Production and market Trends: An EU perspective

Christian Rakos described the European pellet market as being in its infancy, with a limited number of countries participating in three types of business: power, heat, and mixed goods. The market is characterized by dynamic growth, for example, in Italy, France, and Germany.

In 2006, Europe experienced a “supply crunch”; prices increased by over 60%, and pellet producers were accused of taking advantage of high oil prices. As a result, Rakos said, stove and furnace sales declined. A warm winter further reduced demand, and new production plants arose, causing a glut and rapidly declining prices.

“A sharp increase in pellet use is expected in commercial and residential sectors,” said Rakos, given that “people are upset with oil prices.” Wood pellets currently have a price advantage over oil of 65%.

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