Wood pellets market in Italy

Earlier Report Observations

The Italian wood pellet market grew from 2.6 million tonnes in 2018 to 2.9 million tonnes in 2019, driven by increasing demand for renewable heating and supportive European policies for the energy transition. The country's high dependence on imports, covering over 80% of consumption, highlighted its exposure to supply chain dynamics.

Supply chain disruptions and increased transport costs from the COVID-19 pandemic lowered the market to 2.6 million tonnes in 2020. Despite a VAT reduction from 22% to 10% in 2021 aimed at boosting competitiveness, the market fell further to 2.5 million tonnes as raw material shortages and stricter emission norms constrained activity. In 2022, geopolitical tensions and rising fossil fuel prices sharply increased demand for pellets as a cheaper alternative, catapulting the market to a peak of 4.1 million tonnes.

The market corrected to 2.5 million tonnes in 2023, pressured by soaring sawdust costs that squeezed domestic producers and likely restricted import volumes. Throughout the period, the industry saw investments in production capacity, the emergence of agri-pellet from agricultural residues, and the tightening of quality certifications like ENplus.

Production wood pellets in Italy

In kind, 2017-2020, K t

On a global scale, Italy ranked as the 21st largest producer of wood pellets during the period from 2017 to 2020.

Top producers of wood pellets, 2017-2020

World map of production of wood pellets, 2017-2020

Italy's wood pellet production saw a two-year period of growth before declining. In 2019, production peaked at 452.0 K t, but by 2020, it had fallen to 400.0 K t, representing an 11.5% decrease from the previous year. The most significant increase occurred in 2018, with a rise of 12.5%.

Annual dynamics of production in Italy in kind, 2017-2020, K t

Exports wood pellets from Italy

Exports in kind, K t

Italy's wood pellet exports continued to decline for the third consecutive year. In 2020, exports dropped to 8 K t, down 12.4% from 2019. Over the 2017-2020 period, exports fell by 62.7%, with an annualized decline rate of 28.0%.

Annual dynamics of product's exports from Italy in kind, 2017-2020, K t

From 2017 to 2020, three key markets—Romania, Bulgaria, and Slovenia—collectively accounted for 56.0% of Italy's total wood pellet exports by volume.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Italy in kind, 2017-2020

Exports in value, M $ US

After two years of decline, Italy's wood pellet exports in value terms showed a slight recovery. In 2020, exports reached 3.5 M $ US, a marginal increase of 0.6% from 2019. However, over the 2017-2020 period, exports decreased by 44.8%, with an annualized decline of 18.0%. The lowest value was recorded in 2019 at 3.5 M $ US, and the largest drop occurred in 2018, with a 28.6% decrease.

Annual dynamics of product's exports from Italy in value, 2017-2020, M $ US

An analysis of Italy's wood pellet exports in value terms from 2017 to 2020 reveals a broad distribution across multiple markets. Romania, Bulgaria, and Slovenia accounted for 17.5%, 16.0%, and 11.0% of exports, respectively, totaling 44.6% of the overall value. The remaining 55.4% was spread among various other trading partners.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Italy in value, 2017-2020

Imports wood pellets to Italy

Imports in kind, K t

Following two years of growth, Italy's wood pellet imports by volume began to decline. In 2020, imports stood at 2 227 K t, a 9.5% decrease from 2019. Over the 2017-2020 period, imports increased by 23.6%, with an annualized growth rate of 7.3%. The highest volume was recorded in 2019 at 2 461 K t, and the largest increase occurred in 2018, with a 21.3% rise.

Annual dynamics of product's imports to Italy in kind, 2017-2020, K t

The structure of Italy's wood pellet imports by volume from 2017 to 2020 was diversified, with Austria, Germany, and Croatia accounting for 24.9%, 8.4%, and 6.8% of imports, respectively. Together, these three countries made up 40.1% of total flows, with no single nation holding a dominant position.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Italy in kind, 2017-2020

Imports in value, M $ US

After two years of growth, Italy's wood pellet imports in value terms declined. In 2020, imports amounted to 485.0 M $ US, a significant 15.0% drop from 2019. Over the 2017-2020 period, imports increased by 32.9%, with an annualized growth rate of 9.9%. The peak value was recorded in 2019 at 570.5 M $ US, and the largest increase occurred in 2018, with a 32.4% rise.

Annual dynamics of product's imports to Italy in value, 2017-2020, M $ US

From 2017 to 2020, Italy's wood pellet imports in value terms relied on a wide range of partner countries. Austria, Germany, and Croatia accounted for 26.6%, 8.7%, and 6.3% of imports, respectively, totaling 41.6% of the overall value. The remaining 58.4% was distributed among other trading partners.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Italy in value, 2017-2020