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Pellets in Finland

Author Tuomas Mauno; Revised by Vijay Bhatt 

Description of the product or technology

Wood pellets have become important fuel in heat and power production because pellets for example have high energy content and most importantly wood pellets contribute to the reduction of CO2 emissions (Sikanen et al., 2008). Wood pellet is usually made of a by-products of forest industry like sawdust or forest chips. The raw forest biomass material must be dried before pelletising. Wood pellets are made by pelletisation process where the raw material is compressed. The pellets can be of different shape and size depending upon its target customer. In Finland, pellets of cylindrical shape, diameter of 8 mm and the length 10-30 mm are popular (Alakangas & Paju, 2002).

Wood pellet’s moisture content and ash content are low. The moisture content is 7-12% and the ash content is about 0,5%. The weight of a bulk density of pellets is about 650-700 kg/m³ and the energy content of pellets is 3000-3300 kWh/m³ (Alakangas., 2000, Alakangas & Paju, 2002). It is important to note that because of high bulk density, one tonne of pellets takes about 1.5m³ of storage space and that makes pellets a good choice for heating for family houses, this means that the wood pellets can compete with oil and electricity heating systems. Making wood pellets an eco-friendly option for heating systems. On a larger scale pellet combustion is also a good option for district heating plants and small power plants (Alakangas, 2000, Alakangas & Paju, 2002).


Description of the market

Finland aims to increase its share in renewable energy production and tap its underutilized forest biomass (Judl et al., 2014). Finnish wood pellet production is important factor for European wood pellet market (Proskurina et al., 2016). The increasing demand for wood pellets has expand the pellet supply in Finland (Selkimäki et al. 2010). The pellet use in combined heat and power (CHP) plants will increase in future and feasibility study shows encouraging results (Judl et al., 2014; Lehtilä, Savolainen, & Syri, 2005). The pellet production is a fast growing industry even though there are few power plants using pellets in Finland (Energiauutiset., 2016). 

However, partly state-owned company, Vapo Oy, is the biggest producer of wood pellets in Finland. And according to Proskurina et al. (2016) the local demand of wood pellets was increasing every year in the 2010s. In 2018 heat and power plants used 288 000 tons of wood pellets. In total power plants, households and agriculture used 373 000 tonnes of wood pellets in 2018. (Energiauutiset., 2016).

Even if Finland is important producer of wood pellets and the Finland wood pellet market is export oriented, import is also important for Finland. For example, 87 000 tons of pellets made mainly in Russia were shipped to Finland (Energiauutiset., 2016). Figure 1 clarifies the development of wood pellet production, domestic consumption and exports and imports in Finland.

Figure 1. Wood pellet production, domestic consumption, and wood pellet import and export in Finland in 2001–2013, in 1,000 tons (Proskurina et al., 2016).


Description of the policy measures

The Finnish National Forest Programme aims to increase the use of indigenous wood resources for energy purposes. The programme has also presented recommendations and policy support advice how to accomplish the aim (Finland's National Forest Strategy 2025. (2015)).

The Finnish bioenergy is supported by the government policy. For example, possible subsidies can be different grants, such as investment grants. Government policy has been also supporting bioenergy through energy and environmental taxes (Proskurina et al., 2016).

The Finnish National Renewable Energy Action Plan (NREAP) is supporting policy which encourages towards renewable energy targets. (National Renewable Energy Action Plan (NREAP). 2010). According to National Renewable Energy Action Plan, small scale CHP plants that use wood fuel can receive support for example. Also, investments where the pellets are used in renovated buildings can get subsidies with investment grants (National Renewable Energy Action Plan (NREAP). 2010).



The local demand of wood pellets was increasing in the 2010s in Finland (Proskurina et al., 2016). Production of pellets has also increased but there are still only few power plants using pellets in Finland (Energiauutiset. 2016). Despite of that, future can be considered positive. For example, Finland has advanced technology, the positive target of increasing biomass consumption and availability of forest resources (Proskurina et al., 2016). That will improve the position of pellets in Finland. The pellets also solves the spatial problem concerned with biomass-based bioenergy system that is high transportation cost of feedstock. Transportation has been one of the limiting factors in bioenergy production from wood sources (Mola-Yudego, Selkimäki, & González-Olabarria, 2014). The economic viability of pellets in transportation because of the high energy content makes it a preferred choice for co-combustion power plants especially in cities. Judl et al. (2014) modeled the pellet use in co-combustion of CHP production in Helsinki and found it to reduce the net impact on environment and it does not contribute to the air pollution (Judl et al., 2014). In small scale, the government and policy makers would increase the support towards the wood pellets, households could change their heating systems from oil to pellets reducing carbon footprint. Whether on a small scale perspective or large scale perspective, the policy has a strong influence on the use of pellets.



Alakangas, E. 2000. Characteristics of fuels used in Finland. Jyväskylä: VTT Energy. 172 p. + 17. (VTT Research Notes 2045).

Alakangas, E. & Paju, P. 2002. Wood pellets in Finland - technology, economy and market. OPET Report 5. Jyväskylä: VTT Processes. 

Judl, J., Koskela, S., Korpela, T., Karvosenoja, N., Häyrinen, A., & Rantsi, J. (2014). Net environmental impacts of low-share wood pellet co-combustion in an existing coal-fired CHP (combined heat and power) production in Helsinki, Finland. Energy, 77, 844-851. doi:10.1016/

Lehtilä, A., Savolainen, I., & Syri, S. (2005). The role of technology development in greenhouse gas emissions reduction: the case of Finland. Energy, 30(14), 2738-2758. 

Mola-Yudego, B., Selkimäki, M., & González-Olabarria, J. R. (2014). Spatial analysis of the wood pellet production for energy in Europe. Renewable Energy63, 76-83.

Proskurina, S., Alakangas, E., Heinimö, J., Mikkilä, M., & Vakkilainen, E. (2017). A survey analysis of the wood pellet industry in Finland: Future perspectives. Energy118, 692-704.

Selkimäki, M., Prinz, R., Mola-Yudego, B., & Prinz, R. (2010). Pellet market, raw materials, handling and logistics in Northern Periphery. PELLETime. Saatavilla www-muodossa: http://www. metla. fi/julkaisut/workingpapers/2010/mwp157. pdf. Viitattu29, 2012.

Sikanen L., Mutanen A., Röser D. & Selkimäki M. 2008. Pellet markets in Finland and Europe-An overview.

Energiauutiset. 2018.  Available at: [24.1.2019]

Finland's National Forest Strategy 2025 (2015). Available at [24.1.2019]

National Renewable Energy Action Plan (NREAP). 2010. International Energy Agency. Available at: [24.1.2019]





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