Growing demand for waste wood increases the search for alternative fuels

The steadily declining business activity in Europe, in combination with trade boycotts of Russia and Belarus, has led to a sharp drop in volumes of waste wood. And as supply falls, prices strengthen throughout Europe.

However, the economic benefit for waste wood producers is still limited, since transport costs have increased considerably in the last year.

Industry players within material recycling and energy recovery are competing for the same waste wood, which makes it more challenging to obtain. In Germany alone, the supply will fall by an estimated two million tonnes this year, and England and France also report deficits in waste wood. Hence, we expect a further deterioration during the winter, as inflation and increased interest rates also affect the access to wood.

The market for waste wood is complex for several reasons. Not only is waste wood attractive in both material recycling and energy recovery, but there are also various regulations when it comes to recycling of waste wood within the EU.

In countries such as Norway and Denmark, public tenders demand a high share of material recycling, which has led to increased exports to the panelboard industry. Waste wood is an attractive raw material for recycling because it normally makes up a large proportion of the municipalities' total waste volumes, and thus makes it easier to meet targets and requirements for material recycling.

The fact that waste wood is exempt from CO2 taxation in countries such as Sweden also increases the interest for wood as fuel in district heating plants.

Alternative fuels: the new option

Few, if any, countries are hit as hard by the lack of waste wood as Sweden. The Swedes have regulations that facilitate the efficient use of waste wood and various types of biofuel in energy production, and many incineration plants have boilers designed only to receive waste wood and biofuel.

In 2021 alone, a whopping 21 TWh of energy for district heating production was based on wood and biofuel. Close to 46 per cent of this was based on biofuel such as bark and chips.

This year, however, many district heating plants need to consider other fuel alternatives. The current demand is opening up new streams, and previously unused biomaterial from forestry is becoming more attractive to the energy recovery industry.

At the same time, several plants are able to use both impregnated wood and treated residual waste such as SRF in the fuel mix. However, the adaptation to new fractions demands adjusted emission permits, new logistics routines, and the right treatment of secondary fuels.

The market will sooner or later balance itself through the opening of new markets and new fuel products. But to reach this balance the industry must do what is necessary to facilitate the best possible utilisation of existing volumes of wood. Geminor will continue the development of our services within biomaterials, as well as focusing on finding new waste fractions that can be good alternatives to waste wood in the UK and Europe.