text: With pellets production up 40% in the last two years, Jackie Jones reports on discussion at the European Pellets conference.
  There have been a lot of changes in the pellets world since the last European pellets conference in 2005. The general level of interest has increased, and production has blossomed all over Europe. But with this growth have come new challenges.
  The pellet-producing countries have increased their production by 40% over the past two years, according to figures presented by Chair of the recent European Pellets Conference, Christiane Egger. Likewise, consumption has increased by between 40% and 50%. Furthermore, the profile of the ‘big’ league is changing, with France now on the point of emerging as one of the largest players. Looking forward, many of the newer members of the European Union, from the Baltic States and Eastern Europe, have good forestry resources and therefore significant growth is expected in those regions.
  One of the noticeable changes over the past year or two has been strong price fluctuation, which has threatened to destabilize the market. Various reasons underlie these price swings, says Christiane Egger. The winter of 2005-2006 was both long and cold, which increased demand from the heating market and slowed the supply, by making access to forests more difficult for the foresters. The pellet supply chain did not help, she adds, in having inadequate stocks to draw on. For although the previous, mild, winter had left producers with unsold stocks, many producers – fearing they may not be able to sell enough of their stocks into the homes market – had sold large quantities to the power generation sector. She also suspects that some of the price increases may have been engineered by some less scrupulous dealers more interested in making a quick profit than in creating a stable, long-term market.
  The global trade in wood pellets has expanded by around 40% in the last two years. Indeed in some areas this has placed strains on the supply of sawdust, the most common feedstock for pellets
  Pellets are not the only wood product to have experienced a price rise – increased activity in the building sector has increased the demand for wood and put up price of wood.
  The price of pellets needs to be kept fair and stable, says Christiane Egger. Many others agree – particularly those from countries or regions where pellets are largely used in the home heating market. This sector knows that when householders are contemplating whether or not to install pellet-based heating, they want to know they can rely on a secure supply of heating fuel at a relatively stable price. If they perceive pellets as a risky option, they may opt for another, fossil-based, heating solution instead. This would have consequences for the pellet stove or boilers industries, the sector as a whole, and the environment. All the same, strong demand has stimulated production of pellets.
  A typical pellets production plant produces 100,000 tonnes per year. Interestingly, this is more or less equal to the current demand for heating pellets from a country like France. However, the Les Awirs 80 MW pulverized coal power plant in Belgium, converted 100% to pellets in 2005, consumes 350,000-400,000 tonnes of pellets a year, according to Didier Marchal of ValBiom. Is there a moral dilemma here? Is it intrinsically better, or more valuable, to use pellets in one type of application rather than another? There certainly seem to be two ‘camps’ within the pellets sector, both with a firm footing in market realities.
  The one group is focused largely on building a sound market for a pellets-based heating sector, with a strong emphasis on the local and green properties of pellets. In many countries and regions, pellets’ green image is a significant market driver, especially in these days of heightened awareness of carbon footprints. Many consumers switch to pellets because they like both the fact that the fuel is produced just down the road (rather than being imported from the Middle East or Russia), thereby supporting local employment and putting money into the regional economy, and that pellets are a low-carbon renewable source.
  One bone of contention is imports of pellets, especially across continents (to Europe from North America). However, just as public awareness of ‘food miles’ has increased, so has awareness of ‘pellet miles’. Transcontinental sourcing of pellets can reduce the appeal of the fuel for this market, tarnishing – for some – that green image.