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FOEX Indexes Ltd is an independent company providing audited, trade-mark registered pulp, paper, recovered paper and wood based biomass price indices.

Jul 17, 2018

Market Comments

PIX Bioenergy - Pellet Nordic

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Pellet Market – The EU has agreed on the Renewable Energy Directive update (REDII). The new binding target for the share of renewable energy in 2030 is 32%, which can still be adjusted in 2023. The annual increase target in renewables-based heating and cooling is 1.3 percentage points. For the bioenergy to be accepted in the renewable energy targets and to gain public financial support, it needs to meet the sustainability and greenhouse gas savings criteria. Exemptions are under 20 MW solid biomass and lower than 2 MW gaseous biomass fuels-consuming facilities. Waste and industrial residues are excluded from these criteria. The parliament will hold the final vote on the directive most likely in September.

According to the Hawkins Wright Forest Energy Monitor, the spot demand for pellets has diminished when entering the summer season. This is also impacted by some facilities being down due to maintenance and low heat demand.

June weather was close to averages in some parts of the Nordic countries, while in the south the weather was warmer and drier than the seasonal norm. The Euro weakened again slightly against the Swedish Crown in June, and the monthly average exchange rate went down by 0.6%. This means a slight downward push for the SEK value, and the opposite for the Euro value. After removing the highest and lowest 10% of the price quotes, the PIX Pellet Nordic index value in Euro terms showed an increase of 35 cents, or of 1.32%, and closed at 26.82 EUR/MWh. The index value in SEK went upwards by 1.93 SEK, or by 0.70%, to 275.68 SEK/MWh.