Impact of the COVID-19 Pandemic on the Canadian Wood Pellet Industry

The ongoing COVID-19 pandemic has disrupted global economic activity in all sectors, including forest industries. Changes in demand for forest products over the course of the pandemic in North America have affected both primary processors such as sawmills and downstream industries reliant on residues, including wood pellet producers. Over the last decade, wood pellets have become an internationally traded good, mostly as a substitute for coal in electricity and/or heat generation, with a significant proportion of the global supply coming from Canadian producers. To determine the effect of the COVID-19 pandemic on the Canadian wood pellet industry, economic and market data were analyzed, in parallel with a survey of Canadian manufacturers on their experiences during the first three waves of the pandemic, covering the period from March 2020 to September 2021.

This work was supported by IEA Bioenergy Task 43 (Biomass supply). The full paper titled ‘Impact of the COVID-19 Pandemic on Biomass Supply Chains: The Case of the Canadian Wood Pellet Industry’ can be found in Open Access at the Journal Energies and is available here:
https://www.mdpi.com/1996-1073/15/9/3179/htm

Conclusions

Overall, the impact of the pandemic on the Canadian wood pellet industry was relatively small, as prices, exports, and production remained stable. Producers noted some negative impacts, mostly in the first months of the pandemic, but the quick recovery of lumber production helped ensure a stable feedstock supply after that. The pandemic did exacerbate certain pre-existing issues, such as access to transportation services and labour availability, which were still a concern for the industry at the end of the third wave in September 2021. These results suggest that the Canadian wood pellet industry was resilient to disruptions caused by the pandemic and was able to manage the negative effects it faced. This is likely because of the integrated nature of the forest sector, the industry’s reliance on long-term supply contracts, and feedstock flexibility, in addition to producers and end-users both being providers of essential services.