
1/ Wood pellet market
- On June 20, Bioenergy Europe released its Statistical Report on wood Pellets and its Policy Brief. The report analyses the development of the world’s wood pellet market over the past year with a deep dive into the European market.
- “Despite significant progress, our industry’s growth is being stunted by the EU’s continued dependence on fossil fuels. It’s imperative that we accelerate the transition to renewable energy sources to stabilize energy prices and combat climate change effectively,” states Bioenergy Europe Secretary General, Jean-Marc Jossart.
- After two remarkable years, marked by record consumption and production, as well as record sales of wood pellet-based appliances, the global wood pellet industry in 2023 has been facing significant challenges. The production and consumption of wood pellets stagnated worldwide, breaking a 2 decade-long trend of uninterrupted growth. Despite slight contractions in the market, the European Union remains the world’s largest wood pellet producer and consumer. It produces 44% of the world’s wood pellets and consumes 50%.
- The challenges facing the European wood pellet industry are threefold: higher input prices, falling industrial demand, and a record warm winter. Electricity, a key cost for wood pellet production, remains more expensive following the energy crisis leading to elevated wood pellet prices. Higher wood pellet prices and a volatile energy market have caused power-only producers to significantly scale back on production. Finally, record high temperatures during the winter reduced the need for heating, decreasing the demand for wood pellets.
- Despite the challenges the use of wood pellets for heating in the residential market remained strong. In 2023 the share of residential and commercial consumption of wood pellets reached 59%, the highest in a decade. Wood pellet heating is a good option for households, especially in rural areas rich in biomass with lower connections to the energy system. Biomass heating reduces heat-related electricity demand at the time of year when renewable electricity production is often lower and less efficient. By reducing the load on electricity grid, bioenergy can complement electrification, lower electricity needs, increase energy efficiency, and safeguard the EU’s energy future.
- To fight climate change and increase Europe’s energy autonomy, the new EU leadership needs to ensure a wise implementation of the Green Deal while continuing to replace fossil fuel with renewables such as bioenergy from wood pellets. To that end, Bioenergy Europe has put together three proposals for the new EU leadership “3 Steps Towards the Energy Transition”. The European bioenergy sector is ready to scale up and keep pushing forward for a more sustainable, affordable and innovative EU.

2/ Key Findings
- Stagnation in Global Wood Pellet Market: After two record-breaking years, the global wood pellet market experienced a slowdown in 2023.
- Europe Remains Dominant: Despite the challenges, the EU continues to be the world’s largest producer and consumer of wood pellets, accounting for 44% of production and 50% of consumption.
- Challenges Facing the European Wood Pellet Industry:
- Increased input costs, primarily due to higher electricity prices.
- Declining industrial demand for wood pellets.
- Record-breaking warm winter leading to reduced heating demand.
- Residential Market Resilience: Despite overall challenges, the residential and commercial consumption of wood pellets grew to its highest level in a decade, reaching 59% of total consumption.
- Potential of Wood pellets: Wood pellet heating is seen as a viable option for households, especially in rural areas, as it reduces reliance on electricity and can complement the electrification process.
- Call for Action: Bioenergy Europe urges the EU to accelerate the transition to renewable energy sources, including wood pellets, to combat climate change and reduce dependence on fossil fuels.
3/ Overall Assessment
- The report highlights the complex situation of the wood pellet market. While the residential sector shows promise, the industry is grappling with significant challenges stemming from economic and climatic factors. The report emphasizes the potential of wood pellets as a renewable energy source and calls for supportive policies to foster growth in the sector.
Note: The information in this article is for reference only and may change depending on the manufacturer and source of raw materials. For the most accurate information, you should consult experts, wood pellet suppliers or contact Overc.vn to answer your questions and problems related to wood pellets and wood chips.
Source:
- Biomass Magazine
- Overc Team synthesise, analyse and write articles.
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OVERC was established in Vietnam, which has 17 FTA (Free Trade Agreement).
Vietnam is one of the countries with the most FTAs in the world.
Our main activities are manufacturing and distributing Wood Pellets and Wood Waste. Our wood pellet products, which are made from Acacia veneer residual 100% or wood waste (logs, sawdust, wood chips, wood shavings,…), have been exported to many countries around the world such as Japan, Korea, EU, etc.
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