Wood pellet exports from the United States and Canada to Europe reached 1.6 million tons in 2010, a doubling of shipments in just two years, says an industry research group. The demand is driven by a European Union initiative to derive more power from renewable resources.

As a result, over the past two years, North America has become a major supplier of wood pellets to Europe. In 2010, an estimated 1.6 million tons of pellets were shipped from the U.S. and Canada to the Netherlands, the UK and Belgium, according to the North American Wood Fiber Review - double the 2008 volume. The figure is set to grow again as German energy giant RWE builds the world's largest wood pellet plant in Georgia.

The European Union says that by 2020, at least 20 percent of total energy consumption should be supplied by renewable energy resources. To reach this target, many countries have increased their consumption of woody biomass in the form of both wood chips and pellets the past few years. In 2010, just over 11 million tons of wood pellets were consumed, which was about seven percent higher than in 2009.

The rapid move to biomass fuel is not without controversy, especially for manufacturers of panel products. The growing demand generates competition for raw materials for MDF and other engineered wood products, driving up raw material costs and costs for wood panels products for secondary wood product manufacturers.

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