Canadian wood pellet production to reach 3.8M metric tons in 2021

Canadian wood pellet production is expected to grow to 3.8 million metric tons in 2021, according to a report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network on July 8.

According to the report, growth in wood pellet production this year is expected to be achieved as plant capacity utilization improves. The report also notes that production expansion continues to be primarily driven by growth in exports, particularly to the U.K. and Japan. Domestic use of wood pellets for heat and power generation, however, remains limited.

Canadian wood pellet production is expected to grow by approximately 300,000 metric tons this year, reaching 3.8 million metric tons, up from 3.5 million metric tons in 2020.

Canadian wood pellet exports are forecast to reach 3.3 million metric tons this year, up from 2.901 million metric tons in 2020 and 2.637 million metric tons in 2019.

The U.K. was the top destination for Canadian wood pellet exports last year at 1.456 million metric tons, followed by Japan at 611,245 metric tons and the Netherlands at 398,859 metric tons. The U.K. accounted for 50 percent of Canadian wood pellet exports in 2020, while Japan accounted for 21 percent and the Netherlands accounted for 14 percent.

Domestic consumption of wood pellets is also expected to grow, but at a much lower rate. Canada consumed an estimated 430,000 metric tons of wood pellets in 2020. Consumption is expected to grow to 450,000 metric tons this year.

According to the report, Canada is expected to have 47 wood pellet plants in operation this year with a combined 5.054 metric tons of production capacity, up from 46 plants with a combined 4.856 metric tons of capacity as of 2020. Capacity use is forecast to reach 75.2 percent this year, up from 72.1 percent in 2020 and 69.1 percent in 2019.

A full copy of the report can be downloaded from the USDA FAS GAIN website.