Europe's residential and industrial wood pellet consumption fell on the year in 2023, data from industry association Bioenergy Europe's annual report show. The residential segment gained significant market share over the industrial sector, in which pellet burning for power generation dropped sharply.
Overall European pellet consumption last year fell to 30.1mn t, from 31.8mn t a year earlier. Of this, 17.7mn t, or 59pc of the total, was small-scale consumption by residential or commercial users with less than 1MW capacity, and the remaining 12.3mn t was for large-scale industrial use, down from 17.9mn t and 14.1mn t in 2022, respectively.
The premium segment's share rose to its highest in a decade, with the distribution between the two segments having held largely equal in recent years, according to the report.
Overall residential pellets consumption remained largely steady despite a four-year decrease in heating degree days (HDDs) — which combine the number of days that require heating with the amount of heating needed — probably supported by regularly increasing sales of pellet-fired appliances that reached record highs in 2022 after dropping sharply the following year.
Such steady consumption in the residential market "is a positive sign, not a stagnation", when combined with the drop in heating demand, Bioenergy Europe said in a press statement.
Germany overtook Italy as last year's top small-scale pellet consumer in Europe, at 3.3mn t, supported by its substantial small-scale commercial pellet use. In Italy, consumption shrunk by 7.8pc on the year to 2.8mn t in 2023. And France ranked third in small-scale pellet consumption, which stayed flat at 2.5mn t.
But premium-grade pellet consumption was not as strong as European producers would have liked. Unusually mild weather in winter enabled "Italian neighbours to enjoy many cozy evenings outdoors but left [Austrian] producers and traders with cold feet and full warehouses", Doris Stiksl, chief executive of ProPellets Austria, said in an expert comment in the report. New players from Canada and South America also increased competition for Austrian producers, and an "unclear subsidy situation" affected the installation of new pellet-fired boilers, she said.
Industrial use down
Large-scale industrial consumption was particularly affected by a drop in pellet burn for power-only generation, which fell to 6.3mn t in 2023 from 7.2mn t a year earlier in the UK, to 1.8mn t from 2.5mn t in the Netherlands and to 220,000t from 650,000t in Belgium. The drop in Belgium was largely caused by the shutdown of the 205MW Rodenhuize power plant in March last year.
But pellet use for combined-heat-and-power (CHP) generation rose overall, as a small drop in Danish consumption was more than offset by a sharp increase in France, while Sweden also registered a small increase on the year.
In Sweden, the faster decline in electricity prices compared with pellet prices led to "a customer shift in pellet use from low-temperature residential heating to medium-scale and industrial heating", Swedish pellet manufacturer Scandbio's development and sustainability manager, Gert Pettersson, said in an expert comment in the report, adding that pellet price volatility has also resulted in prices and volumes "now negotiated in shorter terms than historically."
Swedish small-scale consumption fell by just over 11,000t to 643,000t, while large-scale use for CHP rose by 68,000t to 1.9mn t.
