The production volume in Russia increased by 12% in 2018, bringing the total production to 1,600,000 tons. This is probably the consequence of the strong demand from Europe, and the subsidies for the export of this fuel, mainly addressed to Denmark, Belgium, Sweden, the United Kingdom and South Korea.
For the next 10 years, Russia expects an average annual growth rate of 10%. Being already among the top three ENplus pellet producing countries, it could become a world leader in the future.
Domestic consumption in Russia is still very low, around 10% of total production, because subsidies are lacking in many regions. Given the high transport costs to the rest of Europe, small producers obviously want to sell most of their production on the domestic market.
As soon as the storage points of combustible materials begin to professionalise the national market, ENplus certified wood pellets can become a required fuel in Russia too.
Despite this rather dynamic growth in supply, the demand for this fuel in Europe continues to grow faster than production.
In 2018, the demand for pellets in Europe increased by 2.1 million tons compared to 2017.
The increase was 8%, lower than the 2017’s increase of 11%, also because the heating seasons 2016- 2017 and 2017-2018 have been significantly colder than in previous years in most EU countries. In 2018, demand increased in the residential, commercial and industrial sectors, by approximately 5% and 13% respectively.
The lower growth in pellet consumption in 2018 compared to 2017, can be explained by the trend in sales of heating appliances in Europe, which have not experienced strong growth in this period.
Italy recorded a slight decrease of -4.5% in pellet consumption, but is still the largest consumer of residential pellets in Europe.
In recent years the winters in Italy have been hot and the autumns very cold, therefore the growth in the use of wood pellets has not been dynamic.
A series of policies focused on air quality and related media campaigns have contributed to reduce sales. This has influenced consumers and / or encouraged some producers to focus more on high quality products rather than on production
A cold spring last year partially eased the negative winter season, but pellet consumption decreased slightly. So everyone is looking towards the next winter season which could represent a turning point in the market – positive or negative.