The United Kingdom is forecast to consume 10.35 million tonnes of wood pellets in 2026, representing a 4% increase from 2025 and a record consumption level, according to a report filed with the US Department of Agriculture's Foreign Agricultural Service. The consumption increase will require an estimated 10.15 million tonnes of imports.
The forecast reflects strong demand from the industrial biomass power sector, which is operating at near-maximum capacity as major operators maximise output ahead of structural changes to subsidy mechanisms. Industrial bioenergy accounts for approximately 93% of UK wood pellet demand, with Drax and Lynemouth power stations consuming a combined estimated 9.63 million tonnes annually.
Capacity utilisation across the UK's industrial biomass sector is projected at 94.4% of total 10.2 million tonne capacity — the highest utilisation rate in recent years. This reflects dual incentive structures: operators are maximising Renewable Obligation Certificate (ROC) generation before the subsidy regime transitions to new Contracts for Difference (CfD) frameworks scheduled for March 2027, whilst biomass simultaneously serves as reliable baseload electricity generation during periods of low wind and solar output.
The 4% year-on-year consumption growth from 9.95 million tonnes in 2025 represents continued reliance on biomass within the UK's electricity generation mix. Residential and commercial heating sectors account for the remaining 7% of wood pellet demand, a significantly smaller market segment than industrial power generation.
The forecast consumption level of 10.35 million tonnes creates an import dependency challenge: the UK's domestic wood pellet production capacity cannot meet demand, requiring 10.15 million tonnes of imports to supply the market. This import reliance exposes the sector to international feedstock availability and transportation cost volatility.
The CfD transition in March 2027 represents a structural inflection point for UK biomass economics. Current ROC-driven incentives have created the financial conditions for maximum capacity utilisation ahead of the policy shift. Post-transition, the competitiveness of biomass within the CfD auction framework will determine whether utilisation rates sustain at current elevated levels or moderate as the subsidy architecture changes.
The data indicates biomass remains a strategically important component of UK electricity generation capacity, particularly for periods when renewable intermittency constrains solar and wind output.
UK wood pellet consumption reaches record 10.35 million tonnes
