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© Annalisa Paniz, AIEL
Annalisa Paniz
Development of the Italian pellet marketVancouver. November 19, 2014
© Annalisa Paniz, AIEL
• Who is AIEL?
• What is the Pellet market situation?
• What is the heating market in Italy?
• Is the ENplus certification supported by the
Italian companies?
• What are the current Pellet support schemes?
Contents
© Annalisa Paniz, AIEL
WHO IS AIEL?The main Italian association of Wood Energy Chain
© Annalisa Paniz, AIEL
Plantdesigners
AIEL: Structure and organisation
Wood Energy Chain Association (300 members)
Representing the companies’ interests ‘from Forestry to chimney’
© Annalisa Paniz, AIEL
• 150 companies (Plants Designers, Installers, Farms, Mechanic industries, banks, ESCo, etc)
• 100 companies involved into the Working Groups: Biomass Producers, Pellets Producers and Traders, Small scale heating appliances' producers, Biomass Boilers producers, mini CHP producers, Biogas plants producers, etc)
• 50 public and private bodies (Research Institutes, Universities, Municipalities, Provinces (Landers), Energy agencies, Embassies, Foundations, etc)
Who are our 300 members?
© Annalisa Paniz, AIEL
THE ITALIAN PELLET MARKET FROM A GLOBAL POINT OF VIEW
The biggest European Market for domestic use
© Annalisa Paniz, AIEL
Development of global pellet production
© Annalisa Paniz, AIEL
Pellets market = global market
Source: EPC ‐ IEA Bioenergy Task 40
© Annalisa Paniz, AIEL
Development of the European pellet consumption
In 2013 for the first time in Europe the consumption for heating purposes has overtaken the consumption for the electricity power generation.
10 Million tons of pellets were consumed for heating purposes and 9 Million tons for power generation.
Rakos, ARGUS Conference
© Annalisa Paniz, AIEL
European market = heating maket
• 10 Million ton (2013)• + 16,6% from 2012• 4 times bigger in 10 years
• 6 countries with 90% market share
• Italy 2,5 Mt (3,2 Mt)• Germany 1,9 Mt• Sweden 1,4 Mt• Austria 0,9 Mt• France 0,75 Mt• Denmark 0,6 Mt
Source: Seth Walker
© Annalisa Paniz, AIEL
Global pellet market. Forecast
The global demand of wood pellets is expected to growfrom the current 23 million to 50 million tons in 2024
The market growth is driven by the residential usemainly in the European markets
Japan and Korea are entering into the global market.This may have a significant impact on the internationalflows
RISI, Seth Walker
© Annalisa Paniz, AIEL
3.110.630 t
4.731.183 t
2.092.698 t
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
5
2012 2013 2014*
Milion
i t
CANADA
USA
Export from North America into Europe
Source: Eurostat. Elab. Paniz AIEL
+52% from 2012 to 2013Italy: just 2‐5% of the total export from
USA10% (2013) and 19% (2014) of the total
export from Canada
*till June 2014
© Annalisa Paniz, AIEL
Export form USA and Canada• 2013 Export 5.2 Mt
• USA: 2.7 Mt• Canada: 2.5 Mt
• Destinations• Europe: 98% of the total exports
• Italy just 7%• Other destination countries are Korea and Japan
• Korea 100 000 t (2013) representing 9% of the export from Canada (2014)
UNITED KINGDOM
64%
NETHERLANDS16%
BELGIUM9%
ITALY7%
DENMARK0%
SWEDEN3%
GERMANY 1%
ALTRI0%
Fonte: Eurostat. Elab. Paniz AIEL
98% of the total export goes into Europe
© Annalisa Paniz, AIEL
608.591 t
0
1
2
3
4
5
6
7
Milion
i t
2012 2013 2014 *till June 2014EUROSTAT data
Export form USA and Canada
© Annalisa Paniz, AIEL
THE ITALIAN PELLET MARKET FIGURES
The biggest European Market for domestic use
© Annalisa Paniz, AIEL
Italy: the biggest European pellet market
Italy: the biggest European pellet market
TOTAL CONSUMPTION 20133,2 MILLIONS TON
TOTAL CONSUMPTION 20133,2 MILLIONS TON
The domestic consumption
represents 96%
The domestic consumption
represents 96%
How big is the Italian consumption?
© Annalisa Paniz, AIEL
How many plants are installed?
