Wood pellet consumption in the European Union fell by 1.2% last year despite increased production. EU wood pellet demand and production are both expected to increase in 2024.
Last year, EU wood pellet consumption fell by 1.2% to 24.5 million metric tons (MMT), the first reduction since 2015, according to a report produced by the US Department of Agriculture.
This drop was caused by a mild winter and a reduced demand from the commercial power sector. Current low prices, combined with government incentives, are forecast to support the popularity of biomass for residential heating in 2024.
Demand for pellets by the industrial power sector is anticipated to remain stagnant this year. As EU pellet production is not keeping up with the growing demand, EU imports into the US are projected to partially recover from the dip reported in 2023.
A potential trade barrier is the EU Deforestation-free Supply Chain Regulation (EUDR), added the report.
The document states that 20.8 million metric tons of wood pellets were produced in 2023, which is up from 20.3 million metric tons in 2022 and 19.361 million metric tons in 2021.
It forecast production to increase to 21.2 million metric tons this year. The report expects total EU wood pellet production capacity to be 27.5 million metric tons per year for 2024, a rise of 300,000 from the preceding year.
Source: Global Wood
