Economic and Sustainability Comparative Study of Wood Pellets Production in Portugal, Germany and Sweden

Abstract

Abstract. During the last decade wood pellets consumption grew rapidly. In this paper the development of the wood pellet production factors for markets in Germany, Sweden and Portugal are compared. Domestic market prices for pellet production factors as well as domestic market prices for pellets variation are analysed. The analysis are based on two model plants, representing the first common technologies for small scale production based on dry sawdust sources, and the second represents large scale production based on wet materials. The results show how differences in costs of raw materials, energy and labour affects wood pellets production. The economic sustainability for European pellet producers depends on their domestic markets as internationally traded pellets are priced lower than their production costs, being Portugal an exception due to lower labour and raw materials costs. Future pellet production will be based on wet raw materials such as logs and wet sawdust. These raw materials are also demanded by pulp and paper or fiberboard industries. The transition from smaller wood pellets plants using dry raw materials to larger plants using wet raw materials, can be expected to follow comparative advantages regarding raw materials, energy costs and economies of scale.

Wood pellets as a sustainable energy alternative in Portugal

“…About 10% of the market is for pellet stoves in private households and for industrial boilers, mainly operating in the textile industry, while 90% is exported in bulk for northern European countries like Belgium, Sweden or Denmark [30].…”

Co-firing coal with wood pellets for U.S. electricity generation: A real options analysis

“…However, there appears to be a tradeoff, with co-firing wood pellets possibly resulting in GDP and employment declines (Steininger and Voraberger, 2003). European wood pellet production costs are higher than import prices (except Portugal), leading to importation of energy as opposed to domestic development, which may explain this possible negative economic effect (Nunes et al, 2014). Currently, logistics are a major barrier to international trade of wood pellets , but as the industry matures this barrier may evaporate.…”

Life cycle assessment of co-firing coal and wood pellets in the Southeastern United States

“…Even if significant government incentives were enacted in support of renewable energy generation, securing a sufficient, and consistent, local supply of biomass may be a formidable challenge, given the existing export of U.S wood pellets to Europe. As long as European wood pellet production costs remain higher than import prices, the importation of energy (i.e., wood pellets) is predicted to continue in lieu of domestic European development (Nunes et al, 2014).…”