France

Pellet Report

November 2011 Authors:

Nicolas Audigane, project manager Anne-Catherine Mangel, director

Propellet France

The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein.

Table of content
Fact sheet ................................................................................................................................................. 2 1. 2. 3. 4. 5. Introduction ..................................................................................................................................... 3 Pellet markets .................................................................................................................................. 4 Pellet quality and certification ......................................................................................................... 9 Sustainability ................................................................................................................................. 12 Conclusions and outlook ............................................................................................................... 13

Fact sheet
Pellet production in kt
year 2005 2006 2007 2008 2009 2010 Source of information Plants 2 or 3 Capacity Production 25 000 50 000 100 000 208 000 345 000 465 000 SNPGB

42 50 Propellet

800 000 Propellet

Pellet consumption in kt
year 2007 2008 2009 2010 Source of information Heat Power 0,2 (350 MWatt) 193 000 305 000 405 000 SNPGB 0,5 SER 193 000 305 000 405 000 SNPGB Name of the power plants (& consumption)

Heating Devices
year 2005 2006 2007 2008 2009 2010 Source of information Boilers <50 kW (Residential) 1 250 3 697 798 5 510 4 310 5 000 ObservER Boilers >50 kW (Commercial) 5 710 10 278 13 787 17 100 23 000 30 000 ObservER Stoves 1 250 3 697 798 5 510 4 310 5 000 ObservER

1. Introduction
Country situation In France, the pellets market has a very small position in the heating market because our main energy sources are fossil and fissile energies (nuclear, electric, oil). The pellets stove market represents only 5% of the heating market of independents heating systems in our country and the pellet boilers market represents just 1% of the global market of boilers in 2010. We have done a survey concerning pellets in 2010 and the first results confirmed this view of the market: 50% of French people dont know what wood pellets are. In France, pellets are not used to produce power. The first goal for pellets is the household heating system. We have few medium power heats. Wood pellets its mainly for individual use. Importance of renewable In 2007, France has set up meeting concerning sustainability management: le Grenelle de lenvironnement. Several decisions were implemented about all the renewable energies. The French goal concerning renewable energies is to reach 23% of the global consumption of country in energies in 2020 and the biomasss aim represent 45% of this principal goal. The biomass contained biofuels, processing of gasification and methanation and firewood (logs, pellets and woodchips). This is a strong commitment because energies from biomass are not well known by French public. When the subject is discussed, the name of the energies that occur most offend is solar energy and wind power and not ecological firewood.

2. Pellet markets
Statistic on pellets production and capacities Pellets production Capacity (tons) Year 2005 2006 2007 2008 2009 2010 Source information Plants 2 or 3 Production (tons) 25 000 50 000 100 000 208 000 345 000 465 000 SNPGB

of

42 50 Propellet

800 000 Propellet

There are in France fifty production plants, located all over the country. The pellet industrials come together to increase their production capacity, the scope of their actions. They begin a process of creating an industry of quality (Deshydrome with SGA becomes NEeco...). The French pellets production, like other European country, is increasing since ten years. Many firms are working below a really potential of capacity because its a very young market. But with the increasing annual sales of pellets stoves and boilers we think that our manufacturers will have the ability to meet demand in future.

French production of wood pellets (in tons) (Source: SNPGB data, Propellet France prospectives Janvier 2011)

Year 2005 2006 2007 2008 2009 2010 Source of information

Consumption Heat (tons)

Power (Mtoe)

0,2 (350 MWatt) 193 000 305 000 405 000 SNPGB 0,5 SER

82% of the French pellets productions are consumed in France in 2010. Our market is very little and he is increasing each years. We have the capacity to produce more to meet the increasing demand. Pellets prices are increasing because of the increasing prices of saw dust and other raw materials. Sawmills that value still little raw materials, barks and sawdust, should make in practice the highest prices than their colleagues already practicing. Under these conditions, it is likely that there is homogenization of pellet prices with an increase in the average price. Type of consumers

Year 2005 2006 2007 2008 2009 2010 Source of information

Heating devices Boilers (<50 kW) Boilers (>50 kW) 1 250 3 697 798 5 510 4 310 5 000 ObservER

Stoves 5 710 10 278 13 787 17 100 23 000 30 000 ObservER

The majority of consumers are individuals and they use pellet stoves or pellet boilers.

