European Wood Pellet Market Outlook 2026
Demand drivers, supply constraints, and pricing trends shaping the European wood pellet market in 2026 — heating, industrial, and RED III.
Europe consumes more than 24 million tonnes of wood pellets a year — the largest market in the world, split roughly 60% residential/commercial heating and 40% industrial power and CHP.
Demand drivers
- Gas price volatility keeping pellet heating competitive
- RED III (Renewable Energy Directive) sustainability rules
- District heating expansion in the Nordics, Baltics, and Austria
- Coal-to-biomass conversion at legacy power plants
Supply constraints
The industry is feedstock-constrained, not capacity-constrained. Sawmill activity — the source of the cleanest raw material — moves with construction demand, which slowed in 2024–25 and has been recovering unevenly.
Price outlook
The ARA CIF benchmark for industrial pellets traded in a €140–€180 range through 2025. Residential ENplus A1 delivered to Central Europe generally sits €80–€120 above that. Expect continued volatility linked to gas, freight, and heating-degree-day totals.
Pellet Industries ships ENplus A1 and industrial biomass pellets worldwide in 15 kg bags, big-bags, and bulk vessel loads.
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