Stoves and inserts: 1,9 Million
(21% second house)≅15,2 GW
Stoves and inserts: 1,9 Million
(21% second house)≅15,2 GW
Boilers ≅200.000 (up to 35 kW)≅5 GW
Boilers ≅200.000 (up to 35 kW)≅5 GW
Big plants: At least 20(> 1MW)
Big plants: At least 20(> 1MW)
Boilers ≅2.500 (35 kW – 1 MW)≅1‐2 GW
Boilers ≅2.500 (35 kW – 1 MW)≅1‐2 GW
© Annalisa Paniz, AIEL
Annual growth200‐300.000 tonsAnnual growth200‐300.000 tons
Over 3,5 Milliontons in 2015
Over 3,5 Milliontons in 2015
25%
© Annalisa Paniz, AIEL
• Around 15% of the total biomass domestic installations (around 10,6 millions of heating systems) are fed with pellets
• Bagged pellet represents slightly less the total consumption. A significant high number of boilers are still fed with bagged pellets
• Bulk pellet transported with silo trucks is no more than 20.000 t
• The expected increase of this market sector is higher than the average growth of pellet market thanks to the increase of pellet boilers trade
•The market is fragmented: it is possible to buy pellets in every single shop, from mini market to Great dealers, from hardware store to hobby centres.
•According to the heating market growth expectations and the National Renewable Energy Action Plan statement, the use of pellets will reach 3,5 Mt in 2015 and 5 Mt in 2020
Some Market Considerations
© Annalisa Paniz, AIELSource: AIEL – GAD 2012. Results of over 170 companies
Pellet stoves: leader of the Italian market
Picture source: Palazzetti
© Annalisa Paniz, AIEL
Source: Palazzetti SpA
© Annalisa Paniz, AIEL
Pellet stoves: leader of the market
2013: strong increase in sales from big retailers
Installations
Selling of Pellet stoves
Installatio
ns
Selling of Pellet stoves
250‐270 000
© Annalisa Paniz, AIEL
1.9433.294
5.639
8.195
11.980
14.344
401
431
547
688
973
1044
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
<35 <35 <35 <35 <35 <35
2009 2010 2011 2012 2013 PREV. 2014
VENDITE CALDAIE A PELLET (focus <35kW)
IMPIANTO COMPATTO DEPOSITO A CARICO PNEUMATICO
Residential pellet boilers <35 kW: an important market
2009‐2014 Trend (∆) +556%Pneumatic feeding system +160%
No pneumatic Pneumatic feeding system
2014: forecast overestimated
© Annalisa Paniz, AIEL
372
13
433
26
494
30
382
27
443
46
522
61
49
14
77
14
105
11
151
22
210
18
255
28
0
100
200
300
400
500
600
700
800
36‐100 101‐500 36‐100 101‐500 36‐100 101‐500 36‐100 101‐500 36‐100 101‐500 36‐100 101‐500
2009 2010 2011 2012 2013 PREV. 2014
VENDITE CALDAIE A PELLET (focus >35kW)
DEPOSITO A CARICO PNEUMATICO IMPIANTO COMPATTO
Pellet boilers from 35 to 500 kW
No pneumaticPneumatic feeding system
© Annalisa Paniz, AIEL
From 2009 to 2014 over 80.000 biomass boilers were sold
Pellet boilers
66% (53.300) are pellet boilers
9% of pellet boilers are with pneumatic feeding system
Pellet is the market leader for boilers up to 100 kW
2014: over 21.000 biomass boilers will be sold. 76% are pellet boilers
© Annalisa Paniz, AIEL
Data source: REF‐E . Elab. AIEL (2014)
What kind of boilers were substituted with biomass boilers in 2012?
© Annalisa Paniz, AIEL
Stock of Single Heating systems installed in 2011Data source: Istat, elab REF‐E 2013
560.000 heating oil boilers13.900.000 natural gas boilers1.562.000 LPG boilers
© Annalisa Paniz, AIEL
ITALY: AN IMPORT ORIENTED COUNTRY
© Annalisa Paniz, AIEL
kt
Production and consumption: an opposite trend
Elab. AIEL su dati GAD, GCMB; GPDPENplus
Production Eurostat
2012 750.000 t
Production Eurostat
2012 750.000 t
IMPO
RT
© Annalisa Paniz, AIEL
70%
85%
51%53%
68%
52%
39%
31%
26%
14%9%
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Consum
o (t)
% produ
zione
nazionale
Production and consumption: an opposite trend
© Annalisa Paniz, AIEL
Lombardia45%
Veneto18%
Friuli Venzia Giulia16%
Trentino Alto Adige8%
Emilia Romagna3%
Toscana2%
Lazio2%
Basilicata2%
Valle d'Aosta2%
Altre2%
Where are the main production sites?
