The wood heating market - Italy

1.1 Definition and scope of the study

The wood heating market identifies the energy recovery of forest (branches, small trees, etc.) and industrial (sawdust, chips, etc.) by-products.

Wood pellets are consumed in two different markets:

1. In the power generation sector: pellets are a co-fuel in coal-fired power plants and a sole fuel in coal-fired power plants converted to reduce greenhouse gas emissions from power generation.
2. In the residential heating sector, they are widely used as a practical solid biofuel in stoves and automatic boilers.

Over the past decade, global production of wood pellets has increased steadily, driven by strong growth in demand. During this period, global production of wood pellets has more than quadrupled.

In Germany and Austria, where pellet boilers dominate the market, wood is delivered to the end user mainly in bulk, while in Italy and France, where pellet stoves account for a considerable share of consumption, wood is purchased by the consumer in small bags (∼15 kg).

In Italy, wood pellets are mainly used for heating in the residential sector (boilers and stoves). Policies that favor the renewable heating sector in Italy include

• Tax incentives: wood pellet heating systems can benefit from a scheme to support energy savings in the building sector through tax deductions. The maximum deduction is 30,000 euros;
• Grants (Conto Termico): to promote energy efficiency and the use of renewable energy for heating in the private and public sectors;
• White Certificates (or Energy Efficiency Certificates - EEC): tradable securities certifying energy savings in energy end uses.

Italian consumption of wood pellets has increased in recent years, remaining well above domestic production levels. Pellet consumption is therefore largely covered by imports. The largest concentration of producers is in the northeast of the peninsula. Lombardy is the main production location, with 45 percent of the national supply, followed by Veneto (18 percent), Friuli-Venezia Giulia (16 percent) and Trentino-Alto Adige (8 percent).

In recent years, sustainability requirements for solid biomass have been established in several EU countries. Therefore, market players need to adapt to these requirements in order to continue their activities.