Wood pellets are small dimension, compressed wood particles and fibres. Typically they are produced by grinding roundwood, chips or residues into very fine particles and then forcing the mix through a die to make a semi-solid cylinder that is lower moisture content, higher energy density and more costs effective to transport than wood chips or other raw materials.
The use of wood pellets increased significantly around 2013 due to long-term subsidy schemes for biomass energy use. Pellets were well suited for use in existing coal-fired power stations but less attractive to new build biomass energy plants, as they are typically more expensive than alternative biomass raw materials and new build boilers can be designed to utilise a wider range of fuel sources. Pellets are a good fit for the fuel handling and processing systems already in place in coal-fired energy plants.
The European market, particularly the UK, dominated consumption and import of industrial wood pellets for many years. More recently, demand in Japan and Korea has been increasing.
Higher quality wood pellets are also used for residential heating, these are typically bagged for international transport and domestic consumption.
The UK is still the dominant importer of wood pellets globally, with an average of 28% of the market. This is almost entirely supplied from the USA, Canada and the Baltics. Japan and Korea dominate the Asian market.
The USA is the largest exporter of wood pellets globally with an average of 24.8% of the market. Vietnam has significantly increased production in recent years and has overtaken Canada as the second largest exporter, supplying Japan and Korea.
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