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Germany's pellet production H1/2020 passes 1.5 million tonnes milestone

Despite the ongoing coronavirus (COVID-19) pandemic, new figures from Deutsche Pelletinstitut (DEPI) show that for the first time ever, over 1.5 million tonnes of wood pellets were produced in Germany in the first half of 2020, representing a 13 percent increase or 173 000 tonnes compared to H1/2019. Solid feedstock base, increasing domestic demand spurred by pellet boiler installations factors behind the production volume increases says Deutschen Energieholz- und Pellet-Verbands e.V – DEPV.

Despite the ongoing coronavirus (COVID-19) pandemic, new figures from Deutsche Pelletinstitut (DEPI) show that for the first time ever, over 1.5 million tonnes of wood pellets were produced in Germany in the first half of 2020, representing a 13 percent increase or 173 000 tonnes compared to H1/2019(graphic courtesy DEPI).

For the first time ever, Germany’s 163 wood pellet producers collectively surpassed 1.5 million tonnes of production in the first half of the year. At 1.502 million tonnes, the volume represents a 13 percent increase or 173 000 tonnes compared to 1.329 million tonnes from the same period in 2019, continuing an upward trend of recent years.

According to Deutschen Energieholz- und Pellet-Verbands e.V – DEPV, this production mirrors increasing demand for the climate-friendly fuel at home and abroad paired with a very good raw material base. German pellet producers have reacted to this by expanding and building new plants, especially in the wooded low mountain regions.

Over 96 percent ENplus A1 quality

Some 96.6 percent of the pellets produced in Germany are produced to the highest quality class, ENplusA1. Softwood is the main raw material (97.6 percent). The proportion of sawmill residues (85.8 percent) as the preferred starting material for German pellet producers has declined slightly compared to previous years, which is due to the high volume of damaged wood.

Pellet production is particularly interesting for forestry, as it creates a new market for unmerchantable wood such as wood that has been damaged by fire or insects.

Finally, the great CO2-saving potential of pellets is increasingly being used. As a result of the new government subsidy of up to 45 percent, significantly more homeowners, but also commercial enterprises, have been actively changing heating systems since this year. This is already evident in the number of first fillings, to which the pellet producers in this country reacted promptly. These framework conditions will enable the number of pellet firings to double to 1 million by 2030 and ensure that they are reliably supplied with domestic pellets, said a notably pleased Martin Bentele, Managing Director of DEPV

Significant increase in pellet boiler installations

Furthermore, according to DEPV, boiler manufacturers report sales increases for pellet heating systems of approximately 150 percent in the first half of 2020. In addition to the high subsidies, the carbon dioxide (CO2) price for fossil fuels that will start next year along with the fossil heating oil ban coming in to effect 2026 are reasons for the increased demand.

Bentele expects that the forecasts for both the sales of furnaces and the production volume will be exceeded at the end of the year.

Annual production could be over 3 million tonnes, which would be a strong signal for climate protection in the heating sector, said Martin Bentele.

In this context, the DEPV also assumes that the export quota will decline in the medium term. This is 16.4 percent in the first half of 2020, which is due to the demand from neighboring countries. At 21.0 percent, the share of bagged pellets is slightly lower than in previous years.

The price for pellets was stable and low in the first half of the year with an average of EUR 247.41 per tonne or EUR 0.0495 per kWh at 6 tonnes delivery price.

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