Pellet Market in Sweden

Biomass pellets are becoming popular with more countries in the backdrop of soaring prices of fossil fuel and policy and subsidies support from governments around the world. Therefore the spring of development of pellet mill comes into being. We would like to elaborate on the development and wide application of biomass pellets to you so that you can gasp the overview of pelllet mill extensively serving the worldwide biomass energy advancement.



Sweden

1. Regulatory framework market drivers and barriers

In Sweden district heating is applied in most cities and towns. Wood pellets has been used as fuel sincethe 80's where many district heating plants and CHP plants were changed from oil to wood firing oftenin combination with coal. Today around 200 of these plants use biomass, many of them using woodpellets as fuel. In 1997 the annual consumption of wood pellets was 494.000 tons and only 39.000 tonsor 8% were used in private households. The remaining 455.000 tons were used for district heating andelectricity production. These figures changed dramatically over the following 13 years indeed the totalconsumption in 2010 was 2.280.000 tons and the use in private households was 785.000 tons or 34% ofthe total use. The construction scale of pellet plant has since then been extended remarkably.

Link to technological process of pellet plant

 

In 1991 a general CO2 tax on fossil fuels was introduced for thermal energy. Electricity generation andindustry plants were exepted. Today the legal frameworks conditions are based on an electricitycertificate system combined with renewable obligations and exemptions from CO2taxes. For privatehousehold the biomass price is attractive due to high oil prices, increasing electricity costs, and heavytaxation on fossil fuels. These are the main drivers for small‐scale users to invest in pellet boilers. Theresult is that the use of wood pellets in private households has increased 20 times over a 13 yearperiod.

 

2.Production capacity and feedstock

The production capacity has almost doubled since 2004, namely from 1.252.000 tons in 2004 (source:Pelletsatlas) to 2.400.000 tons in 2010 (source: BIOENERGI). There are 81 pellet plants in Sweden in2010 (source:BIOENERGI ) and 2 of them have a capacity over 100.000 tons annually. 40 plants have acapacity below 5.000 tons annually.

 

The production of wood pellets has increased rapidly since 1997 reaching 1.649.000 tons in 2010. Thereis both import and export. And pellet mill and pellet plant have been put into use across the country. There is no denying that the development of pellets production largely counts on the application of pellet mill and improved design of pellet plant.

Get to know pelllet mill and pellet plant projects across the world

 

The largest producers in Sweden use fresh saw dust as feedstock for pellet production; as well asshavings and dry saw dust. The majority of the small‐scale producers use only by‐products from otheractivities while the large‐ and medium‐scale producers use mainly purchased raw material. Rawmaterial shortage is a recurring problem and several producers have difficulties in sourcing theirfeedstock. The reasons for such difficulties lie in the high raw material prices and intense competition.

 

3. Consumption

Since 2000, consumption of wood pellets has increased significantly for all sectors reaching 1,473,000tons in 2005 and 2,280,000 tons in 2010. The sectors are private consumers, small and medium sizeheating plants and large scale CHP plants for both heat and electricity production.

 

4. Trade and logistic aspects

Since 2005 the average amount of wood pellets exported has been 100,000 tons annually mainly toDenmark and UK. The import of wood pellets has been around 365,000 tons annually on average. Earlyimports came from Canada and Poland, in more recent years from Russia, Finland and the Baltic Statesby ship to different harbours. In 2010 according to Eurostat, 695.000 tons of wood pellets wereimported by Sweden. Ship size varies from small Baltic coasters up to 4,000 tons to large bulk carriersfrom Canada up to 50,000 tons. Ice in the harbours in December‐April can cause troubles for minorships. If not used by a power plant in the harbour, the wood pellets are transported by truck or train tothe end user or to an intermediate storage for distribution. Railways are used for domestic transport ofpellets. The delivery to private consumers take place in bags (16 kg), big bags (about 700 kg) and truckwith blower equipment.

5. Pellets quality and standard

The Swedish Pellet Standard ‐ SS 18 71 20 ‐ was established in 1999. Nowadays the European standardEN‐14061‐1 is applied. The standard classifies the fuel into threegroups. Group 1 is designed to fit the high quality needs of the small boilers for private consumers. Group 2 and 3 are designed to fit the needs of large‐scale users that do not need thehighest quality. Three fourths of the pellets produced in Sweden meet the Swedish standard. Mainlysmall manufacturers do not follow official standards.

6. Price trends

Price on wood pellets has been quite stable in the last years in Sweden. The price for truck delivery toprivate consumers in sacks is 333 Euro/tons excl. VAT, which in Sweden is 25%. For bulk delivery theprice is lower due to purchase of large amounts and due to the often lower quality (Group 2 and 3) forlarge scale end user. There are no price statistics from the utility companies (power plants).As we can tell from the above, progress in pellet production and application lift up the level of demands for pellet mill and even pellet plant. Because the latter is closely related to the former. Along with the perfection of pellet production regulations and the pellet industrial running, the industrial sector of pellet mill manufacturing and pellet plant designing will get on track accordingly.

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