Annuals sales of pellets stoves and boilers in France:

On these estimates of annuals sales of pellets installations performed by ObservER for ADE ME, consolidates by SER (syndicate of the renewable energies), we can observe the market trend. This graph shows a trend over that real image of the market situation. The market for pellets stove experienced a strong growth while sales of pellet boilers tend to stagnate. Cope with the increased sales of pellet stove expected in the coming years, it is important to ensure the achievement of quality facilities. Accumulated annuals sales, the installed base in France represent 120 000 of pellet stoves and 25 000 of pellet boilers. An enquiry organized by differents French wood organization (CIBE, SNPGB) explains the pellets opportunity on the industrial or collective solutions for heating. It will help this is a new market in development: on the end of 2011 the most important market for pellets in French is individual heating. Import / Export Approximately 15% of French pellets production is for exportation. A few society exports pellets in nearest country like Italy, Germany, Great-Britain and Spain. This is not an important part of our market.

Wood pellets production in France 2005 2006 2007 2008 Production

1 2 2

2009 345 000 t 104 000 t 59 000 t 390 000 t

2010 465 000 t 143 000 t 66 000 t 542 000 t

25 000 t

50 000 t

100 000 t

208 000 20 000 t 35 000 t 193 000 t

Importations

Exportations Consommations
source SNPGB source Eurodata

The official numbers (Eurostat) of importations and exportations for the French pellets market are very amazing for us. IMPORTATIONS Eurostat announce for 2009, 104,000 tons of pellets and 143,000 tons for 2010. In same time SNPGB give other tonnages: 10,000 tons for 2009 and 20,000 tons for 2010.The tonnages proposed by SNPGB or by Eurostat are not very usable. The French customs service has identified the pellets in wide market by a generic name boulettes de bois which not used in French. It is a source of mistake in the import and export French data. EXPORTATIONS This is the estimates tonnages of exportations from SNPGB. Exportation Year 2008 2009 2010 Tons 35 000 50 000 80 000 Concerning exportations the tonnages given by Eurostat are approximately same: 59,000 tons for 2009 and 66,000 tons for 2010. A process is underway to change the name in data from the French customs service. It wont be changed this name after 2015 The goal is to have access to real data concerning each wood product exports.

Publication of a pellet price index

Evolutions of energies cost in euros centimes/kWh PCI. Quaterly we publish a price index that compares wood pellets (packed in bulk) with other fossils energies (electricity (pink), propane (dark blue), domestic fuel (black), natural gas (blue). Seventeen firms members of Propellet are contacted to make it (producer and retailers of wood pellets). To realize this index, we interview our firms about the price they charges for delivery of five tons of woods pellets in an area of fifty kilometers. The result for the fourth price index of 2011 is 5, 02 euros centimes /kWh. This allows us to follow the evolutions of energies cost over several years and to bring some reasons of this evolution at many actors of wood pellets sector and other professionals (reporters, journalists). In 2012, this index of woods pellets will change. The department of ecology will help us make it more visible.

3. Pellet quality and certification

Description of stakeholder enquiry In November of 2011, we realized the Pellcerts enquiry for France and we received 22 answers by different firms from the pellet market: eleven producers or retailers of pellets, seven manufacturers or retailers of pellets stoves or boilers and four stoves or boilers installers. Concerning our feed-back about this enquiry some remarks were made: Some of these respondents dont know the existence of the new certification ENplus, to them the French pellets market have so much certification in place and they dont know why the European pellets council would like to take in place the new ENplus certification. There are already some certifications in France for the wood pellets: NF and DINplus and some of our professionals dont know the commitments of all of them. French pellets producers and retailers would like to became ENplus actors in France, but if the certification in place (NF, DINplus, CBQ+) based their criteria and foundations with EPC. These stakeholders dont know advantages the new brand will bring for their activities. In addition, some of the respondents are aware the new certification brand will become an obligation in the medium term. Problem encountered We encountered one problem concerning the realization of this enquiry. We have treated only 22 professionals answers because we are in high season for the pellets delivery. This problem should be the same in each country where the survey was conducted. Quality of pellets In France, the professionals of wood pellets place our production in high step. We place the quality at the center of the pellet production. To produce a good quality of wood pellets, some characteristics are required. This concern: - Calorific value and moisture - The rate of fine (particles smaller than two mm emitted in the flue gases during combustion) - The ash - Mechanical strength - The bulk density - The sulfur, chlorine and nitrogen

Many respondents place quality at the base of their business, not only wood pellets but also according standards or certification in each other trade interviewed.

