Growing demand for waste wood increases the chase for alternative fuels

Source: press release, 29 September 2022

The search for waste wood and new alternative fuels is more intense than ever
The search for waste wood and new alternative fuels is more intense than ever (photo: Geminor)

Energy shortage and tougher competition across Europe are leading to record-high prices for waste wood. As winter is getting closer, the search for waste wood and new alternative fuels is more intense than ever.

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 this autumn.

In several regions, the price of the best qualities of waste wood is now close to EUR 100 per tonne. This creates challenges both within material recycling and energy recovery, which in practice is competing for the same waste wood, explains CEO of Geminor, Kjetil Vikingstad.

“Not only does waste wood become more expensive, but it also becomes more challenging to obtain. In Germany alone, we estimate that the supply will fall by around 2 million tonnes this year, and England and France also report deficits in waste wood. Unfortunately, we expect a further deterioration during the winter, as inflation and increased interest rates also affect access,” says Vikingstad.

Several factors influence
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 for the recycling of waste wood within the EU, Kjetil Vikingstad explains.

“In countries such as Norway and Denmark, public tenders demand a high share of material recycling, which has led to increased exports to the panel board 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,” says Vikingstad.

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 only 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% of this was based on biofuel such as bark and chips.

This year, many district heating plants need to consider other fuel alternatives, says Country Manager for Geminor in Sweden, Per Mernelius. “The market 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, this adaption demands adjusted emission permits, as well as the right quality fuel and logistics,” says Mernelius.

CEO Kjetil Vikingstad believes that the market sooner or later will balance itself through the opening of new markets and new fuel products.

“Being part of the energy recovery and recycling industries, we must do what we can to facilitate the best possible utilisation of existing volumes of wood. This includes the further development of our services within biomaterials, but also finding new waste fractions that can be good alternatives to waste wood,” concludes CEO of Geminor, Kjetil Vikingstad.