The United Kingdom is expected to consume 10,35 million tonnes of wood pellets this year, four percent more than in 2025 and the highest level to date. This is stated in a report by the Foreign Agricultural Service of the US Department of Agriculture, published via the Global Agricultural Information Network. To meet that demand, an estimated 10,15 million tonnes of imports are needed.
The volume of that import is the core of the story. British domestic production is limited, and in the 2024 report, nearly 74 percent of the pellets came from the United States. The United Kingdom has been the world's largest buyer of imported wood pellets for years, and that position remains intact this year.
Peak just before a turnaround in the British support system
Virtually the entire British demand goes to large-scale energy generation. In the 2024 report, over 93 percent of demand was attributed to industrial energy production, with seven percent for domestic and commercial use. The residential segment is small and, according to the same report, has continued to decline since the phasing out of the Domestic Renewable Heat Incentive.
The record estimate coincides with an impending change in British support. According to the report, this is expected to shift from Renewable Obligation Certificates to Contracts for Difference by 2027. The British government announced in February 2025 that subsidies for large-scale biomass producers will fall from April 2027 to a range of 300 to 650 million pounds per year, depending on wholesale electricity prices. This will be accompanied by stricter sustainability criteria, seasonal capacity limits, penalties for production shortfalls, and a levy mechanism for excess profits.
Additionally, on August 14, the British Environment Agency granted an amendment to the environmental permit enabling the application of carbon capture at Drax Power Station. The company had submitted that application in May 2023. The permit does not mean that the project will be implemented, as investment and policy decisions are still required for that.
The Netherlands is refraining from further subsidy cuts for the time being.
In the Netherlands, the incentives for low-value applications of woody bio-based raw materials have been phased out in recent years. Since 2017, no new subsidies have been issued for co-firing and full-firing of bio-based raw materials. As of 2022, new permits for low-temperature heat below one hundred degrees were added. In 2023, the subsidy for heat application in greenhouse horticulture and district heating ended, and as of 2024, electricity production is excluded from new permits for the combined generation of heat and electricity. According to the parliamentary letter regarding the opening of the SDE++ 2026, the number of applications for biomass combustion has decreased significantly as a result.
For this round, it was investigated whether further phasing out would be opportune, in fulfillment of an earlier commitment to the House of Representatives. The Cabinet's conclusion is that further phasing out is not desirable at this moment. According to the letter, the remaining categories mainly concern bridging applications, for which insufficient sustainable alternatives are currently available. According to Minister Hermans of Climate and Green Growth, further phasing out would primarily pose the risk that bio-based raw materials remain unused and that there is a return to fossil alternatives for heat production.
The SDE++ application round has been shifted by one month this year and runs from October 27 to November 26, with a budget of 8 billion euros. Among the new features is a category for extending the lifespan of B-wood boilers of 5 MW or more. In this case, only the heat-producing part of the installation is eligible for subsidy, and only for industrial applications, not for supply to district heating networks.
Source: Biomassmagazine.com
Other sources: USDA Foreign Agricultural Service; Bioenergy Insight; Parliamentary Document 31239, no. 444, RVO
Photo: Sebastien Rabany – Adobe Stock
