Prices for a waste-wood product are soaring as Russia's war in Ukraine upends supplies and stokes a US export surge

Brian Evans
Updated ·1 min read
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The US is filling a void for wood pellets because of Russia's war in Ukraine upending supplies.
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  • Russia's war in Ukraine is pushing the US to fill a void for waste-wood exports.

  • Prices have soared as a result for pellets, which are used in Western Europe as a coal alternative.

  • US exports of waste-wood are outpacing 2021 metrics so far this year.

Russia's war in Ukraine has upended supplies of essential waste wood exports to Western Europe and the US is filling the void.

A report from the Wall Street Journal said that wood-pellets originating from Belarus, Russia, and Ukraine are being held up and pushing prices higher. As a result, US exports of waste wood have soared to $170 a ton compared to $140 at the same time last year. So far this year, the US has moved 7.4 million metric tons of pellets abroad.

Western Europe uses waste-wood for energy production instead of coal, as burning pellets counts toward emission targets in Europe.

And companies are reaping the benefits of the constraints on supplies. Shares of Enviva Inc., based in Maryland, have seen a return of 114% since shortly before the onset of the Covid-19 pandemic, compare to the 42% gain for the S&P 500 in the same period.

And more supply is needed to make up for the loss stemming from the war in Ukraine. Roughly 3 million tonnes needs to be replaced. Enviva told the WSJ that the company signed a slate of new deals with German customers for five, 10 and 15 years. Natural gas and oil have also soared in Europe in response to the war and resulting supply constraints.

Burning wood pellets is no cleaner than using coal for energy, environmentalists say, when accounting for total emissions.

Read the original article on Business Insider