cost of wood pellet plant

Wood pellets are important commodity in the world of industry and daily use. The pellets are a common type of biomass. Biomass is any biological material that can be used as fuel—including grass, corn, wood, and biogas as well as other forestry and agricultural residues. We even have regulation regarding the use of pellet, certain countries even have even more strict regulation just about the material of the pellet it self. It has become one of profitable commodity to be working on a wood pellet plant. If you would like to start your own pellet manufacturing business then you should attend to these essentials.

best wood pellet plant

Questions before building a pellet plant business or factory?

  • How is the development trend of the global pellets fuel market?
  • What is the pellet price in the target market?
  • What feedstock can I use?
  • How much does feedstock costs?How much does it cost to start a pellet plant?
  • How does the financial feasibility for a pellet plant go?

ABC Machinery would be more than pleased to help you answering to the above questions. Feel free to contact us for further communication!

The Global Market Development Trend for Wood Pellet

Pellet Projects Build In Northwest Territories

Commonly known that for each country the pellet market can be divided to two markets which are the local market and the overseas market, they include:

  • Residential costumers

Residential costumers use the biomass or wood pellets for heating their houses or workplaces, such as apartments, offices, schools, and other public or business buildings. They will have a yearly regular demand for pellet fuel and will stock their needs before winter season. The need for the residential costumer will reach to hundreds of tons per year. This number would be likely to increase due to the residents are usually increase from time to time. The residents find wood pellets would be comfortable and environmentally friendly.

  • Industrial costumers

Industrial costumers would use the pellets for their industrial need such as machine fuel. As the environment problem has been a serious concern of many governments, industrial players has to come up with forest renewal or alternative source to manufacture the pellet from. So nowadays industrial purposes for using pellets are increasing due it is more economical than using mineral oil or natural gas that saves the industry more than half the heating cost. This economical value could be also applied to the residential costumers.

It has been indicated previously that business related with wood pellet production would be likely to increase. As the industrial demands are growing for heating related materials such as this wood pellets, manufacturer and exporter business has increase in numbers. Main targets of wood pellet would the countries with winter season, such as Europe, America and Canada.

Price tag for Pellet

As an example, in the United Europe countries that is the main target for wood pellet market and has the widest pellet consumption experience in the world. A bulk cargo price for pellet in United Europe will be about more than $ 300 per ton. The logistic cost that includes storage and transport costs must be taken to consideration if one would like to be an exporter in wood pellet industry. For a United States exporter, the storage costs may add $ 10 per ton, and the transport costs may have additional cost of $ 35-45 per ton. The price survey done by proPellets Austria resulted in an average price of € 23.54 €-Cent per kg of wood pellets or 4.80 Cent per kWh.

You also would like to consider the delivery distance from supplier of raw materials, the bulk market, and the source of material to determine the price of your wood pellet. 

The Feedstock

different biomass pellets

Main raw material sources for the wood pellet feedstock would be: 

  1. Wood remains from wood manufacturing process, such as sawdust and wood chips, 
  2. Harvested but low quality wood, 
  3. Wood wastes or trashes.
  4. Grass
  5. Corn
  6. Biogas and other agriculture and forestry residues

















In Canada, wood pellets were made from wood logger or sawmill waste. This includes residues from sawmills such as wooden dust, wood shavings remains, little tree barks, dead trees that are infected by disease and insect and log wastes that have been left behind by sawmills in the woods after finished logging process. This also includes tree body parts that are not suited for any other applications. The wood pellet industries would turn this waste into economically profitable, environmentally friendly, future friendly, solid bio fuel.

In other countries like Austria it would not be so hard to find feedstock or raw materials to produce wood pellets. As Austria has one of the most richly forested country in Europe source of raw material would be very easy to find. The raw materials are renewable with government supervision.

The Capital Costs

The capital costs would be various in different regions around the globe. Deloitte research has a study resulting of capital costs for pellet plant in EU, are placed as follow:

Base capital cost: $125 for each ton

  • Labour cost: $10 for each ton (the price is subject to change depending on the capacity)
  • Energy cost: $10 for each ton
  • Maintenance cost: $5 for each ton
  • Repairs and lifecycle maintenance cost: $5 for each ton
  • Transportation for bulk shipments cost: $2.5 for each ton

Optional capital costs, this includes:

  • Grinding on site cost: $3-4 million (that will include grinder machine, log decking, goods handling and debarking machine).
  • Pellet warehousing, rail car loading facility cost: $2 million

ABC Machinery can also provide you turnkey solutions with other kinds of approach if the above capitals dos not suit your requirements.

best wood pellet plant

It has come to a conclusion that to overcome the consistently increasing demand for wood pellets would be a profitable business if you pay attention to details. If you want to start a wood pellet plant or factory and manufacture high grade pellets fuel that would compete well in global market by reducing the variable costs, capital input and cost of production, we are here to give you 3 additional tips that might as well assist your business swiftly;

  • No.1 Obtain the government and industry grant and permits
  • No.2 Build a team with experienced recruit and well managed them
  • No.3 Update your knowledge about the latest wood pellet technologies

As for lastly friendly advice, do take care of our natural resources by maintaining the safety of manufacturing process, raw material harvesting and waste control.