Sanctions Send Wood Pellet Prices Soaring

The UK has stopped importing wood pellets from Russia, leading to sharp price increases amid greater competition for supplies. Bioenergy News reports that the impact of the sanctions is being felt worldwide. Russia was a major global exporter of biomass products, and the UK and other countries are now facing a rush to find alternatives.

The UK Pellet Council and the Forest Stewardship Council (FSC) have stopped accepting Russian and Belarus sourced wood products for use as biofuel, in response to the widely condemned attack on Ukraine. The U.K. Association for Renewable Energy and Clean Technology has announced its support for the move.

Biomass Magazine reports that all trading certificates and controlled wood sourcing have been suspended for Russia and Belarus. However, the FSC has decided to maintain routine contact with forest management certificate holders in Russia, in order to protect the quality of Russian forests.

UK Pellet Council chair, Mark Lebus, also announced a suspension on sourcing and importing wood pellets from Russia, which he acknowledged would lead to rising prices as the pressure on worldwide demand grows.

Mr Lebus commented: “Given the previous levels of Russian exports, this will, of course, have an impact on supply worldwide, not just to the UK but for other countries too who are all now competing for the same premium product from similar suppliers.”

He added: “With UK and international sanctions in place, we estimate that total European production may be reduced by some 12-15%, so there may be some short-term price rises due to the ongoing situation and heightened competitiveness between countries.”

“UK customers may have experienced the price per tonne rising by approximately 25-40% (cost average £360-385 [€428-458]), although most accept that this is still much lower than consumers using oil or gas-fuelled systems. Current wood pellet costs are also in line with prices across Europe.”

Mr Lebus also called on the UK government to invest more and expand the home-grown UK wood pellet market. He pointed out that this would help to cushion the UK from outside turbulence in the markets, and also create thousands of new jobs in the low-carbon sector, and attract inward investment.

The Telegraph reports that prices have already increased to as much as £385 per tonne, a rise of between 25pc and 40pc. Although wood pellet fuelled heating systems are still a niche market in the UK, the government has in recent years encouraged thousands of homes and businesses to switch to biofuel sources.

The government’s boiler replacement scheme offers a grant of £5,000 towards a new biomass boiler, as part of its efforts to invest in clean renewable energy for the future. The biomass sector is calling for new areas of sustainable woodland to be created in the UK, as part of a long-term policy to increase the domestic wood supply.

Demand for biomass is set to grow, as the challenges of climate change mean that the reliance on fossil fuels is gradually phased out. The need for a long-term strategy to create more sustainable UK forests looks more pressing than ever before.

 

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