Existing quality certification / label scheme In France 85% of the French pellets production was certified by DINplus, NF Biocombustibles or ENplus in 2011. The French pellets market has four different certifications in application: - NF Biocombustibles (production and delivering certification) - DINplus (only production certification in France) - Chaleur Bois Qualit + (only delivering certification) - ENplus (production and delivering certification) - PEFC and FSC (sustainability only) NF BIOCOMBUSTIBLES SOLIDES NF Biocombustibles is a property of AFAQ - AFNOR, a French certification organization in different kind of markets. AFAQ mandated the FCBA (France Cellulose Bois Ameublement) for the management of this certification. NF BIOCOMBUSTIBLES SOLIDES, granuls de bois represent ten production plants in France and three pellets retailers. This system includes a real delivery certification scheme for the retailers job. The NF BIOCOMBUSTIBLES SOLIDES brand also includes wood-coal and wood-logs. Useful links: New handbook for producers and distributors: www.fcba.fr/getfile.php?table_fich=CERTIFICATION&id_fich=55&nom_champ_fich=CERTIFICA TION_REGLES_GEN_URL_DOCZ Link up to date of the NF BIOCOMBUSTIBLES holders (13 in France): www.fcba.fr/getfile.php?table_fich=CERTIFICATION&id_fich=55&nom_champ_fich=CERTIFICA TION_TITULAIRES_URL_DOCZ Contact : FCBA : Siegrid Paris - responsable de marque - siegrid.paris@fcba.fr - Tl : 01 40 19 48 72 CHALEUR BOIS QUALITE + Chaleur Bois Qualit plus is also a property of AFAQ - AFNOR.AFAQ mandated FIBOIS ArdcheDrme and FIBRA for the management of this certification. At the beginning, the objectives are concentrated for the wood chips. This certification is just a delivering certification for wood pellets and not a certification about the product composition. Four firms in Rhone-Alps are certified by CBQ+ and some initiatives are beginning in others regions of France: Franche-Comt and Ile de France.

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Useful links: Website of the CBQ+ certification: www.chaleur-bois-qualite-plus.org Link up to date of the CBQ+ holders: http://www.fibra.net/docs/4/entreprises_AFAQ.pdf Contact: FIBRA - Agropole 23, rue Jean Baldassini 69364 Lyon Cedex 07 info@fibra.net Tl : 04 78 37 09 66

DINplus and ENplus DINplus represent ten production plants and four pellets distributors in France. ENplus is at the beginning of his activity: one French pellets producers has just got the ENplus certification in September 2011. PEFC and FSC Around 1/3 of the French forest is certified by PEFC (5, 06 million hectares) in 2010. The PEFC system is much more developed in France than FSC (98% of French certified forest surfaces). FSC France represent 13% of all forests firms certified FSC, in 2008. These firms are engaged to use only wood from sustainable forest in the world. Share of certified pellet We have noticed that many professionals confuse norms with certification, yet the distinction is significant. Norms are public, but certifications are private. Each professional can meet the norms recommendations and announce but only assigns can assert certification. Certification guarantees the respect of the norm by an audit system and some internal and external controls. Concerning the pellet market, today we have only one European norm (EN 14 961-2) and several certifications: NF Biocombustibles solides, DINplus, ENplus and CBQ+. For example, a firm which indicates consistent at DINplus is wrong, if it is not certified by Din Certco and if it doesnt have an approval number. As a conclusion: 85% of the French pellets production was certified either by DINplus, NF Biocombustibles solides or ENplus in 2011.Twenty-eight companies are certified: thirteen by NF Biocombustible solides, fourteen by DINplus and one by ENplus. Among around forty of the French production plants, nineteen are certified. It is more difficult to evaluate the amount of pellet certified by retailers, anyway and the delivery certification scheme are not very developed in France (only 3 delivering companies are certified by NF and 4 companies by CBQ+).

