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News 20.02.2023

Vítor Poças from AIMMP with an overview of the Portuguese pellet market

With our next interview, we will take you to Portugal to introduce you to the local ENplus® National Licenser. This time we have the pleasure to talk with Vítor Poças, president of the Association of Industries of Wood and Furniture of Portugal (AIMMP).

Dear Vítor, what should we know about AIMMP? When and why did the association become ENplus® National Licenser?

AIMMP – Portuguese Association of Wood and Furniture Industries, is a public utility organization, legally recognized as representative of the entire forest-based industry, except for the cellulose (CELPA) and cork industries (APCOR). Its foundation dates back to 1957.

According to the law and its statutes, AIMMP promotes and defends the rights, interests and development of its members. AIMMP represents the sector to both Portuguese and international organizations, private and public, in all matters related to the wood and furniture industries. In addition to representing and regulating the relations between its sub-sectors of activity, AIMMP also develops specific projects and activities and support services for members, namely in the areas of studies, human resources, legal assistance, quality management and certification, brand management, environment, energy, sustainability, training, export support and international promotion.

It is noteworthy that AIMMP is the founder of the CFPIMM - Centre for the Professional Training of the Wood and Furniture Industries, and is one of the founders of the Competitiveness and Technology Hub of Forestry Industries in Portugal.

In 2018, AIMMP enlarged its associative mass by incorporating ANPEB (national biomass energy producers association), which held the license of ENplus® for Portugal. And so, in 2018, AIMMP became the Portuguese national licensor.

Going further back, ENplus®  was introduced in Portugal in 2010, in response to the industry need for some regulation that would differentiate premium pellets. However, if in 2010 the market knew little about the trademark, today, ENplus®  is very well known.

This winter is a big challenge for the European pellet market. What is the situation on the Portuguese pellet market?

Even with a mild winter, when compared to previous ones, the Portuguese market is experiencing an increase in pellet prices. Initially, there was low availability of pellets. Warehouses that would always have pellets available, this year didn’t.

The price nearly doubled (but energy prices for some industrial consumers more than tripled...). A bag of pellets reached 10 euros for the consumer, but as a result of the AIMMP efforts to influence the Government and the OCS, the VAT for the new year was reduced from 23% to 6%, and pellets are now more affordable.

In 2022, the word “pellets” was often heard, at times with a negative connotation which was not always fair.

Do you expect more households to begin using pellets in the years to come?

When you choose your energy source, it should be available, safe, affordable and comfortable.

The domestic consumption of pellets is growing in Portugal, but slowly. Being technologically mature, using pellets is safe but their market availability negatively affected their reputation this heating season.

This might be an obstacle for the market development. Yet, in my opinion, the electricity market will increase its operational costs in the future. On the other hand the instability this year was due to the Ukrainian war and consequent energy crisis, and can be interpreted as a temporary situation. Buying pellets in advance can ensure each family’s security of supply, which may be the lesson to learn from this year’s experience.

For the Portuguese society, price is a very important aspect when choosing the heating solution. Price increase impacted the public opinion, especially at the beginning of the winter season, but even expensive pellets didn’t force people to migrate to other solutions, at least not yet. Actually, in the long run, there isn’t a cheaper option if you have to invest in new equipment.

The impact of the pellet price increase is felt stronger in the appliances sector, as people are delaying their investments or choosing other options (mainly searching for flexibility of supply).

Nonetheless, we believe this heating season won’t determine the future for the pellet appliances.

Pellets’ advantages will still be recognizable and people will still opt for them. There is an emerging European market stability trend, promoting affordability. At this moment, it is only mildly impacting Portugal, but all of us expect prices to decrease.

What role does ENplus®  play in your market? How important is it for the pellet producers and traders to be certified?

We would say ENplus®  certification is extremely important for the consumers and producers, which is a good reason for our permanent efforts to promote this certification system. Even though Altina Ribeiro (our pellet specialist) clarified to all operators that ENplus®  is not mandatory, the ENplus®  system practice almost has a regulatory effect.

We know that some non-certified pellets disclose their pellets characteristics to the market, allowing for  a comparison with the standard, but without the check-up of the certification, there’s no guarantee.

For the producers the importance of the ENplus®  certification is obvious and justified. This fact is also backed up by the interest in the certification from pellet traders. We understand very well the added value of the trademark.

Unfortunately, we don’t have numbers of non-certified pellets, nor do we control border movements to assess the percentage of non-ENplus®  certified pellets. My belief is that, until 2022, the use of non-certified pellets in the domestic users market was insignificant. Probably, 2022 will be an exception.

We assume that due the low availability more non-certified pellets were (legally) used, but normally non-certified pellets would be constricted to the industrial use. The industrial market also uses ENplus® pellets, and some even use bagged pellets, but we don’t have yet data on that for 2022. In 2021, the ENplus® certified pellets for industrial use (sold from Portuguese companies) accounts for 5%.