Industrial Wood Pellets for Power Plants: What Off-Takers Buy

Industrial wood pellets are a fundamentally different product from the bags at your local hardware store. Volumes are 10,000+ tonnes per shipment, buyers are utilities, and contracts run for years.

Grades

• I1: ash ≤ 1.0%, closest to residential quality
• I2: ash ≤ 1.5%, mainstream utility fuel
• I3: ash ≤ 3.0%, coal-conversion off-take

Buyers

Converted coal units (Drax in the UK, Ørsted historically in Denmark), dedicated biomass CHP plants across the Nordics and Baltics, and industrial process heat (cement kilns, greenhouse operations).

Contract structure

Multi-year off-take agreements with monthly nominations, indexed pricing (ARA CIF + spread), and strict sustainability certification (SBP, FSC, PEFC). Newcomers rarely enter industrial without an established trading counterparty.