German pellet market hurt by low oil prices, trade body reports

Germany's energy wood and pellet sector had a difficult year in 2015 as falling oil and gas prices impacted on investment, according to a report by the Germany Energy Wood and Pellet Association (DEPV).

In its annual report entitled Pellet market 2015 and Forecast 2016, the industry association said the "massive drop" in oil prices has "hampered" the pellet trade with only around 16,000 boilers and furnaces put into service. These are mainly residential or small-scale industrial systems.

The DEPV had predicted around 40,000 systems would be built, but instead the market further slipped after 38,500 systems were added in 2014.

The warmer weather also contributed, with pellet production scaled down to 2m tonnes last year, compared to 2.1m tonnes produced in 2014.

However, only around 1.4m tonnes were used in 2015, prompting the cut in production.

Despite production decline, Germany is still a leading net exporter of pellets, coming behind the US and Canada. According to the DEPV, 99% of pellets produced in Germany are certified with EN plus marks.

DEPV chairman, Andreas Ligner, said: "The very good conditions for pellet production and the high technical standard of the domestic boiler and furnace manufacturers offer a good basis for the development of pellet furnaces in Germany."

Elsewhere, Ligner said that policies were moving in the right direction with subsidies for sector increased in January this year. For this year, the DEPV nonetheless expects 38,000 pellet units to be sold in Germany, bringing the total up to nearly 430,000 systems in the country.