Impact of wood pellets export on the development of their production in Serbia with the effects of substituting enegry from fossil fuels and reduction of carbon dioxide emission

Abstract

: Abstract: The paper presents the results of researching the impact of export on the production of wood pellets as well as the situation on the market for this wood fuel in Serbia. Objective of the research was to produce scientifically and professionally founded conclusions and the related adequate recommendations to the decision makers in order to improve the situation on wood pellets market in Serbia and eliminate the existing problems which sig nificantly burden and slow down this development. Special objective of the research was to observe the contributions of wood pellets to the mitigation of climate changes using Serbia as the example. Results of the conducted research show that the expansion of the consumption (demand) increase in the European Union countries in the last fifteen years and the related increase of export from Serbia are the most significant factors which have influenced the de velopment of wood pellets production in Serbia. Parameters of econometric model of the impact of export on the increase of production show that production increase of 1.17% can be expected with the increase of export of 1%. Thus, the number of wood pellet producers has rapidly increased in the last ten years, from 2 producers in 2006 to 52 active producers in 2016. Increase of the number of producers was also accompanied by the increase of the installed capacities. At the end of 2015, total installed capacities for wood pellet production in Serbia reached 550 thousand tons, and the realized production was 229 thousand tons, or 41.6% of the installed capacity. Consumption of wood pellets in Serbia in the last four years achieved significant increase and reached the level of 89 thousand tons in 2015. However, concerning the segment of wood pellets consumption in Serbia, the situation is still unsatisfactory despite the fact that the consumption has been increasing year after year. Average price of 1 kWh of energy from wood pellets exported from Serbia was in the range 20-44 ¢$, which is 2.1 to 3.2 times less than the price of 1 kWh of energy from the natural gas which was imported in Serbia in the observed period.