Wood Pellet in the Baltic countries
Description of the product or technology
Wood pellet is the good renewable and eco-friendly bioenergy resources. Estonia, Latvia and Lithuania are the Baltic countries. In Baltic region produced two types of pellet such as industrial and premium pellets. They produced 6 or 8 mm diameter and the basic difference between industrial and premium pellets in ash content (1.2% vs 0.5%) and heating value (4,8 MWh/ton vs 4,9 MWh/ton). For premium pellet they used barkfree softwood sawdust and chips as a raw materials and sawdust of soft wood and hard wood and along with firewood, energy wood and wood chips containing bark raw materials used for industrial pellet. Their main product quality parameters are the ash content, heating value, humidity and specific gravity. In Baltic state, they no special wood pellet standard but from January 2010 they introduced ENplus (for private pellets) and EN‐B (for industrial pellets) by new European standard. For pellet production in Baltic region used newly developed special sensors to automatically determine the volume of bulk wood load material technology. It is newly developed technology in pellet industries. They are committed to produce nature-friendly and high-quality products to the preservation of the environment (LETEK 2009) .
There are two main source of feedstock of wood pellet production in Baltic Region, which are residues from sawmill industry and low quality round-wood. Species utilized mainly pine and spruce, but also aspen, alder, and birch in smaller extent. It is estimated that in 2016, the wood increment of the forest (supply) is 23 % higher than the felling (demand), equal to 140 million cubic meters (Fletcher 2016).
Description of the market
Approximately all European countries produced wood but Baltic countries is the biggest pellet producer and exporter in EU. They are produced more than 3 million tons for export.
Figure: Wood pellet production in 2010-2016 for the Baltics countries (AEBIOM 2017)
In Baltic region Latvia is first biggest wood pellet producer and Estonia is the second wood pellet producer. The total amount of wood pellet production in 2014 was 2.65 million tons at Baltic state. Lithuania have one pellet plant. AS Graanul Invest is one of the biggest group of wood pellet Producer Company in Baltic state. They have four production plant in Baltic region 2 unit in Estonia, 1 unit in Latvia and 1 unit in Lithuania. Their production capacity is production capacity is 2.2 million tons per year. Major portion of the produced wood pellet are exported by Baltic countries to the neighboring countries and rest of the world. Baltic state wood prices are different from other because their product quality, raw material availability and cost (Anonymous 2018) .
Figure: Wood pellet price in Baltic States (source: Thran et al. 2017)
Description of policy measures
Every Baltic countries have different policy. Estonian Government take several steps for sustainable energy management. These policies are 20 % of the electricity produced in CHP (cogeneration) for 2020, 5.1 % of energy by 2010 from RES, 25 % of energy produced from renewable sources for 2020, Improving transport sector to use more biofuels. Estonian Government develop “Long-Term Development Plan for the Fuel and Energy Sector”. On the other hand Latvia take some policies for bioenergy such as National Energy Program, Law on Energy, National Program for Production and Use of Bio-fuel in Latvia, Law on Biofuel. Another country Lithuania develop their bioenergy market framework based on the National Energy Strategy (RES 12% in consumption for 2010), Law on Biofuel, Biofuels for Transport and Bio-oils, Law on Excise Taxes, Law on Pollution Taxes, Law on Electricity, Law on Heat (source: Thran et al. 2017).
Figure: Energy consumption from renewable energy sources in 2005 and target 2020 (source: Thran et al. 2017).
Evaluation of the effect of the measures
Baltic state bioenergy market is the unique market place. They have some key factor for pellet production and marketing. For example relatively low cost of production, available raw material because they have available wood resources and cheap labor and energy costs to provide the price competitive environment, and big ports for pellet transport in Sillamae (Estonia), Klaipeda (Lithiania), Liepaya, Vetspils (Latvia), and Paldiski (Estonia). Baltic region wood pellet market is one of the wood pellet market place in Europe. In my point of view, last year their overall pellet production was decrease and their domestic pellet consumption and market is very poor than international market. Need to take several steps to develop their domestic market consumption by national governments policies (source:AEBIOM 2017).
[AEBIOM] European Biomass Association. 2017. [online document]. European Bioenergy Outlook. Available at: https://epc.bioenergyeurope.org/wp-content/uploads/2017/10/FINAL-PELLET-MARKET-OVERVIEW-2017.pdf [Cited on 31 Jan 2019]
Anonymous. 2018. [online document]. Estonian Timber. Available at: https://estoniantimber.ee/best-practices/graanul-invest-europes-biggest-pellet-producer/ [Cited on 31 Jan 2019]
Fletcher K. 2016. [online document]. Baltic Boom. Available at: http://biomassmagazine.com/articles/12763/baltic-boom [Cited on 31 Jan 2019]
LETEK. 2009. Pellet market country report Baltic countries ESTONIA / LATVIA / LITHUANIA [Online document]. Available at: https://piirb1q7sc948r4632ws3mf9-wpengine.netdna-ssl.com/wp-content/uploads/2015/09/Baltic-Countries_CR.pdf [Cited on 31 Jan 2019]
Thran et al. 2017. [online document]. Global Wood Pellet Industry and Trade Study. Available at: http://task40.ieabioenergy.com/wp-content/uploads/2013/09/IEA-Wood-Pellet-Study_final-2017-06.pdf [Cited on 31 Jan 2019]