The Swedish wood pellet market is one of the worlds largest and especially in relation to the number of inhabitants the consumption of wood pellets is enormous. In 2008 the total consumption was around 1.85 million tons (PiR).
Strong drivers provide for wood pellets being used in all sizes of combustion plants from small boilers in single family houses (680,000 tons, PiR) and small heating centrals for multi-unit dwellings, public service buildings and industry over medium sized district heating plants up to large power plants producing power and heat for large district heating systems.
In 2008 around 120,000 households had pellet boilers. Another 20,000 had pellet stoves. In addition, around 4,000 medium sized boilers were in operation in Sweden.
Large scale consumption of pellets takes place in large district heating plants and CHP plants. These plants have gradually reduced their consumption of fossil fuels during the 1970-90’es due to energy taxes on fossil fuels. Many district heating plants switched from combustion of oil to coal, and after the introduction of the CO2 emission tax in 1991, they are now switching from coal to biofuels, such as pellets.
Currently around 94 companies/plants produce pellets in Sweden. The capacity is currently increasing as large market actors – energy companies and paper companies – are commissioning facilities each with capacities over 100,000 tons. In 2008, the total installed capacity was around 2.2 million tons and the actual production was around 1.4 million tons. Production is to a large extent based on residues from the numerous wood processing industries. Even though some producers are experiencing decreasing production due to changes in the feedstock availability the capacity is expected to increase in the years to come. As mentioned above the Swedish wood pellet manufacturing companies vary in size and comprise small, locally based pelletising plants as well as large dedicated pellet plants.
Apart from being a large manufacturing country, Sweden also is a large wood pellet importing country. For the last five years, Sweden has imported between 300,000 and 400,000 tons per year. The pellets are mainly imported from Canada, Poland, Finland and the Baltic Countries.
Some Swedish manufacturers also export pellets. Up to 150,000 tons per year have been exported during the last years – the majority being shipped to Denmark and to the United Kingdom.
Pellet prices in Sweden have remained constant at a high level for a long period and have not been sensitive to the changing crude oil prices during 2008. From the end of 2008 the pellet industry has seen increasing prices of around 13 percent (PiR).
With an annual wood pellet consumption of 1,850,000 tonnes and a population of 8 million, the per capita wood pellet consumption in 2008 exceeded 230 kg per person. Although this figure provides evidence for the mature character of the Swedish pellet market, there is still a high potential for the market to grow. The growth will take place in the residential sector and in medium sized industrial heating appliances, while in the utility sector wood pellets seems to be replaced by other solid biofuels.
The growth in the Swedish wood pellet market is expected to mainly be supplied via domestically produced pellets. The sector is furthermore expected to grow to export for the increasing pellet demand elsewhere in Europe.
Please refer to the Publication section for a comprehensive report on the Swedish pellet market.