Pellet prices surge by a third in one year

Heating pellet prices have risen by one-third in the past year, according to ORF. The increase is steeper than the rise in heating oil prices, which became more expensive during the Iran war.

A tonne of pellets now costs more than 400 euros. The pellet industry says the price increase is partly due to shortages of the raw material.

Pro Pellets Austria, the association representing Austria’s pellet industry, says heating with pellets costs about eight cents per kilowatt hour. The comparable cost is about 16 cents for oil and 17 cents for gas, making pellets the cheapest energy source according to the association.

Salzburg’s energy advisory service said switching away from oil was still worthwhile despite the higher pellet prices. Gerhard Löffler, head of the state’s energy industry and energy advice department, said pellets remained significantly cheaper than heating oil. An average household could save about 1,200 euros a year at current prices, he said.

The increase has several causes. Sawmills have been supplying pellet producers with noticeably less sawdust, which has become scarce and more expensive. A Salzburg pellet producer said the international economic downturn had reduced orders for sawmills and, as a result, exports of sawn timber.

Energy wood is in high demand, so pellet producers must currently buy more expensive sawmill byproducts to meet rising demand for heating pellets. Pro Pellets Austria advises households not to delay or try to time their purchases this year.