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6 Jan/Feb 2023 FDM AsiA |

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Wood Pellet Markets 2023 Higher wood costs become a challenge

Outlook High infation is creating challenges in every sector. For pellet
manufactures, there are obvious concerns about labour costs,

CAnADIAn BIOMASS shares a look at the challenges and consumables costs, and power costs. However, the largest
opportunities ahead for wood pellet markets in 2023. cost to producing wood pellets is the cost of the delivered
The wood pellet sector is facing two critical challenges this woody feedstock.
year: the impact of infation on the pellet fuel supply chain, Pellet factories, as FutureMetrics has stated in a number
and the impacts of the Russian invasion of Ukraine on global of presentations, are ‘bottom feeders’. They depend on the
supply and demand. residuals from sawmills and from managed working forest
As the frequency and severity of the consequences of harvests. Pellet plants cannot pay sawlog pricing for feedstock.
climate change increase, the goal of decarbonising the energy Thus, the demand by primary users of forest products, i.e.,
sector will drive policymaking. Pragmatic and rational policy sawmills, impacts the supply of the sawmill and forest by-

will recognise the value of sustainably sourced renewable solid products. (On average, about 60 percent of a sawlog becomes
fuel for heat and power as a necessary support mechanism lumber or other fnished products. The rest is sawdust, edge
for the off-ramp to a decarbonised future. slabs, and bark.)
FutureMetrics strongly believes that the benefts derived Part of the current pellet feedstock challenges in north
from replacing some fossil fuels with renewing carbon benefcial America derive from the U.S. federal government’s response
pellet fuel will support continued robust demand at least for to high infation. Higher interest rates make the cost of home
the next few decades. ownership higher. The monthly mortgage cost for a typical
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