From 10 July, Russian exports of wood pellets to Europe, the main market for Russian companies, will be completely stopped. From this date, EU sanctions will come into force, limiting the supply of wood products from Russia and Belarus.
According to Lesprom Analytics, in 2021, the EU accounted for 80% of Russian wood pellet exports. In addition, supplies amounted to 1.95 million tonnes and the value amounted to $320 million.
Russia also supplies small volumes of pellets to South Korea (7% of total exports), the UK (6%) and Japan (4.5%). Only in the first quarter of 2022, the volume of wood pellet exports from Russia to the EU increased by 14%. This is equivalent to 478 thousand tonnes and the value amounted to USD 85 million.
However, difficulties in the supply of wood pellets from Russia to Europe began on 8 April 2022, when the Russian and Belarusian FSC and SBP trade certificates were withdrawn. A week later, ENplus certificates used in the consumer market became invalid.
After that, European companies started to refuse to buy Russian wood pellets. It will be in mid-July when Russian sawmills in northwest Russia, the main producers and suppliers of wood pellets for Europe, will be completely out of the sales market.
“So, with the closure of European markets, they will have nowhere to go. You can’t send pellets to China; the price simply won’t allow it” says Valery Pisarev, general director of LHK Cherepovetsles. According to him, the inability to sell pellets on export markets may mean that sawmills will not be able to recycle woodworking waste and will be forced to reduce wood production.
In the absence of their implementation, the company is forced to stop production or pay a fine. It is also impossible to bury sawdust, it is a fire hazardous product. Therefore, sawmills will be forced to stop or look for alternative ways of using sawdust.
Source: Lesprom (2022)