Every year, the USDA's Foreign Agricultural Service publishes Global Agricultural Information Network (GAIN) reports offering fact-based, data-rich updates on agricultural commodity markets, including for wood pellets. Although produced by a US government agency, they provide a broad overview of global market trends, making them essential reading for anyone involved in the wood pellet trade. Their latest edition on the EU, the world's largest wood pellet market, is no exception.
The 2025 Wood Pellets Annual brings welcome news, with the USDA expecting EU pellet demand to grow this year. This follows a rare dip in consumption in 2023 and 2024, the first in a decade, caused by milder winters, power plant outages, low electricity prices, and well-stocked warehouses after the 2022 energy crisis.
On the residential side, the report projects growth led by France, Germany, Austria, and several Southern and Eastern European countries. Former stronghold markets such as Italy and the Nordics are seeing stagnation, largely due to limited sustainable wood supplies driving higher pellet prices.
Policy support remains a key factor: France's Multiannual Energy Program (MEP) aims to double heat generated from biomass between 2016 and 2028, while Germany, Poland, the Baltics, and Portugal are also increasing incentives. According to the report, these policies mean “the amount of pellets available for [intra-EU] export is declining in traditional producing countries,” which in turn is “contributing to growing EU demand for [extra-EU] pellet imports.”
Nearly half of EU pellet consumption comes from large-scale industrial users, primarily power and heat plants in markets such as the Netherlands and Denmark. This is the largest segment for imported wood pellets. After weaker activity in 2024, the report also forecasts a recovery in the industrial sector this year.
In the Netherlands, one of the country's largest biomass co-firing plants completed a full conversion to biomass in 2024, and the report cites sources noting that pellet use increased significantly in the final quarter of the year. While consumption is expected to rise further in 2025, the USDA also points to some overhang from previous stock-building. Danish consumption is also forecast to increase, with combined heat and power (CHP) plants maintaining their long-term transition away from fossil fuels toward woody biomass.
The USDA notes that “EU demand for pellets has significantly outpaced domestic [EU] production over the past ten years,” increasing the use of international biomass – mostly from the United States and Canada, but more recently from Brazil, Vietnam, Malaysia, and Thailand. Imports are forecast to recover to 4.68 million metric tons (MMT) in 2025.
While this is below the exceptional highs of 2021 (5.3 MMT) and 2022 (5.8 MMT), those years were shaped by post-COVID recovery effects and surging energy prices following Russia's invasion of Ukraine. Against a more typical pre-crisis benchmark, such as 2020's 4.67 MMT, the 2025 projection represents a solid return to form for EU pellet imports.
About the author
Andrew Georgiou
Vice President, Global Policy, USIPA
Andrew Georgiou is Vice-President for Global Policy at the US Industrial Pellet Association (USIPA), a wood energy sector trade association representing members operating in all areas of the wood pellet export industry. With almost 15 years of experience working in politics and public policy he leads USIPA's engagement with policymakers across Europe, the US and Asia. He sits on the Board of Bioenergy Europe and takes part in a number of working groups on a broad range of biomass policy issues affecting markets across the globe.
