SHARE
COPY LINK
For members

COST OF LIVING

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

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?

Why has the cost of wood pellets in Italy risen so steeply this year?
Why has the cost of wood pellets in Italy risen so steeply this year? Photo by Ivo PANASYUK / AFP.

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.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

LIVING IN ITALY

Seven reasons to be positive about life in Italy in 2023

The cost of living crisis continues into 2023, but there are reasons to be optimistic about life in Italy in the coming 12 months.

Seven reasons to be positive about life in Italy in 2023

It may seem like people in Italy (and much of the world) have been hit with bad news almost non-stop for the past few years. From the coronavirus pandemic to the invasion of Ukraine sparking the energy crisis, there has been little respite.

It’s little wonder then that many people in Italy reported feeling overwhelmingly “gloomy”, “scared” or “melancholy” in 2022 according to a recently-published study by research institute Censis, which takes an annual snapshot of the national mood.

But, while we couldn’t leave the cost of living crisis behind us in 2022, the outlook for the next twelve months isn’t totally bleak.

Here are seven reasons to feel optimistic about life in Italy this year.

Tax bonuses

Each year, the Italian government provides a number of tax deductions to encourage residents to engage in economy-boosting, energy-saving or otherwise worthwhile projects.

And the 2023 budget bill has recently extended many of last year’s bonuses – including the popular building ‘superbonus’ – into the new year.

READ ALSO: From renovations to cinema tickets: The Italian tax ‘bonuses’ you could claim in 2023

There’s a lot of annoying paperwork involved in claiming these rebates, but getting all the necessary documents sorted might ultimately save you tens of thousands of euros.  

You can read more about the tax bonuses available in 2023 HERE and find our guide to the 2023 superbonus is HERE.

A better year for public holidays

National holidays in Italy are always taken on the day they fall on that year rather than being moved to the nearest Monday as is the case in some other countries. This means that if a certain holiday is on a Saturday or a Sunday, there’s no extra day off.

It also means that there are ‘good’ holiday years and ‘bad’ ones, and, while 2022 wasn’t a particularly good one – four public holidays fell on a weekend – 2023 only has one such holiday, making it a better year for long weekends and days off.

Six of 2023’s public holidays will fall either on a Monday or a Friday, creating five three-day weekends and a four-day one.

READ ALSO: Calendar: How to make the most of Italy’s public holidays in 2023

Italian beach with people sunbathing

Only one Italian public holiday will fall on a weekend day in 2023. Photo by Alberto PIZZOLI / AFP

The energy crisis has been contained

After months of negotiations, EU energy ministers finally agreed on a EU-wide gas price cap on December 19th.

The measure will come into effect on February 15th and will prevent gas price spikes Europe-wide from exceeding 180 euros per megawatt hour for more than three days in a row – as happened for over 40 days between August and September of last year.

Granted, the price cap won’t bring tariffs back to pre-crisis levels, but it should prevent prices in Italy as well as in other EU countries from reaching the eye-watering figures recorded last year.

READ ALSO: What will your Italian energy bills look like in 2023?

Italy also reached gas supply deals in 2022 with several countries which help reduce its previously heavy reliance on Russia. Other solutions, including expanding renewable energy infrastructure, are long-term projects which won’t show results for many years.

Energy prices overall are still high in Italy but, compared to the alarm many felt almost one year ago, the energy situation is definitely something to be optimistic about.

First four-day working week trial in the country

Italy will be taking its first steps toward the implementation of a four-day working week in 2023. 

The country’s biggest banking group Intesa Sanpaolo has announced it will offer staff the option of a four-day working week on the same salary, beginning at some point in January.

This will be the first four-day working model to ever be put into effect in Italy by a major company. 

As such, the measure has been described as a “revolution” that many hope will inspire more Italian businesses to offer four-day working options.

Italy-UK driving agreement  

For many British nationals living in or planning a move to Italy, the question of whether or not the UK and Italy would reach a post-Brexit deal on driving licences has been a major source of anxiety for almost three years.

So it was a relief to receive the news at the end of 2022 that the two countries had finally signed an agreement.

The deal means British residents can exchange their UK-issued licence for an Italian one without the need to retake their driving test, the British government said.

READ ALSO: Q&A: What to know about the Italy-UK driving licence agreement

More details will come once the agreement is ratified and comes into force at an as-yet-unknown future date, but for now British nationals will be able to continue driving in Italy on UK licences as the grace period originally set to expire on December 31st 2022 was extended to the end of 2023.

See everything we know about the deal so far here.

Vintage Italian car and a Vespa motorcycle

The UK and Italy reached a long-term agreement on driving licences in late December. Photo by Vincenzo PINTO / AFP

The return of major live music events

International music stars will make their return to Italian stages in 2023 following years of absence due to the pandemic.

After over two years of social restrictions and limits on public gatherings, there are plenty of major concerts to look forward to in the summer. 

Rome will welcome artists such as Bruce Springsteen (May 21st), Muse (July 18th) and Imagine Dragons (August 5th) while Milan will host performances from Red Hot Chili Peppers (July 2nd), Arctic Monkeys (July 15th) and The Weeknd (July 27th).

New air travel routes announced

People living in – or regularly visiting – Italy will benefit from a slew of new international air travel routes this year. 

ITA Airways has announced new weekly connections to San Francisco, Washington, Rio de Janeiro, Riyadh, New Delhi and the Maldives. 

EasyJet will roll out a number of new flights departing from their Milan Malpensa hub, including to Madeira, Lisbon, Rovaniemi (Finland) and Paris Beauvais. 

And Ryanair plans to introduce more flights to locations such as Dublin, Cork, Liverpool and Edinburgh.

SHOW COMMENTS