Wood pellets market in Northern Europe

Earlier Report Observations

The wood pellets market in Northern Europe expanded to 16.2 million tons in 2019, supported by investments in production capacity and the growing competitiveness of biofuels following environmental taxes on fossil fuels. The market volume then contracted to 13.1 million tons in 2020.

A rebound to 16.0 million tons occurred in 2021 amid rising demand. However, the market faced a sharp decline to 13.7 million tons in 2022, as sawmill production cuts reduced the supply of key raw materials like sawdust, despite a surge in demand triggered by high natural gas prices after Russia's invasion of Ukraine. Volumes stabilized at 13.5 million tons in 2023, constrained by ongoing raw material shortages and market uncertainty linked to reduced sawmill output and weaker construction activity.

Production wood pellets in Northern Europe

In kind, 2017-2020, K t

Top producers of wood pellets, 2017-2020

World map of production of wood pellets, 2017-2020

Northern Europe's wood pellets production volume declined after a two-year period of growth. In 2020, production reached 6 927 K t, marking a slight reduction of 1.5% compared to 2019. Over the period from 2017 to 2020, production increased by 17.3%, which translates to an annualized growth rate of 5.5%. The peak production level was recorded in 2019 at 7 033 K t, with the largest annual increase of 18.3% also occurring that year.

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

In value, 2017-2020, M $ US

In 2020, the output value of wood pellets in Northern Europe was 3 597 M $ US, reflecting a decline of 21.3% compared to 2019. The lowest value during this period was recorded in 2018 at 3 474 M $ US, while the highest was in 2019 at 4 568 M $ US. The largest annual increase in value occurred in 2019, with a rise of 31.5%.

Annual dynamics of production in Northern Europe in value, 2017-2020, M $ US

Exports wood pellets from Northern Europe

Exports in kind, K t

Wood pellets exports from Northern Europe increased for the second consecutive year. In 2020, exports amounted to 5 009 K t, representing a solid year-over-year uptick of 14.1%. From 2017 to 2020, exports grew by 60.4%, equating to an annualized rate of 17.1%. The lowest export volume was recorded in 2018 at 2 951 K t, which saw the largest decline of 5.5% that year. In contrast, the largest increase occurred in 2019, with a jump of 48.8%.

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

Between 2017 and 2020, wood pellets exports from Northern Europe were distributed across a wide range of partner countries. Italy accounted for 8.1% of exports in kind, the Netherlands for 6.9%, and Belgium for 6.6%. Together, these three countries represented just 21.6% of total export flows.

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

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

Exports in value, M $ US

Wood pellets shipments from Northern Europe to abroad increased for the third consecutive year. In 2020, the export value stood at 958 M $ US, indicating a year-over-year rise of 9.4%. From 2017 to 2020, exports grew by 68%, which corresponds to an annualized rate of 18.9%.

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

During the 2017–2020 period, wood pellets from Northern Europe were supplied to many different markets. Even the largest destinations—Italy, the Netherlands, and Belgium—together represented only 23.7% of total exports in value terms.

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

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

Imports wood pellets to Northern Europe

Imports in kind, K t

After a two-year period of growth, cross-border shipments of wood pellets to Northern Europe declined. In 2020, imports amounted to approximately 11 153 K t, constituting a robust year-over-year drop of 17.9%. Over the period from 2017 to 2020, imports increased by 12%, equating to an annualized rate of 3.8%. The peak import volume was recorded in 2019 at 13 581 K t, while the largest annual increase occurred in 2018, with a rise of 21.1%.

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

From 2017 to 2020, the United States was the largest supplier of wood pellets to Northern Europe, accounting for 37.7% of imports in kind, followed by Canada at 13.6% and Russia at 9.4%. Together, these three countries formed 60.7% of total imports in kind.

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

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

Imports in value, M $ US

After a two-year period of improvement, the volume of wood pellets imports to Northern Europe declined. In 2020, imports amounted to 2 292 M $ US, showing a decline of 4.6% relative to the prior year. Over the 2017-2020 period, imports increased by 29.9%, with a compound annual growth rate (CAGR) of 9.1%. The highest import value was recorded in 2019 at 2 402 M $ US, and the largest annual increase occurred in 2018, with a rise of 28.1%.

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

Throughout 2017–2020, the United States remained the key source for imports in value terms, accounting for 48.9% of the total, followed by Canada at 11.9% and Russia at 7.3%. Together, these three directions accounted for 68.1% of total import flows.

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

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