Europe is leading rapid growth in the wood biomass energy sector with demand for wood pellets seen growing at 8 to 10 per cent annually in coming years, according to Wood Resources Quarterly.

Wood pellets are made mainly from wood waste – bark, sawdust and wood chips – from forestry operations. Compressing wood waste into pellets creates a more efficient-burning fuel than wood chips. Wood biomass fuel is seen as a valuable source of renewable energy and, if produced sustainably, offers a climate-friendly alternative to fossil fuels.

The wood biomass industry in Europe is seeing the benefits of the EU’s target to produce 20 per cent of power needs from renewable energy by 2020. It’s being led by increasing demand for pellets and investment in pellet production in Sweden, Germany, Denmark and Britain, the WRQ reports.

Sweden alone used almost two million tonnes in 2008, 20 per cent of world demand, producing almost 1.6 million tons at home and importing the balance from Canada and elsewhere in Europe. The number of pellet-producing plants in Europe has reached 450 and is expected to increase significantly over the next few years.

The industry is also benefiting from investment inspired by government green stimulus measures. The pellet market is growing in the United States where a federal tax credit of up to $1500 is currently offered on the purchase and installation of high-efficiency stoves and heaters, including wood or pellet-burning units.