Experts clarify – contest: why have pellets become so expensive?

Get out of fossil fuels and into renewables – that’s the message that has been heard a hundred times. If this has successfully reached an owner of an older residential building who finally wants to get out of the oil, he doesn’t have many alternatives. Since experience shows that older buildings are not well insulated and especially high temperature radiators heat the rooms, an air source heat pump is not the last word. There is almost only one option left, namely heating with wood pellets. But they have become expensive, very expensive (see chart). Why actually? Why has the price of pressed wood noodles more than doubled in one year, while wind and bark beetles cause massive amounts of damaged wood?

Who better to explain this to us than Christian Rakos, director of “Pro Pellets”, the network promoting the diffusion of pellet heating systems, and Micheal Pfeifer, head of the Tyrolean “big player” Pfeifer Group? The “crown” hit both Kapazunder at the headquarters in Imst.

“Even pellets are subject to market laws”
“The entire energy sector has been completely shut down this year,” notes Christian Rakos in general, “wood pellets are also subject to the laws of the market, which is determined by supply and demand.” Austria and also in the EU doubled. On the other hand, supplies of pellets, that is, the pressed waste products such as sawdust, chips and wood chips from the wood processing industry, from Russia, Belarus and Ukraine are completely absent. That is certainly ten percent, which is especially lacking in the Italian and French markets.

This puts extra pressure on trade throughout Europe. Rakos: “Consumers also buy in panic. So the demand is much greater than the supply.” In Austria, the wooden table would be well set: 41 companies produce 1.6 million tons of pellets, while in this country only 1.2 million tons are consumed. “Pfeifer is not isolated, we are part of the international market,” adds Pfeifer, whose Pfeifer Group is one of the pioneers in the production of wooden dumplings. “And if Pfeifer were to sell the pellets cheaper, it would create a blatant imbalance against the competition,” the Pro Pellets boss counters.

But the law of the market should also apply to the price of logs. And if there is a lot of storm and bark beetle damage lying around in the forest, there must be an oversupply and the price must fall. “Then there is less fresh whipping”, says Pfeifer, “and often the quantities are too small to have an effect.”

Production costs have doubled
However, the market is only responsible for half of the price increase. “For us, the production costs of pellets have approximately doubled”, the Imst entrepreneur justifies the price increase, “the price for the required wood residues has even increased by 400 percent.”

Has the ceiling been reached? Christian Rakos thinks there will be some easing: “Eleven new pellet plants are currently being built in Austria and I think the price will come down. But not to the previous level.” It is hoped that citizens’ motivation to switch to renewable energy sources will not diminish.