Crossing the Pond: Breaking Down European Pellet Demand

By Kolby Hoagland | January 10, 2014

The United States pellet export market is rapidly growing to meet European demand for a less carbon intense substitute for coal. Large investments from European utilities have activated a massive build-out of the sector, pushing under construction plant capacities over the one million tons per year mark. The plants that have been completed and those that already had export capabilities are having an effect on the quantities crossing the pond. By the end of 2013, total annual pellet export grew by 42% to 2.7 million metric tons  from 2012. The quantities imported to each European country are not close to equivalent. The United Kingdom is currently the largest importer of U.S. produced pellets, bringing in three times more pellets than second place Belguim-Luxembourg. Below are the top nine importers of U.S. pellets for 2013 and their associated quantities.  

Top 9 Pellet Importers3

Pellet demand and consumption in Belguim, Denmark, Netherlands, Italy, and Germany will undoubtedly grow their with multiple plants dedicated to supplying in Eurozone countries. Regardless, it remains unlikely that the United Kingdom will be unthroned as the largest importer of U.S. pellets. The United Kingdom utility, Drax, is building two plants with a combined capacity of 1 million metric tons of capacity to feed their Yorkshire power plant. The graph below shows total U.S. pellet export, the United Kingdom portion, and the correlation of U.K. influence on the U.S. pellet export market.

US Pellet Export WorldWide and UK