Wood pellets in Russia
Russia is one of the most important countries when we talk about forest and its related potential of wood pellets production. The annual wood increment estimated to be 800 million cubic meters, but only 150millionis utilized (Rosleshoz 2017). Nowadays the output of trade products and harvested wood in Russia is about 74% (INFOBIO). The growth of potential domestic biofuels industry could be implemented by an existing resource base. The processing of even half of Russian wood residues will increase the production of pellets to 8 million tons per year.
The total production volume of pellet factory in Russia is about 3 million tons, but the real production is about 1.3 million tons of wood pellets. In general, by the end of 2018, it is expected to reach the level of 1.4 - 1.5 million tons of wood pellets (ROSTAT 2017).
Mostly, common resources of biomass, used by companies, are the residues of sawmill and woodworking industries. According to RBC.Research, the total number of pellet factories in Russia today are around 250. However, an exact number is difficult to obtain as many plants produce very small volumes, which are sold as animal bedding, cat litter or are aggregated by pellet brokers.
Russia’s wood pellet production industry is relatively young1, the country currently accounts for approximately 6 percent of world wood pellet exports and ranks eighth in the world for total wood pellet production, with 3 percent of total world wood pellet production (FAS). For the moment the internal market is at the stage of formation, more than 97% of products are exported.
Moreover, Siberia is an important country in wood pellet's market. This counrty is probably the biggest deposit of raw materials for the manufacturing of wood pellets in Russia. Indeed, pellets produced in Siberia represent the highest quality available in Russian pellet inventories. It stems from the fact that trees that are growing in extremely cold weather, the density of their fiber is extremely high. Their durability is about 99 percent and their net calorific value is often 18 and more. It is a very, very high quality wood pellet.
The Russian Customs Service reports that approximately 1.44 million metric tons of wood pellets were exported in 2017, 34 percent more compare to 2016. Wood pellet exports are expected to reach 1.5 million metric tonsinto2018. Leading export destinations for Russian wood pellets are Denmark, South Korea, Belgium and Sweden. Currently, Russia is the third largest exporter of wood pellets to the EU, after the United States and Canada.
Nowadays Russia consumes approximately 320,000 metric tons of wood pellets (INFOBIO). The main consumers of pellets are woodworking enterprises themselves, using pellets to generate energy for their own needs and to reduce residues disposal costs, as well as some owners of country houses. A small number of public services in forest regions also consume wood pellets.
1 : “The pellet industry started in the early 2000s when the first 6 plants were constructed in the Leningrad area (the region of Russia that surrounds the port of St. Petersburg)
The policy measures
The development of the domestic market is strongly dependent on the state regulation of the industry. The coordinator of the plan realization is the Ministry of Natural Resources and Environment of the Russian Federation.
Russian Federation has set Energy efficiency (2009) as a priority in its energy Strategy for the period up to 2030.
The programs and laws have being implemented in order to support the forestry sector development since 2009, such as:
- compensation of 80% for the costs of certificates, transportation and logistics costs (Federal Law #1388)
- subsidies for industrial companies and private consumers for to purchase biofuel boilers (Government Decree #97)
- sawmills and woodworking industries which claim the support, must be waste-free (Government program "The energy efficiency of electricenergy based on the use of renewable energy sources period up to 2020")
- budget allocations to regions for transferring existing boilers to biofuels-consuming boilers (Government program "The energy efficiency of electricenergy based on the use of renewable energy sources period up to 2020")
Moreover, some certifications exist. According to the National Bioenergy Association, Russian producers who export comply with the European Union’s relatively more stringent requirements for wood pellet imports. Seven large energy industrial groups of companies in Europe developed the rules and import standards, the so-called Sustainable Biomass Program.
Effect of this measure
Existing support programs are mostly stimulating export of wood pellets. Today, Russia’s governmental support towards energy development strongly depends on fossil fuels costs. Lack of logistics, insufficient level of transport and industrial infrastructure creates challenges to implement these programs into best practice. To give a proper boost to the domestic market growth, comprehensive policy, covering all weak points of the system shall be developed, as well as budget increase, could stimulate domestic utilization of wood pellets.
Moreover, there are about 36 thousand municipal boiler-houses workson liquid fuelin the country. At list 2/3 from them are locatedin regions where it would be possible to use a waste of the wood industry. If to switch them on biofuel it’s possible to save 85 million tons of oil.(Reiter 2007)
http://en.fas.gov.ru/ - Federal Antimonopoly Service of the Russian Federation
http://rosleshoz.gov.ru/ - Federal forestry agency
http://www.infobio.ru/en - Information and Analytical Agency «INFOBIO» the Bioenergy international Russia magazine
http://enbio.ru/en - Biomass Market Association «ENBIO»
https://lesprominform.ru/ - Lesprom inform journal
http://www.infobio.ru/sites/default/files/postanovlenie_pravitelstva_rf_o_subsidiyah.pdf - Federal Law #1388, 17.12.2016
http://www.infobio.ru/sites/default/files/Energostrategiya-2030.pdf - Energy Strategy of the Russian Federation until 2030
http://www.infobio.ru/sites/default/files/2446.pdf - Government program "The energy efficiency of electricenergy based on the use of renewable energy sources period up to 2020", 27.12.2010
http://biomassmagazine.com/articles/12762/waking-up-the-bear - Biomass magazine, 27.01.2016
https://lutpub.lut.fi/bitstream/handle/10024/45518/nbnfi-fe200905261549.pdf?sequence=3&isAllowed=y - MASTER’S THESISWOOD PELLETMARKETS IN RUSSIA, 12.05.2019
https://www.wood-pellet-mill.com/wood-pellet-news/Russia-wood-pellet-manufacturing-market.html - An analysis of wood pellets market in Russia, 04.07.2018
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Russia%20Wood%20Pellet%20Production%20Update_Moscow_Russian%20Federation_6-21-2018.pdf - Wood Pellet Production Update by Russian federation, 21.06.2018
https://www.researchgate.net/publication/269573423_THE_RUSSIAN_WOOD_PELLET_BUSINESS_EXPORTS_TO_THE_NORDIC_AREA - THE RUSSIAN WOOD PELLET BUSINESS: EXPORTS TO THE NORDIC AREA, 06.2014