The EU countries’ desired phase-out of gas and oil heating systems sent biomass boiler sales through the roof from 2019 to 2022, with average annual growth of 36% in Germany, Austria, Switzerland, France and Italy. But the boom appears to be over as 2023 begins, according to a study by Interconnection Consulting.

This year, the market for biomass heating boilers is expected to decline 19% in the markets studied. The rise in pellet prices made pellet biomass boilers, which account for nearly two-thirds of the market, unattractive to many. In this segment, therefore, the decline will be as much as 24.7%. In addition to the sharp rise in pellet prices, discussions in Europe about the climate friendliness of pellet biomass boilers also contributed to the decline in demand. “Finally, the active promotion of heat pumps in the States also leads to a decline in the biomass boiler segment,” as Yuliia Hrebenkova, the author of the study explains.

Replacement Is Most Important Purchase Motive

After the pellet biomass boilers, which are mainly used for low required heating capacity (between 20 and 400 kilowatts), wood biomass boilers are designed for larger heating capacity of up to 3 megawatts. Due to the higher prices, these account for around 34% of the shares in value, of the entire biomass boiler market. Especially in the segment of boilers with low heating capacity, sales are strongly dependent on the price of the fuel, explains Hrebenkova. “When wood in Austria fell in price by 25%, sales of such boilers increased by 12.4%.” Nine out of ten biomass boilers are sold due to the replacement of old heating systems. This segment continues to ensure the growth of the industry. From 2023 to 2026, sales of biomass boilers are expected to increase by an annual average of 3.9% in the countries studied.

Germany Far Ahead

Within the five countries in the study, Germany is by far the largest sales market with a share of 57.2%. Between 2020 and 2022, Germany experienced a boom in demand for biomass boilers. During these years, sales increased by an average of 57.4% per year. The government played a major role in boosting demand with attractive subsidies. In comparison, France only has a share of 16.5%. There, more use is made of electric heat pumps for replacement. Between 2020 and 2022, the country recorded an increase of only 12.5% per year. In Italy, too, biomass boilers only enjoy a niche existence. There, 80% of energy consumption is still met by fossil fuels. In 2022, only 9606 biomass boilers were sold in Italy, which meant a decrease of 17.9%. The Austrian market developed with 30% growth per year between 2020 and 2022, while the Swiss biomass boiler market performed a bit weaker with a growth of 16.5 p.a.. The top 5 suppliers generate a market share of 41.7% in value and 38.1% in volume in the five countries studied.

18/09/2023

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting.