Skip to end of metadata
Go to start of metadata

Wood pellets in Finland, especially in Norhern Ostrobothnia region

original author Teija Kanniainen, editor Taneli Pantsar

1.The product

Wood pellets are cylidrical shaped pieces (width under 25 mm), which consist of raw materials like by-products of wood industry, for instance cutter chips or sawdust (Larsson et al 2004). Pellets net calorific value (CV) is 4,8 kWh/kg ( The advantages of pellets are their low moisture content, high calorific value and compact size, that makes them also easy to export overseas. Heating by pellets is good for the environment because of low CO2 emissions. Heating by pellets also increases independence of fossil fuels (Selkimäki et al. 2010). Because of pellets' high energy density the transportation and storage costs are relatively low (Mola-Yudego et al. 2014).

2.The market of pellets

In Finland the total production of pellets was 250 000 tons in 2012 ( It is less than in 2007 when total production of pellets was 329 000 tons. In 2007 the total production capacity of pellets was 750 000 tons and the estimate for the year 2020 is double: 1,5 million tons of pellets. This means that new pellet plants should be established or increase the capacity of existing plants. In 2007 there were 24 pellet producers in Finland. In 2016 there’s 27 producers.

Many pellet plants are located near the raw material supply (for instance saw mill or wood industry) because this way the raw material transportation costs can be kept low. Pellets are transported to the large-scale customers (which are often near the coast) by cargo ships or large trucks and to medium- and small-scale customers by pneumatic trucks. The regions with highest capacity of pellet production are Päijänne Tavastia, Pirkanmaa and North Carelia (Selkimäki et al. 2010). In Northern Ostrobothnia, because of climate and vegetation conditions, the annual growth of wood and level of pellet production capacity is not as high as it is in some southern regions in Finland ( 

The total consumption of pellets in Finland in 2012 was slightly under 200 000 tons ( In 2007 consumption was 117 000 tons. In 2007 Finland was export oriented pellet producer, but nowadays the amounts of pellet production and domestic consumption are nearer to each other. That means the amount of pellet export is smaller than before. In 2012 the export of pellets was about 60 000 tons, while in 2007 it was 180 000 tons (, Selkimäki et al. 2010). In Finland small-scale users (pellet boilers under 25 kW, for instance private houses and cottages) used 61 000 tons of pellets in 2007. In the same year medium-scale users (pellet boiler sized 25 kW - 2 MW, for instance public buildings, commercial and industrial premises like schools and health centers etc.) and large-scale users (which means plants like district heating plants and CHP plants, which have the biggest boiler size, more than 2 MW) used 56 000 tons of pellets (Selkimäki et al. 2010).

The price of pellet energy was 0,06 €/kWh in 2014 ( The price has increased over the years but it's still competitive compared to price of oil or electricity.

3.The policy measures around the pellet business

In Finland there's a palette of choices to forest owners to get subsidized from state. Forest owners can get subsidies to intermediate cuttings in their forests, building a forest road (together with other land-owners) etc. This is helping the wood industry to get the raw material to their activities. On the other hand, Finnish forest owner must pay taxes to the state for selling wood (

Finnish pellet producer can get subsidies, loans or financial warranty as access to finance from the European Union to develop innovations in their business ( State doesn´t support pellet production but allocates investment subsidies for pellet production plant establishments ( The research around pellet industry is important. It is possible to get subsidies also to the research projects.

Nowadays households in Finland are able to get subsidies for upgrading their heating systems ( This could have an effect of growth in small-scale users of pellets.


4.Evaluation of the effects of policy measures


Although the production of pellets has decreased in recent years in Finland, the domestic use of pellets has grown ( The low economic situation is having effect to the pellet markets (Hänninen and Sevola (ed.) 2012). Economic situation has an effect to wood industry and saw mills, so the lack of raw materials is causing problems nowadays in pellet production (Mola-Yudego et al. 2014). The use of pellets has many positive effects: cheap prices, low carbon emissions and the possibility to use local raw materials. Nowadays the pellet stoves have developed better and the brand of pellets is good as a non-messy energy source (Selkimäki et al. 2010). The subsidies for upgrading the heating systems are increasing the popularity of pellet energy in Finland ( The subsidies for innovations will increase the popularity of using pellets (

Compared to Sweden Finland’s pellet market is far behind than what it could be. Already in 2012 the total pellet production in Sweden was almost 800 000 tons (Röser, D. & Selkimäki, M. 2008). There’s a huge difference compared to Finland’s 250 000 tons. Pellet production keeps rising in Sweden and aimed total production in 2015 was 1 743 430 tons (Pellets i Sverige 2015). The main reason for Sweden’s well established pellet market is that Sweden has been favouring bioenergy in their energy policy.

What kind of future will be in Northern Ostrobothnia? Because of great density of peat lands there, the thinnings in forests are challenging. Building of forest roads is important to get raw material from forests.

The climate change might have positive and negative effects to Northern Ostrobothnia. If winters get warmer than before, it's difficult to make intermediate fellings in forests in peatland areas. On the other hand, there will be more annual growth in forests and more raw material to pellet industry in the long run in Northern Ostrobothnia (Ruosteenoja et al. 2010). It is possible that the production of pellets and the popularity of pellet energy rises in Northern Ostrobothnia.



Hänninen, R. and Sevola, Y. (ed.) 2012. Metsäsektorin suhdannekatsaus 2012 - 2013. Metsäntutkimuslaitos, Sastamala.

Larsson, S. (ed.). 2004. Harvennuspuu pellettiraaka-aineena - jalostus, polttaminen ja markkinat. BKT-rapportti 2004:9. Sveriges Lantbruksuniversitet Enheten för Biomassateknologi och Kemi. Umeå.

Mola-Yudego, B., Selkimäki, M. and Gonzáles-Olabarria, J. R. (2014). Spatial analysis of the wood pellet production for energy in Europe.  Renewable Energy, 63, 76-83.

Ruosteenoja, K., Räisänen, J. and Pirinen, P., 2010. Projected changes in thermal seasons and the growing season in Finland. International Journal of Climatology.

Selkimäki, M., Mola-Yudego, B., Röser, D., Prinz, R. and Sikanen, L. (2010). Present and future trends in pellet markets, raw materials, and supply logistics in Sweden and Finland. Renewable and Sustainable Energy Reviews, 14(9), 3068-3075.

Röser, D. & Selkimäki, M. 2008. PELLETime: Pellet Markets in Sweden, Metla’s report



Pellets i Sverige 2015 (Pellets in Sweden 2015) -pdf,