EU wood pellet demand to set a new record in 2022

The European Union consumed a record 23.1 million metric tons of wood pellets in 2021, according to a new report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network. Demand is expected to expand to 24.3 million metric tons this year.

The report primarily attributes the record-breaking 2021 consumption to increased residential use in Germany and cofiring of wood pellets with coal in the Netherlands. Increased consumption this year is expected to result from the expansion of EU residential markets, mainly in Germany and France, boosted by support programs for the installation of biomass boilers and the high price of fossil fuels.

The report notes that EU demand for pellets has significantly outpaced domestic production for the past 10 years, resulting in increased imports from Russia, the U.S., Belarus and Ukraine. The EU, however, in April 2022 banned the import of Russian wood pellets in response to the country’s invasion of Ukraine.

The report estimates that the EU has approximately 25.8 million metric tons of wood pellet capacity in place this year, up slightly form 25.45 million metric tons last year and 24.7 million metric tons in 2019. Capacity use is projected at 78.3 percent this year, compared to 77.4 percent in 2021 and 77.8 percent in 2020.

EU production of wood pellets is expected to reach 20.2 million metric tons in 2020, up from 19.7 million metric tons in 2021 and 19.209 million metric tons in 2020. Imports are expected to reach 6 million metric tons this year, up from 5.428 million metric tons last year and 4.681 million metric tons in 2020. The EU is expected to export 2.25 million metric tons of wood pellets in 2022, up from 2.21 million metric tons in 2021 and 1.17 million metric tons in 2020.

Consumption is expected to reach 24.3 million metric tons in 2022, compared to 23.128 million metric tons in 2021 and 22.469 million metric tons in 2020.

Of the 27 EU countries, Italy was the top pellet consumer last year, at 3.4 million metric tons, followed by the Netherland and Germany, which each consumed 2.9 million metric tons of wood pellets.

Germany is the EU’s top producer of wood pellets, with production estimated at 3.3 million metric tons last year, followed by Latvia at 2.3 million metric tons and Sweden at 1.9 million metric tons.

Denmark was the EU’s top importer of wood pellets last year, at 3.184 million metric tons, followed by the Netherlands at 2.822 million metric tons and Italy at 1.902 million metric tons. The Netherlands sourced the most imports from the U.S. last year at 1.203 million metric tons, followed by Denmark at 329,000 metric tons and Belgium at 162,000 metric tons. Total EU imports of wood pellets from the U.S. was at 1.853 million metric tons last year, up from 1.247 million metric tons in 2020. Russia was the top supplier of wood pellets to the EU last year at 1.914 million metric tons, followed by the U.S. at 1.853 million metric tons and Belarus at 594,000 metric tons.

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