Posted by: davidgarnerconsulting | October 6, 2009

Forestry Investment – Demand Up – Prices Up

Forestry Investment – Despite the current recession, demand for timber pellets is on the rise along with investment in pellet plants, as an increasing number of countries see the importance of developing sustainable, profitable biomass and bio-fuel industries.

Wood Resource Quarterly has reported that Sweden currently consumes 20 per cent of the world’s wood pellets and that demand is growing in line with greater interest in biofuels as a viable alternative to fossil fuels. Prices for wood pellets are also higher in Sweden than in much of the rest of Europe.

Wood Resource Quarterly also says the price of wood pellets has generally seen an upturn over the past seven years.

Much of the demand for pellets has come from energy firms that have traditionally dealt in fossil fuels and are now looking to develop biofuels. Europe is a major market, largely in light of the EU target to use at least 20 per cent renewable energy by 2020.

There are 450 pellet-producing plants in Europe, with many new plants planned for the coming few years in countries like the UK, Sweden, Germany and Denmark. These countries are expected see their consumption of forestry products increase the most over the coming decade.

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