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4. Sustainability
Existing initiatives FLAMME VERTE label The FLAMME VERTE label has been developed by ADEME (a branch of the ministry of ecology) and different manufacturer of heating systems. This label is administrated by SER (syndicate of the renewable energies). Concerning the household market, boilers must: - have a minimum yield of 70% - have a rejection rate of carbon monoxide below 0,3% - respect the requirements of the European standards NF CEN 303.5 on polluting emissions. Since the first of January 2011, the criteria have changed to reach a common goal for all certified companies by 2015. National requirements In France, consumers can get some subsidies and financial support to help them to invest in a woods pellets system, but they decrease from year to year. The tax credit for sustainability development (TCSD) It allows households to deduct from their income tax the expenses incurred for energy efficiency improvements to their primary habitation. It is a way to give subsidies. In 2011, as part of heating with pellets, the amount of the tax credit ranges from 22% to 36% of expenditure tax (including labor) paid between 1st of January to 31th of December 2011. For the 2012 year, French national assembly decided to reduce the credit. Here are details to consider: 18% in primary acquisition and 31% for renewal equipment Additional 10 points if completion of two work stations (categories thermal insulation of walls, windows or ceiling and in the positions biomass heating or hot water, condensation The TCSD will be 28% or 41% of biomass equipment. It is possible to combine the assistance aid with obtaining an interest-free loan if your wages do not exceed 30,000 Euros per year. Obtaining of this aid will be conditioned by the qualification criteria of the installers.

Value added tax at 5, 5% for the purchase of fuel and equipment for energy production using renewable energy sources. It will reach 7% in 2012. This value added tax is less than the common tax on other activities: 19, 6 % (22 % in 2012) CEE (saving energies certificate) This is a French system to force polluting companies (fossil energies providers/suppliers for instance) to take measures to encourage saving energy and renewable energy: to prove it, theme must collect saving energy certificates. For instance, each acquisition of a new device for pellets may be subject 12

to a saving energy certificate, which is signed for the purchase. The amount to the users of this certicate is variable and depends on the professional involved in the collect (pellets supplier, pellets heating system installers, fossil fuel suppliers).

5. Conclusions and outlook

The prospective Propellet on sales trends and on pellet consumption are based on two scenarios: Scenario 1: upgrading of Austria and Italy in 2020: We assume that in ten years, the French pellet market will be at the actual Austrian and Italian market level. The Austrian market for pellet boilers in 2010 was 10 000 pieces on a global market of 70,000 boilers. Extrapolated to the French market this would give a market of 85,000 pellet boilers per year. The Italian market for pellet stoves in 2009 was approximately 200,000 stoves per year. Extrapolated to the French pellets stoves market this would give a market of 200,000 stoves par year. Scenario 2: prospective study ADEME 2010-2020: ADEME has made a prospective study 2010-2020 on the development of domestic wood energy in France. The most probable scenario presented by the study predicts for 2020 annuals sales of 136,000 pellet stoves and 87,000 wood boilers including pellet boilers at a higher level than today One quarter of wood boilers sold today are pellets boilers. Our own estimation for 2020 is at one half of all facilities: approximately 43,000 pellet boilers per year. This high increasing of sales must be linked to a constant consumption of wood: a strong goal of the Grenelle (French environment law) is to keep a constant amount of wood consumption by 2020 and to increase the number of houses heated with wood, due to lower consumption of housing and improving performance of devices. The study states that this scenario is feasible if there is a strong will of governments to support the development of wood heating systems.

Representation of the two assumptions sales of pellets stoves and boilers

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Transposition of this two assumptions tons of pellets consumed This two assumptions lead to a annual consumption between two and three million tons by 2020 whether 0.8 to 1.2 Mtoe (million tons oil equivalent) for a total constant over the next ten years by about six Mtoe of wood energy consumed each year for the domestic use. Adoption of EN standards / ENplus The ENplus market is very young in France. Some French companies are interested to get information concerning this European global certification scheme ENplus. We can think that the pellets market will moved toward this harmonized certification in the future, even in France. A very large part of the French pellets production can be certified EN+ with A1 quality, because it is the same standards as the actual certification that certifies 85% of the French production. Future development of pellet sector The most important issue to achieve a recovery of the ENplus certification in France is to cover existing certifications (NF, DINplus and CBQ+) by taking into account some of these criteria.

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