Wood Pellet price increases

Wood Pellet price increases

06 June 2022

Why is the UK wood pellet price rising?

The wood pellet price in the UK has risen from around £300/t to over £400/t in just six months.

One of the knock-on effects of the Ukraine crisis is that wood pellets are no longer imported from Russia, Belarus and Ukraine. This has led to a shortfall, pushing up the wood pellet price in the UK.

In 2021, 3.3 million tonnes of wood pellets were imported into the EU and UK from these countries, but in early 2022, Sustainability and Quality Certification (ENplus and FSC®) was removed from wood pellets from Russia, Belarus and Ukraine which meant they could no longer be exported. And so from 15th April they were no longer RHI compliant.

The sudden withdrawal of these volumes had a huge impact on established supply chains and caused global shortages overnight.

The wider market is now trying to find alternative supplies.

Hugh Montgomery, managing director of Land Energy said “The EU and UK is missing around 25% of its normal volume of pellets, so there has been significant price rises heightened by competitiveness between countries.”

Price per tonne has risen by around 25-40%. UK wood pellet price average is now in line with prices across Europe.

While the UK biomass heat industry primarily services rural and off-grid, domestic and commercial users, it operates in a global industry.

Here at Woodlets, we produce 100% of our volumes from our plant in south west Scotland and we source all of our wood from within 60 miles of our factory. We carry the globally recognised badges of quality and sustainability in ENplus and FSC® ensuring compliance with BSL. We are also active members of the Dumfries and Galloway Biosphere – a mark of our commitment to the local community and our area.

In short:

  • Prices in the energy market are continuing to rise and this is likely to continue.
  • Woodlets’ production and distribution costs are increasing, but we will continue to supply.
  • We are investing in new vehicles and equipment to keep stocks moving efficiently during busy periods.
  • Land Energy has the lowest CO2 of any producer or supplier in the UK.
  • We have increased our pellet storage capacity to create a buffer stock should the winter turn significantly cold.

UK Pellet Council chair, Mark Lebus, said ‘The government department of Business Energy & Industrial Strategy (BEIS) must realise that there is an opportunity in the UK to support and strengthen a home-grown wood pellet production market which see the UK becoming mostly self-sufficient for biomass wood fuel, and, therefore, less reliant on imports and energy price hikes.’

‘By growing domestic production in-line with sustainable forestry management and DEFRA’s tree planting and new woodland creation ambitions, the UK could take ‘huge strides’ in achieving its net-zero goals.’

‘Currently, the UK cannot provide the required volumes and, therefore, we import on a considerable scale and have become drawn into a growing energy crisis.’

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