BOTHELL, Wash. – Europe’s demand for wood pellet is expected to increase by 30 to 40 percent over the next five years, according to a new report released by Wood Resources International (WRI). 

This bodes well for U.S. and Canadian wood pellet manufacturers like Enviva Partners, Drax, which recently acquired Pinnacle Renewable Energy, and other companies who largely export their products to Europe and Asia. 

WRI says Europe represents about 75% of global pellet demand. European nations’ use of pellets includes residential heating, 40%; power plants, 36%; commercial heating, 14%; and combined heat and power plants, 10%. Demand is strong in both the industrial and residential sectors and is likely to continue even beyond 2025 for several reasons. They include:

• EU has set ambitious and rising targets for renewable energy supply,
• Biomass will play an important role in meeting those targets,
• Pellets offer several advantages over other forms of biomass in many applications.

According to WRI’s study - European Wood Pellets – Where will the raw-material come from? -  the rise in wood pellet consumption will put significant pressure on raw material markets in Europe and require new sources such as forest residues, recovered wood, and energy crops.

Currently, sawmill residues make up 85% of the mix for wood pellet production, followed by roundwood, 13%; and recovered wood, 2%. The WRI study notes that while wood residues will remain an important feedstock, especially in northern and western Europe, they will not be sufficient to meet the future fiber demand from the growing wood pellet sector.

As a result, Europe will likely draw upon the experience of North American producers, who have shown it is possible to use more forest residues as fiber furnish. Although it yields pellets with higher ash content, it is often a lower-cost raw material than, for example, roundwood and wood chips. This practice is increasingly common in both the U.S. South (mainly for pellets exported to Europe) and Canada (mainly exported to Europe and Asia). In Western Canada, the sawmill residue share of the total feedstock has fallen from 97% in 2010 to 72% in 2020, with the balance being forest residues and roundwood, WRI says.

For information about purchasing the 75-page report, contact Hakan Ekstrom or Glen O’Kelly ([email protected]). Click here to view the report's table of contents.