Annual EU report projects increased pellet, biogas consumption

The European Union recently published its annual biofuels report for 2013 with the USDA Foreign Agricultural Service’s Global Agricultural Information Network, reporting that the European Commission expects solid biomass for heat and power generation will play an important role in meeting renewable energy targets.

According to the report, the European Biomass Association expects consumption of wood pellets in the EU to rise drastically, reaching 20 to 32 million tons of oil equivalent (Mtoe), or approximately 50 to 80 million metric tons, by 2020. Consumption of wood pellets was only 2.5 Mtoe in 2008.

The EU is currently the world’s largest market for wood pellets. While domestic production and imports have both grown since 2006, imports have grown at a faster rate over the past few years. In 2006 the EU produced approximately 3.52 million metric tons of wood pellets. That same year, the EU imported only 800,000 metric tons of the fuel. By 2012, production had grown to 10 million metric tons, with imports reaching 4.49 million metric tons. Domestic production is projected to reach 10.15 million metric tons in 2013 and 10.3 million metric tons in 2013. Imports, however, are expected to continue to grow at a faster pace, reaching 6 million metric tons in 2013 and 7 million metric tons in 2014.

Consumption has also grown rapidly, from 4.606 million metric tons in 2006, to 14.3 million metric tons last year. In 2013, the EU is expected to consume 16 million metric tons of wood pellets, with 17.1 million metric tons of consumption projected in 2014.

Germany is currently the EU’s largest pellet producer, with 2 million metric tons of production expected this year. Sweden and Austria are each expected to produce a relative 1.25 million metric tons and 950,000 metric tons of wood pellets in 2013. Portugal, France, Italy and Poland are also ranked among Europe’s top wood pellet producing nations. Overall production capacity use in Europe has held steady at near 62 percent since 2010. That trend is expected to continue into 2014.

The U.K. is currently Europe’s largest consumer of pellets, with 4.54 million metric tons of demand expected this year. Denmark and the Netherlands round out the top three consumers, with 2.5 million metric tons and 2 million metric tons of consumption expected this year. Sweden, Germany and Belgium also consume large volumes of pellets.

Within the report, the authors also specify that while pellet consumption in the U.K., the Netherlands and Belgium is dominated by large-scale power plants, demand in Denmark and Sweden also results from household and medium-scale district heating consumption. Pellets consumed in Germany, Austria, Italy and France are mainly used in small-scale residential and industrial boilers for heating purposes.

The U.S. was the main supplier of wood pellets in the 2012, with 1.764 million metric tons delivered. Canada supplied 1.346 million metric tons of pellets to Europe. Russia, Ukraine, Croatia and Belarus supplied a relative 637,000 metric tons, 217,000 metric tons, 136,000 metric tons and 112,000 metric tons of wood pellets to Europe.

The report also addresses the EU’s biogas sector. Overall, biogas production from biomass is expected to increase, reaching 8.4 Mtoe in 2020. According to the report, that volume equates to approximately 8 percent of total biomass use.

A wide variety of feedstocks are used to generate biogas for heat and power production in Europe, including crops, manure, agricultural and food waste, landfills, and sewage sludge. According to the report, European farmers are investing in on-farm biogas production, particularly those in Germany, which is home to more than 80 percent of the EU’s production of biogas from biomass. However, changing incentives in 2012 have slowed the pace of development.

The report also notes that half of the Netherland’s biogas plants are expected to close down within five years due to the termination of subsidies in 2016/17, which will result in negative margins.

While the majority of biogas is used to produce heat and electricity, the report notes that a growing number of large-scale operations are purifying biogas for use in the natural gas grid and as transportation fuel. Approximately 44 percent of the biogas produced in Sweden in 2010 was used as transportation fuel or fed into the gas distribution network.

The report also addresses the current state of EU biofuel policy, as well as first generation and advanced liquid biofuel production. The full report can be downloaded here.