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Reader question: Why are wood pellets now so expensive in Italy?

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Reader question: Why are wood pellets now so expensive in Italy?
Why has the cost of wood pellets in Italy risen so steeply this year? Photo by Ivo PANASYUK / AFP.

Wood pellets are no longer an affordable way of heating your home in Italy, say readers who note a dramatic price rise recently. Why has this happened and will the costs go down again?


Question: 'This week I saw pellets that last year were on offer at €4.80, now on offer at €13.50! I can understand the cost of transport has increased, as has electricity and gas, but I can’t see how that can justify a more than a doubling of a 15kg bag of pellets.

Have the production costs gone up so substantially, or is it just because other energy costs have gone up that there is yet another opportunity to rip people off?'

Readers living in Italy have written in to voice their concerns about rising energy costs - including those using wood pellets, which are no longer such an affordabe option after recent price spikes.

The fallout from Russia's invasion of Ukraine is the main reason why the price of pellets has risen so steeply this year - though increased production and transport costs are just part of the equation.


Italy's demand for both wood pellets and wood in general far exceeds its domestic production levels, so the country is heavily reliant on imports.

Sanctions on timber from Russia and Belarus and reduced supplies from Ukraine have "directly caused" the Italian timber market to shrink by ten percent, Annalisa Paniz, director of the Italian Association of Agroforestry Energies (Aiel), told newspaper Libertà.

The reduction in the supply of raw material from these countries, the processing of which creates the byproducts (i.e., wood chippings and sawdust) used to make wood pellets, has also put the brakes on domestic pellet production.

READ ALSO: What are Italy's rules on using wood-burning stoves?

Countries that previously imported large amounts of Russian timber, such as the UK and Baltic states, have significantly reduced their exports to meet domestic needs, so the price of both pellets and firewood from those countries has risen significantly.

Overall, the interrupted supply of wood from Russia, Belarus and Ukraine has created an estimated shortage of 3 million tons of wood pellets in Europe.

Meanwhile, out-of-control gas prices mean these shortages have coincided with increased demand from customers looking for alternative energy sources - not just private households, says Paniz, but also industrial plants, that can easily outbuy individual consumers.

Then there's the issue of increased production costs as a result of the high price of gas.

According to Paolo Sandri, president of the forestry companies section of the Trentino Tradesmen's Association, energy expenses account for about 40 percent of the cost of pellet production, as the wood chippings and sawdust need to be heated and dried before they can be processed. These increased production costs are passed on to the end consumer.

All that's on top of the fact that Europeans' interest in pellet stoves has been increasing anyway in the past few years, with the EU seeing an average increase of 10 percent in the number of wood pellet stoves and boilers used each year.

They're particularly popular in Italy and France, which are expected to account for 50 percent of all sales of wood pellet heaters in Europe by 2029; so there was an increasing demand for wood pellets even before the war.

These factors have all conspired to create a "perfect storm" that has driven up the price of pellets to between two and three times the normal cost, says Imerio Pellizzari, vice president of the Trentino Tradesmen's Association's forestry section.


This doesn't mean there hasn't also been a little bit of self-interested price-gouging from businesses looking to cash in on the situation, Sandri acknowledges, noting that "there is a bit of speculation, because whoever has pellets raises the price."

To bring down the cost of pellets in the future, both Sandri and Pellizzari say Italy should focus on increasing domestic production to meet the country's growing demand.

"In Trentino, sawmills produce one million cubic meters of timber, but all the waste that could be processed in Trentino is exported," says Sandri.


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