In Sweden, municipal energy company Härjeåns Energi AB, part of the Härjeåns Group, has announced that it is closing its wood pellet manufacturing facility in Sveg, citing that it "no longer sees an economically sustainable business model."
A pioneer in the bioenergy sector, Härjeåns has been refining biofuels at its facility in Sveg since the late 1980s. Over the years, the plant has been an important part of the local industry and is strongly associated with the town.
However, according to the company, the market has changed, which means that the company no longer sees an economically sustainable business model. Therefore, a decision has been made to discontinue pellet production in Sveg.
We have evaluated various alternatives, such as selling and restructuring the business, but have not found a long-term sustainable way forward. Based on the current market situation and the conditions we see going forward, we have made a difficult but necessary decision to discontinue pellet production, said Cecilia Norberg, President and CEO of Härjeåns.
Market uncertainty and investment needs
Pellet production has been affected by major changes in the energy market in recent years. Both the COVID-19 pandemic and the war in Ukraine have contributed to reduced consumption and a shrinking private market for pellets.
At the same time, the supply of raw materials has become more uncertain. Additionally, the Sveg plant faces significant investment needs.
The facility was not originally built for pellet production and would need extensive reconstruction to become a competitive plant.
According to the company, the investments required in the near term cannot be justified based on the current market situation.
The closure will begin immediately, but production is expected to continue until spring next year, when the factory will be closed, said Cecilia Norberg.
Following the closure, Härjeåns Energi as a company will remain and will continue to handle fuel and produce the heat needed to supply Sveg’s district heating network.
This is a tough but unfortunately necessary decision. We understand that the announcement raises concerns among our employees and partners. An MBL process together with our trade unions has been initiated, which means that we cannot currently comment on details of the closure plan or its consequences for individuals. Our highest priority is that those affected receive clear and transparent information throughout the process, said Cecilia Norberg.
Major local impact
Today, 30 employees work at Härjeåns Energi and the pellet production in Sveg. A closure of this type affects many and has great significance in a small town. Härjeåns will therefore have a close dialogue with the municipality and other stakeholders to ensure a responsible and orderly closure.
We want to take responsibility in the process and cooperate to find solutions that make it easier for those affected, concluded Cecilia Norberg.
