Inflation: the price of wood pellets skyrockets, “it’s the mustard pot or toilet paper effect”

Inflation: the price of wood pellets skyrockets, "it's the mustard pot or toilet paper effect"

The price of wood pellets or wood pellets has gone up considerably in recent months. The scarcity is felt and this winter is likely to be costly for many French. Will the phenomenon last?

No one knows how much the price of wood pellets (or pellets) will rise. In July 2021 a ton of pellets in a 15-kilo bag was around 280 euros, in August 2022 it exceeded 500 euros.

Today if you want to buy your bags of pellets, you have to place an order. The shortage is there and rare are the stores that escape the rule. The usual summer promotions are no more in August 2022. Far from it, prices go up almost every day and deliveries take several weeks.

In Lorraine and Alsace we have the resources thanks to the Vosges mountains. So how do we explain this situation?

We contacted two manufacturers in the Vosges mountains, on the Lorraine side and on the Alsace side. Both are clear that they do not want to speak in front of the media. The same goes for the supplier of wood pellets contacted.

Propellet, the national association of wood pellet heating professionals, evokes a tense energy market in France and Europe with sky-high prices for energy (electricity and gas) and raw materials (transport and packaging) due to the conflict in Ukraine.

To produce a ton of pellets, we currently have an additional cost of between 100 and 130 euros, linked to the general increase in the cost of manufacturing sawdust.explains Eric Vial, president of Propellet. Manufacturers from the Greater East region are probably in high demand from Germany, which is currently, together with Italy, the country with the highest prices on the European market.”

In France, the sale of pellet stoves and boilers advances, boosted by state aid. Between 2020 and 2021, the installation of pellet stoves increased by 41% and that of pellet boilers by 120%. The demand for pellet heating is growing rapidly.

“Communities that previously used pellets as auxiliary heating want to do without gas completely to switch to 100% pellets, which creates an even greater demand that the sector has had difficulties to cover”, adds Eric Vial, president of the national association of wood pellet heating professionals.

The market is also upset in Europe, where power plants running on pellets account for a consumption of 17 million tons. This is as much as for private pellet heating. The interruption of pellet deliveries by Russia, Belarus and Ukraine created a deficit of 3 million tons in Europe.

“The law of supply and demand creates, at an international level, speculation that increases prices. In France we are very competitive and almost self-sufficient”, Eric Vial continues. ” With strong demand, we import 16% of our pellet consumption, at higher prices. As a result, the market price is higher.”

As for the individuals, the professionals evoke an excess of stocks of pellets. “Is it the effect of the pot of mustard or the shortage of toilet paperadds Mr. Vial, people take stock and deprive others, then resell it on the internet.”

To meet the demand, professionals ask that the State be an actor, facilitating the development of pellet manufacturing units. The sector plans to produce an additional million tons between 2021 and 2024 and double production capacity by 2028.

New pellet mills will surely see the light of day. French energy giants (such as the Total group) would be interested in this sector. Given the general situation, the cost of pellets could continue to rise until reaching a price of 600 euros per ton of bagged pellets at the beginning of the school year.

Currently, heating with wood pellets is still the most economical way compared to electricity or gas. The question is: for how much longer?

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