Bioenergy Europe Report: EU Pellet Industry Stagnates Due to Fossil Fuel Dependence

Bioenergy has unveiled its latest Statistical Report on Pellets, accompanied by a Policy Brief. The report examines the global market's development over the past year, with a particular focus on the European sector.

“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,” said Jean-Marc Jossart, 's secretary general.

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The report indicates that after two years of record consumption, production, and sales of pellet-based appliances, the global pellet industry faced substantial challenges in 2023. This year marked a stagnation in pellet production and consumption worldwide, ending a two-decade trend of continuous growth.

Despite minor market contractions, the remains the leading global producer and consumer of pellets, accounting for 44% of global production and 50% of global consumption.

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The European pellet industry faces three major challenges: increased input costs, reduced industrial demand, and an exceptionally warm winter. Elevated electricity costs, a critical factor in pellet production, have led to higher pellet prices. The volatile energy market has prompted power-only producers to cut back on production. Additionally, record high winter temperatures diminished the need for heating, thus reducing pellet demand.

However, residential use of pellets for heating has remained robust. In 2023, residential and commercial consumption of pellets reached 59%, the highest level in a decade. Pellet heating is particularly advantageous for households in rural areas with abundant and limited energy system connections. Biomass heating helps reduce heat-related electricity demand during times when renewable electricity production is typically lower and less efficient.

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Bioenergy Europe emphasized that bioenergy can complement electrification by reducing electricity grid loads, lowering overall electricity needs, increasing energy efficiency, and securing the EU's energy future. The trade association called on the new EU leadership to ensure effective implementation of the Green Deal and to continue replacing fossil fuels with renewable sources such as bioenergy from wood pellets.

To support this transition, Bioenergy Europe proposed “3 Steps Towards the Energy Transition” for the new EU leadership, aiming to enhance climate change mitigation and boost Europe's energy autonomy.

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