German waste wood market caught wrong-footed by subsidy extension

Demand for waste wood is high.
02.02.2021 − 

The market for waste wood in Germany, and especially in the southern part of the country, has become more dynamic in some cases at the beginning of the year. The typical seasonal dip in volumes occurred at the turn of the year and arisings have been rather slow to pick up again. Many respondents describe a sense of uncertainty on the market, with some saying that players on the power plant side are becoming somewhat nervous. According to EUWID respondents, plant operators have had to significantly dip into their winter stocks already, especially in the south. In some places, the inventories have now shrunk to levels typically seen at the end of March.

Some of the uncertainty arose from the decision made shortly before Christmas to extend some subsidies under Germany's Renewable Energy Act (EEG). Due to expire at the end of 2020, these subsidies had been paid to biomass power plants incinerating waste wood. Without the subsidies, some plants would have shut down or switched to another fuel. With government support now extended for a further two years the demand for waste wood fuel will be higher than anticipated.

In reaction to this news, suppliers of waste wood reportedly even tried to renegotiate prices. Some were apparently hoarding waste wood in expectation of risings prices in the price of wood.

You can read the full market report including prices in the print and e-paper editions of EUWID Recycling & Waste Management 03/2021, out 10 February. Premium subscribers can access the market report right away:

Waste wood in Germany

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