ENplus: Many European pellet producers impacted by COVID-19

By Erin Voegele | July 30, 2020

A recent survey completed by ENplus found that 75 percent of ENplus certified wood pellet producers and traders have been negatively affected by the COVID-19 pandemic, many by reduced demand from end users.

According to ENplus, 93 certified companies from 21 countries, most of which are based in Europe, participated in the survey. More than 59 percent of respondents are pellet producers, while 39 percent are traders and 2 percent are companies currently applying for certification. Approximately half of the survey respondents are located in Southern Europe, with 23 percent located in Eastern Europe, 14 percent located in Western Europe, 11 percent located in Northern Europe and 3 percent located outside of Europe.

Three-fourths of those surveyed said COVID-19 has negatively impacted their business. Approximately 19 percent reported experiencing no impact, and nearly 6 percent said the pandemic has had a positive impact on their business. Those reporting a positive impact primarily reported an unusual increase in end-user demand.

Of the three-fourths of respondents reporting a negative impact from COVID-19, more than 83 percent cited an unusual reduction in end-user demand for wood pellets during the first half of the year, with approximately half saying they have been severely affected by this drop in demand. In addition, 74 percent of those who have been negatively impacted said logistics constraints caused by lockdowns hurt their business. More than half of those affected by logistics challenges, however, said the impact was moderate. Most respondents reported that COVID-19 had no impact on the availability of raw materials for pellet producers or pellet supplies for traders.

More than half of survey respondents said that they expect to experience a decrease in pellet production and trade this year. Of the group expecting the decrease, approximately 45 percent expect a drop ranging from 21 percent to 50 percent of their certified volumes.

Approximately 49 percent of survey respondents said they expect the COVID-19 pandemic to result in increased  production costs, with the majority expecting an increase of 11 percent to 20 percent.

More than 64 percent of respondents said they are considering a change to their pellet pricing, with 38 percent considering a price increase and 26 percent considering a price reduction.

A full copy of the survey results can be downloaded from the ENplus website