

The EU is expected to consume 25.6 million metric tons of wood pellets this year, up from an estimated 24.8 million metric tons in 2022, and 22.951 million metric tons in 2021.

EU wood pellet imports are estimated at 6.2 million metric tons for 2023, down from 6.888 million metric tons in 2022, but up from 5.318 million metric tons in 2021.

According to the report, data on the number of EU-based wood pellet plants is currently unavailable for 2022 and 2023. There were, however, an estimated 774 wood pellet plants in the EU as of 2021, up from 753 in 2020. Total capacity is currently estimated at 27.2 million metric tons, up from 25.6 million metric tons last year and 25.6 million metric tons in 2021. Capacity use is forecast at 76.1 percent this year, down from 76.6 percent last year and 76.7 percent in 2021. Domestic production is expected to reach 20.7 million metric tons this year, up from 20.3 million metric tons in 2022 and 19.631 million metric tons in 2021.

The EU is currently expected to export 1.5 million metric tons of wood pellets in2023, up from 1.487 million metric tons in 2022, but down from 2.208 million metric tons in 2021.

Italy was the EU’s top consumer of wood pellets last year at 3.4 million metric tons, followed by Germany at 3.2 million metric tons and the Netherland at 2.95 million metric tons.

Germany is the EU’s top producer of wood pellets, with production at 3.57 million metric tons last year, followed by Latvia at 2.15 million metric tons and France at 2.05 million metric tons.

The Netherlands is the EU’s top importer of wood pellets, with 3.104 million metric tons imported last year, followed by Denmark at 2.66 million metric tons and Italy at 1.916 million metric tons.

The U.S. was the top supplier of wood pellets to the EU last year, at approximately 3.125 million metric tons, followed by Russia at 1.021 million metric tons and Ukraine at 401,000 metric tons. The top EU-based importer of U.S. wood pellets in 2022 was the Netherlands at 1.873 million metric tons, followed by Denmark at 560,000 metric tons and Belgium at 489,000 metric tons.

A full copy of the report is available on the USDA FAS GAIN website.