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Lesson 2 of 8
Where residues go: markets, prices and cycles
The market map
Residues move business to business. A 2025 review of 125 studies (68% from North America and Europe) concluded that having a technology to use residues does not create a market. Logistics and infrastructure were raised as obstacles in 61.6% of studies, competition in 38.4% and supply and demand conditions in 32.0%. Bulky residues travel through local and regional channels; densified biomass such as pellets can be shipped internationally.
| Residue | Main material route | Main energy route | Typical constraint |
|---|---|---|---|
| Bark | Growing media, mulch, landscaping | Own boiler, district heat, CHP | Moisture, contaminants, small niche markets |
| Sawdust | Pellets, briquettes, some panels and pulp | Boiler, pellets | Moisture; competition between pellets and panels |
| Clean chips | Pulp, MDF, particleboard | Fuel chips | Quality specification; distance to buyer |
| Planer shavings | Pellets, bedding, panels | Boiler | Dry and light; storage and handling |
| Offcuts and slabs | Chipping for pulp or panel | Fuel | Need to chip and sort |
National structures differ
Finland (2018): wood-product industries produced about 9.1 million m3 of chips, 4.0 million m3 of sawdust and other residues and 3.3 million m3 of bark. Of this, 8.6 million m3 went to pulp and paper mills and the rest to heat and power plants. Less than 1% of Finnish wood-based side-streams go to chipboard and fibreboard, about 60% to energy (Finnish review).
Germany (2021): sawmill by-products used for pulp totalled 3.979 million solid cubic metres: 3.434 million softwood and 0.544 million hardwood. The softwood went 0.635 million to mechanical pulp, 0.725 million to sulphite pulp and 2.074 million to sulphate pulp. In Central Europe the panel industry competes much more intensively for the same fractions (the portal's reading of the separate national data).
EU27 pellets (2024): production was 19.5 million tonnes, 5% lower than in 2023; consumption was nearly 22 million tonnes; exports were 9 and imports 12 million tonnes. Because the EU relies on imports, domestic sawdust competes with imported pellets, which limits price spikes but also limits a mill's bargaining power (interpretation).
Prices and cycles
Open sources do not give a usable table of residue prices in EUR. What is documented is qualitative: in April 2024 German trade press reported falling sawdust prices and largely stable chip prices for MDF and pulp. The JRC wood-resource-balance work found that reported uses of woody biomass exceed reported sources, mainly because of the energy sector, so volumes are poorly measured and price signals are harder to read.
Residue supply follows sawnwood output. When sawnwood output is low, fewer residues exist for every user and prices of sawdust and chips tend to rise; when mills run at full capacity, residues are plentiful. That is why many integrated Finnish groups tie sawmills to pulp or energy plants with long-term contracts. Examples from the Finnish review: a sawmill supplying chips to a neighbouring sulphate pulp mill while sawdust and bark go to CHP plants; and a "virtual sawmill" that sells sorted side-streams to outside companies.
Worked example: reading the national data
- Finland 2018 total:
9.1 + 4.0 + 3.3 = 16.4 million m3. Pulp and paper took 8.6, so the share was8.6 / 16.4 = 52.4%, and the rest,16.4 - 8.6 = 7.8 million m3(47.6%), went to heat and power. - Germany 2021: the sulphate share of softwood by-products in pulp was
2.074 / 3.434 = 60.4%. The weight on a few sulphate mills is a dependency risk for a sawmill in that region. - EU27 pellets: if 2024 production of 19.5 Mt was 5% lower than 2023, then
2023 = 19.5 / 0.95 = 20.5 Mt. Note that dividing by 0.95, not multiplying by 1.05, is the correct reverse of a percentage fall.
Checklist: assessing a residue buyer
- Distance and transport mode: is delivery economic for a bulky, low-density product?
- Specification: bark content, moisture, species, contamination.
- Contract: long-term or spot? Volume commitment in both directions?
- Dependence: does one buyer take most of a fraction?
Key points
- Logistics (61.6% of studies), competition (38.4%) and supply-demand conditions (32.0%) hold residue markets back; a technology alone is not a market.
- Finland sends most chips to pulp (8.6 of 16.4 million m3 in 2018, 52.4%); Germany shows heavy reliance on sulphate pulp (60.4% of softwood by-products in pulp, 2021).
- EU27 pellet production was 19.5 Mt in 2024 (5% below 2023) with imports of 12 Mt.
- No verified EUR residue prices exist in the portal's sources; prices and volumes follow the sawnwood cycle.
- Long-term contracts and local clusters reduce exposure to the cycle.