Production: 300 ‐ 350.000 t Certified production: 150‐200.000 t
Forecast 2014
© Annalisa Paniz, AIEL
ITALY. THE BIGGEST IMPORTER FORRESIDENTIAL USE
© Annalisa Paniz, AIEL
Import from 2012 to 2014
Source: Eurostat. Elab. Paniz AIEL
0
50.000
100.000
150.000
200.000
250.000Jan. 201
2
Feb. 201
2
Mar. 201
2
Apr. 20
12
May. 201
2
Jun. 201
2
Jul. 20
12
Aug. 201
2
Sep. 201
2
Oct. 201
2
Nov. 201
2
Dec. 201
2
Jan. 201
3
Feb. 201
3
Mar. 201
3
Apr. 20
13
May. 201
3
Jun. 201
3
Jul. 20
13
Aug. 201
3
Sep. 201
3
Oct. 201
3
Nov. 201
3
Dec. 201
3
Jan. 201
4
Feb. 201
4
Mar. 201
4
Apr. 20
14
May. 201
4
EURO 28 NORD AMERICA RUSSIA + UKR+ SERBIA
20121.270.175
20131.757.177
2014724.956
SeasonalityMarch: drop, April‐July: growth
October: peak
© Annalisa Paniz, AIELFonte: Eurostat. Elab. Paniz AIEL
The commercial partners are changing
49%
2%11%
29%
7% 2%
CENTRO EU
NORD EU
SUD EU
BALTICS
EST EU
NORD AMERICA
RUSSIA E UKRAIN
ALTRI
Totale: 1.270.175 t
2012
36%
1%2%
15%
31%
11%4%
CENTRO EU
NORD EU
SUD EU
BALTICS
EST EU
NORD AMERICA
RUSSIA E UKRAINA
ALTRI
20131,27 Mt
1,76 Mt
© Annalisa Paniz, AIEL
0
10.000
20.000
30.000
40.000
50.000
60.000Jan. 201
2
Feb. 201
2
Mar. 201
2
Apr. 20
12
May. 201
2
Jun. 201
2
Jul. 20
12
Aug. 201
2
Sep. 201
2
Oct. 201
2
Nov. 201
2
Dec. 201
2
Jan. 201
3
Feb. 201
3
Mar. 201
3
Apr. 20
13
May. 201
3
Jun. 201
3
Jul. 20
13
Aug. 201
3
Sep. 201
3
Oct. 201
3
Nov. 201
3
Dec. 201
3
Jan. 201
4
Feb. 201
4
Mar. 201
4
Apr. 20
14
May. 201
4
CROATIA ROMANIA AUSTRIA
Fonte: Eurostat. Elab. Paniz AIEL
Import from the main EU countries
© Annalisa Paniz, AIEL
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
Jan. 201
2
Feb. 201
2
Mar. 201
2
Apr. 20
12
May. 201
2
Jun. 201
2
Jul. 20
12
Aug. 201
2
Sep. 201
2
Oct. 201
2
Nov. 201
2
Dec. 201
2
Jan. 201
3
Feb. 201
3
Mar. 201
3
Apr. 20
13
May. 201
3
Jun. 201
3
Jul. 20
13
Aug. 201
3
Sep. 201
3
Oct. 201
3
Nov. 201
3
Dec. 201
3
Jan. 201
4
Feb. 201
4
Mar. 201
4
Apr. 20
14
May. 201
4
CANADA RUSSIA SERBIA USA UKRAINA
Source: Eurostat. Elab. Paniz AIEL
Import from the main extra EU countries
© Annalisa Paniz, AIEL
0 100.000 200.000 300.000 400.000 500.000 600.000 700.000
CENTRO EU
EST EU
BALTICS
NORD AMERICA
RUSSIA E UKRAINA
SUD EU
NORD EU
ALTRI
tonnellate
2013
2012
Import comparison 2012‐2013
© Annalisa Paniz, AIEL
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000AUSTRIA
CANADA
ROMANIA
LITH
UANIA
CROATIA
GERMANY
FRANCE
SLOVENIA
SERB
IA
LATVIA
UKR
AINA
ESTO
NIA
CZECH REP
BULG
ARIA
POLA
ND
SLOVA
KIA
PORTUGAL
SPAIN
RUSSIA
USA
HUNGARY
SWED
EN
DEN
MARK
ALTRI
2012
2013
Import comparison 2012‐2013
© Annalisa Paniz, AIEL
Imports
1,7 Mt
Production
0,3 Mt
Consumption
3 Mt??????
1 Mt
Demand and Supply. The numbers don’t match
The Eurostat data are
underestimated
BUT
There is a significant
amount of black / illegal pellets
© Annalisa Paniz, AIEL
HOW IS THE SITUATION OF ENPLUS IN ITALY?
