Pellet market development in Finland lags behind the markets in Sweden or Denmark. The annual production is remarkably low considering the huge technical potential. Total production figures vary considerably depending on the source. It is clear that production volumes increased steadily over the past years.
In 2008, production might have exceeded 370,000 tons. This was accompanied by the development of additional pellet production plants. Today, pellets are produced at around 20 sites. Most of the producers work with small production capacities (< 30,000 tons), only one site has a capacity of more than 70,000 tons. The total production capacity in Finland may have reached 680,000 tons in 2008. It is important to note that rapid growth of installed capacities (and actual production) can be expected for the near future. It is estimated that the Finnish pellet productions might reach volumes of 1,000,000 tons by 2010 (Sikanen 2008).
In contrast to the anticipated fast growth on the supply side, domestic consumption is growing slowly in Finland. Total consumption was around 150,000 tons in 2008. This is roughly equally distributed to the residential heating sector and to medium scale heat applications such as community solutions. Large scale pellet combustion for power generation is not reported. Although further growth of domestic consumption (heat applications) can be foreseen, it will not meet the fast growing Finnish pellet production during the next years.
This means that Finland will remain / become a major pellet exporting country in the near future. Pellets are typically exported to Sweden, but also to Denmark and other pellet importing countries such as the UK and Belgium.
However, the development of the domestic demand will be one of the most important tasks for the Finnish pellet industry. Stable domestic demand has to be developed in order to reduce the risks of depending on pellet export which will gain importance due to increasing pellet production (and export) capacities in Eastern Europe (incl. Russia) and North America.
Please refer to the Publication section for a comprehensive report on the Finnish pellet market.