The wood pellet sector is calling for policies that reduce production costs

Last Friday, October 7th, the Apropellets association held its regular assembly in the Navarrese town of Arbizu, hosted by its Navarrese members Naparpellets (Etxarri-Aranatz) and Beropel (Lesaka). Among the most current issues affecting the sector, Apropellets applauds the government's decision to lower the VAT on wood pellets to 5% . This was a long-standing demand of the sector, which had been requesting to align itself with other countries in the region where a reduced VAT rate was already applied. Apropellets and the sector as a whole maintain their demand for a reduced VAT rate of 10% in the long term, which would provide greater security and foster stable growth for the sector .

As part of the forestry and timber sector, Apropellets joins and supports the demand for forest policies that facilitate and expedite the mobilization of the enormous potential of raw materials that are currently lost or burned in our forests . Forest management and sustainable use are the best guarantee for the survival and improvement of the quality and health of our forests. Wood is a renewable and local raw material with enormous ecosystem, economic, and local benefits.

At Apropellets, 76% of the raw materials demanded come from byproducts of the wood processing industry . The decline in production in the forestry and timber industry is creating tension in the availability and increasing the cost of raw materials, resulting in price increases of over 100%, which represent a significant portion (approximately 50%) of the final production costs of wood pellets.

There is also concern about the cost of electricity , which remains 8 to 10 times more expensive for wood pellet manufacturers than at the beginning of 2021. Electricity costs have risen from less than 8% of production costs to over 20%. Apropellets, like other industrial sectors, is calling on the government for energy policies that ensure electricity prices accurately reflect the true costs of most electricity generation .

Production costs and a shortage of raw materials are causing some factories to operate below capacity during periods of high demand. As many as 12 Apropellets member plants produced below 70% capacity during the pre-season, and 7 do not expect to operate above 80% during the season.

The sector as a whole hopes to meet national demand, but this year there is more uncertainty about how the season will unfold than in previous years. A key aspect of this effort is the overall sense of responsibility shown by producers, who are keeping their product on the domestic market to meet the demand of Spanish consumers, thereby rejecting much more economically attractive opportunities from abroad. Apropellets wants to reassure the public that there is currently sufficient product and advises against the excessive stockpiling that has sometimes been observed.

In its work protecting consumers, Apropellets has been warning of a resurgence in scams involving the sale of wood pellets, taking advantage of rising prices . The emergence of fake online stores and the impersonation of some producers have led us to establish a protocol within Apropellets to report suspicious websites as they are identified and to demand greater efficiency from the authorities in removing these types of websites.

Furthermore, it was decided to establish a working group with other national associations from other eurcountries and the entities that manage the EN Plus and DIN Plus certificates, to alert and detect possible scams and the entry of counterfeit products, which mainly affect distributors from other countries.