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2020 Analysis Of The Canada Wood Pellet Market

Date: 07/08/2020 08:33:33 From: Clicks:

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Wood pellets are a type of biomass fuel often produced from forestry waste such as wood shavings, bark, and sawdust. In addition to creating value from a waste product, wood pellets can be renewable, are easy to transport, and are more efficient to combust than wood.In 2015, biomass energy use in all sectors (residential, commercial, industrial, transportation and agriculture) accounted for 6.1% of Canada’s total energy use. The majority of bioenergy sources were wood pellets, firewood, wood waste and pulping liquor. While biomass contributes mainly to heat energy, it also contributes to electricity generation.

Biomass is the second-largest source of renewable electricity after hydro. In 2016, it accounted for 3.1% of electricity generation from renewable resources (such as hydro, wind, solar and biomass) and 2.0% of all electricity generation in Canada. Canada’s installed biomass electricity generation capacity was 2,702 megawatts in 2016, growing 49.8% from 2005 to 2016.

Biomass share of Canada's total energy use, 2015

Biomass share of Canada's total energy use, 2015
Biomass share of Canada's total energy use, 2015

Biomass share of Canada's total electricity generation, 2016

Canada is the second-largest exporter of wood pellets in the world, Canada produces wood pellets which can be used as a fuel source for electricity generation and heating. Most Canadian wood pellets are exported to other countries. The primary destinations for Canadian wood pellets are the United Kingdom (U.K.), Japan, and the U.S. In 2016, these countries accounted for about 70%, 11%, and 7% of Canada’s exports, respectively. The remaining 12% was exported to 11 other countries. And $396.7 million in wood pellets exports representing 11.9% of total global exports in 2017. Increasing wood pellet exports to the U.K. were partially explained by the U.K.’s planned initiative to phase-out coal generation by 2025. Biomass generation can displace coal generation, particularly because wood pellets can be burned in converted coal boilers. Higher wood pellet exports to the U.S. were partially a response to growing biomass electricity generation in the United States.

The Canadian wood pellet industry is export-oriented with high production capacity and exports far exceeding domestic demand. Overseas demand growth for Canadian wood pellets in recent years was largely fueled by the United Kingdom and Japan as these countries seek to increase their use of renewable energy in heat and power plants.Total Canadian wood pellet production in 2017 was 2.9 million tonnes, a year-to-year increase of 1.6% from 2016 and an increase of 32.4% from 2012. British Columbia was the top producer in Canada with 2.1 million tonnes, representing 72.2% of the national total.

Global ranking for wood pellet exports by value, 2017

Rank Country Percentage of world value (%)
1 United States 26.0
2 Canada 11.9
3 Latvia 8.2
4 Estonia 7.0
5 Austria 6.0
All otders* - 40.9

* All others includes 39 countries.

British Columbia represents the largest share of Canadian exports, with 78.0% of total exports by value at $311.3 million. The top three markets for wood pellets from British Columbia are the United Kingdom, Japan and Belgium.

Top export markets and share of total value of exports by province – wood pellets, 2017

Province Share of total value of exports (%) Top export markets Export market value
(ranked by top markets by province) (C$)
British Columbia 78.0 United Kingdom 230,749,284
Japan 42,669,792
Belgium 20,715,512
Quebec 13.0 United States 38,823,547
United Kingdom 9,926,449
Italy 4,167,274
New Brunswick 6.1 United Kingdom 22,489,735
United States 1,744,006
Alberta 1.4 United States 5,512,684
Nova Scotia 0.5 United Kingdom 1,920,000
Belgium 119,608
Ontario 0.1 United States 525,552


Wood pellet consumption in Canada shows linear growth averaging 13 percent average annual increases since 2013. Consumption for 2018 is estimated at 315,000 MT in 2018 rising to 380,000 MT in 2019.

The is potential for a large future expansion in domestic demand depends on the success of Canada’s goal to phase out coal-fired power plants by 2030 and the cost of alternative renewable energies.


Pellet production in Canada has also achieved linear growth averaging 12-percent average annual increases from 2013 thru 2018 and post forecasts an increase in 2019. Increases in nameplate capacity were also steady over the same period, but have not kept up with demand growth as capacity use rate has risen from 57 percent to an estimated 67 percent in 2018 and further increase to 71 percent in 2019.

Pellet production in Canada
Pellet production in Canada

Canada has a current capacity at 4.66 MMT, however some projects are underway and this will likely increase by 2020.

Since 2015, Aurora Wood Pellets proposes to build a 200,000-ton capacity wood pellet production facility in Hay River on the south end of Great Slave Lake in the Northwest Territories. Construction on the project is currently being held up while necessary approvals are received from the Hamlet of Enterprise, the local administrative authority.

Another pellet plant is being proposed by Northern Energy Solutions Ltd in Mirimichi, New Brunswick.

The proposal would expand the already existing Miramichi Wood Pellet Production line and increase total production to 275,000 MT. The operation is proposing to export to Europe in 2021.


Global industrial wood pellet demand is projected to continue growing at 2.7 MMT per year through to 2025. Canada has significant forest resources and potential to capture some of this growing demand.

Value of wood pellet exports from Canada in 2018, by major country

Value of wood pellet exports from Canada in 2018, by major country

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