© Annalisa Paniz, AIEL
0
1
2
3
4
5
6
7
2011 2012 2013 2014*
Milion
i di t
Prodotto
Commercializzato
6,5 Mt of produced pellet65% of pellet used in the EU residential sector is ENplus
Germania
Germania
ENplus at International level
Dati: EPC, 2014
173 producers251 traders
ProducedTraded
© Annalisa Paniz, AIEL
© Annalisa Paniz, AIEL
How will develop ENplus in Italy?
In less than 3 years the certification is becoming even more a point of reference
1 27
12
5
11
3
7
0
5
10
15
20
25
30
35
2011 2012 2013 2014
Autobotti
Distributori
Produttori
Pellet prodtto 150.000 t
Pellet distribuito 500.000 t
Pellet in autobotte 8.000 t
After Germany and Austria, Italy was the third EU country where the ENplus certification was implemented.
© Annalisa Paniz, AIEL
© Annalisa Paniz, AIEL
Primary Energy Cost Pellets vs other heating fuels
GPL
211
Gasolio riscaldamento
120
Gasolio agricolo
89
Pellet in autobotte 62
Legna da ardere(M20)
42
Cippato (M35)29
10
30
50
70
90
110
130
150
170
190
210
€/MWh
© Annalisa Paniz, AIEL
32
45
62
62
82
108
145
255
0 50 100 150 200 250
Wood chips M35
Wood logs M20
Bulk pellets
Pellet in small bags (15 kg)
Natural gas (residential)
Agricoltural heating oil
Heating oiò
LPG (residential)
October, 2014
�€/MWh
Primary Energy Cost Pellets vs other heating fuelsVAT and taxes included, delivery excluded
For the winter season the advantage will increase
© Annalisa Paniz, AIEL
Pellet prices in bags and in bulk
VAT and taxes included, delivery included
250
270
290
310
330
350
ott‐12 gen‐13 mag‐13 ago‐13 nov‐13 mar‐14 giu‐14 set‐14 dic‐14
€/t
pellet in bags pellet in bulk
© Annalisa Paniz, AIEL
THE CURRENT PELLET SUPPORT SCHEMES
© Annalisa Paniz, AIEL
Some Preliminary information
There is no specific support scheme specifically for pellets. The support of using pellet is included in other general systems
Pellet is supported trough two different schemes
Tax deduction. The deduction is allowed in 10 years for the 50% of expenses incurred for buying and installing a pellet stove.This support is included into the “Ristrutturazione edilizia”
Feed‐in‐tariffs for heating and cooling, known as ‘Conto termico’ is a scheme of support for small‐scale projects of energy efficiency improvement and production of thermal energy from Renewables.
1.
2.
The decree allocates every year € 700 million for projects implemented by private parties
© Annalisa Paniz, AIEL
Feed‐in‐tariffs ‘Conto termico’: short overview
Replacement of heating systems fed with heating oil, coke or biomass (NO NATURAL GAS) with new high efficient biomass boilers or local space heaters (85% of efficiency and emissions of PM, CO and COV below to a certain levels)
Eligible projects concern
This Feed‐in‐Tariffs, came into force on 3 January 2013 and implemented the Legislative Decree no. 28 /2011 which is the Italian application of the EU Directive RED 28/2009
What kind of biomass is allowed?
• Wood pellets certified in accordance with EN 14961‐2• Wood chips (in accordance with EN 14961‐4)• Wood logs (in accordance with EN 14961‐5)• Other not chemically treated biomass (in accordance with Dlgs
152/06)
© Annalisa Paniz, AIEL
Examples for pellet stoves (< 35 kW)
© Annalisa Paniz, AIEL
Examples for pellet boilers (< 35 kW)
© Annalisa Paniz, AIEL
CONCLUSIONS
© Annalisa Paniz, AIEL
• Italy is the biggest European Market for the
domestic use of pellets
• Italy is depending strongly from the importation
• The market logistics and organisation are changing
and in the close future North America will become
the major supplier
• Security of supply and stability of prices are the
main challenges for the future
Conclusions
© Annalisa Paniz, AIEL