Wood pellets market in Luxembourg

Earlier Report Observations

The Luxembourg wood pellet market expanded significantly from 2018, driven by the implementation of a 2016 law promoting renewable energy and rational energy use, which took effect in 2017. This policy framework created subsidies and incentives for using wood pellets, boosting domestic demand. Local production ramped up from 45 000 t to 63 000 t between 2018 and 2019, where it remained stable through 2021, supporting a growing market volume that reached 48 457 t by the end of this period.

The European energy crisis triggered by the war in Ukraine in 2022 caused a surge in demand for wood pellets as households and businesses sought alternatives to fossil fuels. This led to a rush for pellet stoves, doubling demand and pushing market volume to 62 227 t in 2022 and further to 76 621 t in 2023. Despite local production running at full capacity, supply was constrained by competition for raw materials with other wood industries, leading to increased imports. A temporary government subsidy for bulk pellet purchases helped cushion price spikes for consumers during this period.

By 2024, the market began to stabilize as supply caught up with demand, aided by increased production capacities across Europe and diversified import sources from countries like Canada and Spain. New regulations concerning the sale of wood from public forests were applied to better manage local wood-energy resources. Continued quality certifications for locally produced pellets and sustained policy support for the renewable heating sector underpinned the market's stability into 2025, with prices returning to lower levels after the 2022 peak.

Production wood pellets in Luxembourg

In kind, 2018-2021, t

Top producers of wood pellets, 2018-2021

World map of production of wood pellets, 2018-2021

In 2021, Luxembourg produced 63 000 tons of wood pellets, showing little change compared to 2020. Over the period from 2018 to 2021, production increased by 40%, with a compound annual growth rate of 11.9%. The highest production level was recorded in 2019 at 63 000 tons, which also marked the largest increase of 40.0% that year. In 2020, production saw its largest decline, dropping by 0.0%.

Annual dynamics of production in Luxembourg in kind, 2018-2021, t

In value, 2018-2021, K $ US

In 2021, the output of wood pellets in Luxembourg was valued at 10 339 thousand US dollars, showing a slight gain of 0.8% year-over-year. Between 2018 and 2021, production increased by 31.5%, equating to an annualized rate of 9.5%. The maximum value was recorded in 2019 at 11 701 thousand US dollars, which also saw the largest increase of 48.8%. In 2020, production experienced its largest decline, falling by 12.3%.

Annual dynamics of production in Luxembourg in value, 2018-2021, K $ US

Exports wood pellets from Luxembourg

Exports in kind, t

After a two-year contraction, exported wood pellet volumes from Luxembourg increased in 2021. Exports amounted to 28 561 tons, which is a 3.9% increase relative to the prior year. The minimum value was recorded in 2020 at 27 488 tons, while the largest decline occurred in 2019 with a drop of 1.5%.

Annual dynamics of product's exports from Luxembourg in kind, 2018-2021, t

Throughout 2018 to 2021, the country structure of exports in kind was primarily shaped by Germany and France, which together accounted for 92.7% of total flows. Other markets formed a long tail, contributing smaller shares.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Luxembourg in kind, 2018-2021

Exports in value, K $ US

Luxembourg exported 4 687 thousand US dollars worth of wood pellets in 2021, showing a moderate rise of 4.7% relative to the prior year. Between 2018 and 2021, exports decreased by 4.3%, equating to an annualized rate of 1.5%. The minimum value was recorded in 2020 at 4 475 thousand US dollars, while the maximum value was in 2019 at 5 124 thousand US dollars. The largest decline occurred in 2020 with a drop of 12.7%.

Annual dynamics of product's exports from Luxembourg in value, 2018-2021, K $ US

In 2018 to 2021, Germany and France were the dominant buyers of wood pellets from Luxembourg, together taking 92.0% of total exports in value terms. Other partners formed a less significant background, contributing smaller amounts.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Luxembourg in value, 2018-2021

Imports wood pellets to Luxembourg

Imports in kind, t

Cross-border shipments of wood pellets to Luxembourg increased for the third consecutive year. In 2021, import volume amounted to 14 018 tons, indicating a 27.5% increase over the past year. Between 2018 and 2021, imports increased by 66.2%, equating to an annualized rate of 18.5%.

Annual dynamics of product's imports to Luxembourg in kind, 2018-2021, t

In 2018 to 2021, Belgium accounted for 80.8% of total imports in kind, while the remaining flows were distributed among a broad group of smaller countries.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Luxembourg in kind, 2018-2021

Imports in value, K $ US

Foreign wood pellet supplies to Luxembourg increased for the third consecutive year. In 2021, import volume reached 3 606 thousand US dollars, up by 28.6% year-over-year. Between 2018 and 2021, imports increased by 63.2%, equating to an annualized rate of 17.7%.

Annual dynamics of product's imports to Luxembourg in value, 2018-2021, K $ US

In 2018 to 2021, Belgium remained the key direction for wood pellets to Luxembourg, accounting for 72.6% of total imports in value terms. Other destinations were much less significant, contributing smaller shares.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Luxembourg in value, 2018-2021