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Russian wood pellet exports reached a record high in the first half of this year, bolstered by an increase in shipments to South Korea, the UK, Belgium and Denmark, which helped to offset a decline in Swedish demand.

Shipments rose by 14.4pc on the year to 977,000t in January-June, putting them 46.3pc above the four-year average for the period of 668,000t (see chart). Wood pellet exports increased by 10pc on the year in the second quarter, and by 22.4pc in June.

European industrial demand ramped up in the first half of the year — specifically in the Netherlands, Belgium and the UK. Russian wood pellet supply increased to both the UK and Belgium, but exports to the Netherlands declined as the country sought North American volumes to cover the demand growth.

Russian shipments to Belgium nearly doubled on the year to 107,000t. Engie, Belgium’s largest wood pellet consumer, operates two power plants — the 205MW Rodenhuize 4 (Max Green) facility and the 80MW Les Awirs. And Russia deliveries to the UK grew by 59.6pc on the year to 91,000t.

Denmark retained its position as the largest recipient of Russian wood pellet supply in the first half of the year, as deliveries rose by 7.7pc to 390,000t from 362,000t.

The Danish voluntary energy agreement states that utilities must ensure that 90pc of their wood pellet supply is Sustainable Biomass Program (SBP) compliant in 2020. Around 96pc of Danish utility Orsted’s biomass purchases last year were certified as sustainable by a third party — the Forest Stewardship Council, the SBP or the Programme for the Endorsement of Forest Certification.

Russian wood pellet producers have consequently ramped up their efforts to obtain SBP certification. There were 42 operational SBP-certified biomass production facilities in the country at the end of June, up from 26 at the start of 2020.

South Korea became the third-largest recipient of Russian pellets in the first half of the year, receiving 102,000t, up from 28,000t a year earlier. Russia can compete with Canada to supply South Korea, given the similarities in wood pellet quality.

The growth in exports to Belgium, the UK, Denmark and South Korea helped offset the decline in demand from Sweden and the Netherlands. Russian exports to Sweden sank to 51,000t in January-June, from 114,000t in the same period in 2019. Forest fires in summer 2018 restricted Swedish raw material supply, resulting in a spike in pellet import demand in 2019. Low heating demand in the first quarter of this year also weighed on exports to Sweden.

Russian wood pellet exports to the Netherlands slipped by 22pc on the year to 46,000t in January-June.

Pellet throughput at the Russian port of St Petersburg climbed again in the first half of this year, with exporters able to significantly increase shiploads as a result of recent infrastructure upgrades and the streamlining of intra-port logistics, the St Petersburg port authority said.

The post Russia: Exports of wood pellets hit record high in H1/2020 appeared first on Timber Industry News.