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Industrial wood pellets are trading at an all-time high.




EcoCrops International reports that Industrial wood pellets, as opposed to domestic wood pellets, are currently trading at an all-time high.  With the Argus 90 day Industrial wood pellet index trading at US$210 per tonne, up strongly from July 2018 where they were trading at US$175.

The steep increase in prices is primarily driven by higher demand from European Power Stations.  Such as new power station coming online in the Netherland, Belgium, and Italy.  And existing Power stations such as the huge UK Drax power station burning more wood pellets and burning less coal.
This trend is set to increase due to a number of factors:

The EU climate change targets for reducing its greenhouse emissions, transforming the EU carbon-based fuel (coal) police towards a low carbon economy by 2050.  With targets for the reductions of greenhouse emissions is set for 2020 and 2030.

Germany’s plant to phase out all coal power stations by 2038.  And the increased efficiency of carbon capture at existing wood pellet power stations such as Drax.

The market for Premium Quality domestic wood pellets is significantly higher with them trading at 269 Euros a ton.  The primary reason for the difference is that as that they are of a much higher quality than Industrial wood pellets.

James Grainger Head of Operations at Ecocrops International
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