Pellet Market Analyses across Austria

1. Regulatory framework market drives and hurdles

Wood pellets across the whole country of Austria as heating fuel have been introduced to domestic market around the mid 1990s which since then saw the usage of wood pellet primarily for residential heating hitting a rapid growth. As we can tell that the success can be based upon the conventional use of wood for space-heating and the related familiarity with this fuel as well as on several promotion programmes that are in place. One of the most important initiatives goes to Klima:aktiv which was launched in 2004,a programme promoting the utilization of renewable energy sources. In total, it ran until 2012 and was funded by  the Lebensministerium.  Within  this  initiative one programme  is  of  importance  for  the pellet  market development  called  “Holzwärme”.  The  programme  ran  from  2005  to  2009,  which  gave  incentives for house owners to install biomass heating systems and increasingly pellet heating systems. Currently,  financial  support  for  installing  a  wood  pellet  system  can  be  received  within  the general housing  subsidy.  The  requirements  for  the  funding  and  the  respective  amount  can  differ  within  the country, since it is the responsibility of the federal states. Thus, the subsidy can range between 1,400 and  7,000  Euros  depending  on  the  type of  pellet  heating  system. 

 

2. Production capacity and feedstock 

In the first half of 2010, 28 production plants were located in Austria with a production capacity of 1,2 million tons and respective production of 850,000 tons in 2010. In comparison, in 2006, the production capacity  was  only  half  the  amount  what  underlines  the  huge  growth  of  the  Austrian  wood  pellet market.  

 

3. Consumption 

In regard to the pellet consumption a steady growth with a slight drop in 2006/2007 can be observed. The wood pellet demand especially for residential heating was about 630,000 tons in 2010. In general, Austria  has  a  higher  production  output  than  actually  demanded.  Currently,  the  production  volume  is 35% above national demands. The number of set-up pellet heating systems rose from 425 in 1997 to a peak of more than 11,000 of yearly installations in 2008, which was mainly due to the promotion programme “Holzwärme”. In 2009 the number of new installations was almost 8,450 pieces, totalling to 70,800 pieces. 

 

4. Trade and logistic aspects 

Austria  produces  mainly  wood  pellets  for  residential  heating  that  are  exported.  The  trade  of  wood pellets  mostly  takes  place  in  bordering  regions.  Italy  (226,000  t)  and  Germany  (46,000  t)  are  the  two main  receiving  countries.  The  imports  come  from  Germany  (80,000  t),  Czech  Republic  (27,000  t)  and Romania (22,000 t). In total the export amounted to 284,000 t and the import to 160,000 t (data 2009). Thus, Austria was a net exporting country for pellets.  

 

5. Pellets quality and standard 

In  spring  2011,  a  new  standardisation  for  wood  pellets  called  EN  14961-2  were  introduced  to  the Austrian  market.  This  new  standard  was  going  to  replace  the then existing one  ÖNORM.  EN  14961-2  is  a Europe-wide standard, which assures high quality pellet production and supports the harmonisation of pellet  production  within  the  different  European  countries.  The corresponding  certification  system  is called  ENplus,  which  is  primarily  based  on  the  specifications  of  the  EN  14961-2  standard.  Within  this system three wood pellet qualities with different application   purposes   and   thus   wood   pellet characteristics are certified.   These qualities are called ENplus-A1, ENplus-A2 and EN-B. The certification  system  has  evolved  from  a  collaboration  of  the  institute  proPellets  Austria  and  German Pellets Association (DEPV). The table below shows the quality parameters for ENplus-A1, ENplus-A2 and EN-B, respectively. 

 

6. Price trends 

In Austria the wood pellet prices had been fairly steady with price levels of 155 to 185€/t till 2005. In 2006 prices started to rise with a peak price over 265€/t in November as it could be noticed on several central European wood pellet markets. In the following years such a peak did not recur and prices have been  rather  stable  even  though  at  a  higher  level.  In  general,  seasonally  variations  with  higher  prices during  the  heating  period  and  lower  prices  in  summer  could  be  observed.  During  2010  the  prices  for wood pellets for heating purposes in the private sector ranged between 197 and 217€/t. The average wood pellet prices per ton from 2003 to 2010 were 180,170, 163, 217, 199, 181, 205 and 206 separately. As of the end of 2013,  the unit price of pellet fuel per ton across the region has hit 220. The momentum of increase is ongoing and the market development of pellet fuel is in full swing now.