With a production of about 16.9 mmt in 2018, about fifty percent of global production, the EU is the world’s biggest producer of wood pellets. Compared to production plants in North America, plants in the EU are mainly small or medium-sized. Most of the main pellet producing countries have a sizeable domestic market for residential heating pellets. Recent demand for pellets has supported a further increase in domestic production. 

Germany is the third largest wood pellet producer in the world after the United States and Canada. It has currently about seventy production facilities for wood pellets with a total annual production capacity of 3.8 million mt. In 2018, production amounted to 2.4 million mt, 95 percent of which were produced from residues of the timber industry. The vast majority of the wood pellets produced in Germany are used for heating. The use for electricity production is negligible. Germany is a net-exporter of wood pellets. The vast majority of trade occurs with neighboring EU member states and Switzerland. Italy is the main market.