(Montel) There is mounting evidence that Russian wood pellet exporters could be circumnavigating an EU-wide embargo on biomass imports from the country by exporting via Turkey, a Montel investigation has revealed.
“Deliveries to Turkey from Russia only began in July 2022 but by the end of the year they reached a total volume of 200,000 tonnes,” said Igor Novoselov, consultant with Moscow-based forest industry analytics agency WhatWood.
“It is difficult to say whether Turkey consumes all the pellets domestically but we see that Turkey greatly increased exports last year to European countries,” he added.
Turkish export surge
Indeed, according to latest Eurostat data, Turkish exports to EU countries surged eight-fold in January-October to more than 82,000 tonnes, with exports to Italy more than trebling to 5,800 tonnes and minor but incremental shipments for the first time to Denmark, Germany and the Czech Republic – all beginning in the second half of the year.
Turkish Statistical Agency figures were considerably more modest than the WhatWood data, showing the country imported a total of 64,000 tonnes of wood pellets in January-November 2022, of which almost all was from Russia and Belarus.
Yet this compared with a total of just 37 tonnes from all origins over the same period of 2021.
The Turkish data also showed exports to all destinations totaling 126,000 tonnes over the 11-month period last year, compared with just 22,500 tonnes in January-November 2021. Of this, 87,000 tonnes were exported to EU countries and the UK from July – when the ban began to kick in – to November, compared with just over 13,000 tonnes in the equivalent period in 2021.
A Ukraine-based fuels trader, with close links to the Turkish biomass market and who asked to remain anonymous, said it was possible to repackage imported volumes for export as Turkish product.
“You can easily get a local certification of origin, [although] it involves certain costs,” he said, adding there had so far been “no objection” to the practice from the Turkish authorities.
Indeed, an official with Turkey's Union of Chambers and Commodity Exchanges said imported wood pellets could legally be given Turkish certification of origin, if they were “processed” in the country, which can include simply repackaging.
“If pellets are imported from Russia as a ‘raw material’, then processed in Turkey, they can obtain a Turkish certificate of origin,” the official said, on condition of anonymity.
This was at odds with EU import rules, said Andre Lenz, of Germany’s Central Customs Authority.
“According to EU sanctions, the import of wood and wood products – including wood pellets – into the EU is prohibited,” he said, adding the ban applied not only to imports directly from Russia but also via other countries, “if the goods have an origin” there.
“Intentional infringements of the aforesaid import ban are punishable in Germany,” he said.
“The public prosecutor's office is responsible for deciding whether to initiate criminal investigations [in such cases].”
And sources at the port of Rotterdam – Europe’s largest import hub – were unanimous in dispelling the idea that the relabelling of products would be acceptable.
“If these pellets are sold as Turkish material, it’s an illegal way to avoid the ban on Russian biomass,” said Hugo Du Mez, dry bulk adviser at the Port of Rotterdam, while a source at a Rotterdam dry bulk terminal said vessels would not be accepted if there was any indication the original origin of the product was Russia.
Yet a spokesperson for the Italian Agroforestry Energy Association said there was a risk that Russia-origin pellets could still be re-exported to the EU.
“Several non-European countries have not adopted sanctions against Russia and Belarus and therefore could continue to import timber and pellets from these countries for domestic consumption, further processing or re-export,” they said.
“The certification of pellets produced with wood of Russian origin in third countries is technically possible and legal but its import to the EU remains illegal.”
But the spokesperson – who spoke on condition of anonymity – said there were still concerns Russian pellets could enter the Italian – and wider EU – market by ship or by land, through “triangulations” with third countries.
And the Ukraine-based trader said such repackaged – and dubiously recertified – material was likely to have been arriving in Europe.
“[EU authorities] should have imposed stricter controls – on paper, it all looks legal,” he said.
Russian pellets were potentially either being shipped by sea to Turkey from Black Sea ports or by truck via Georgia, he added.
Traders close to Russian and Turkish markets gave the names of companies possibly involved in the supply chain, though the latter were not available to comment when contacted by Montel.
At least one Russian pellet producer was “rumoured” to be exporting around 15,000 tonnes/month, with buyers in Turkey and Uzbekistan taking delivery of the material in Turkey, as well as Egypt, said a Scandinavian biomass trader.
“If uncertified pellets and certified pellets enter a warehouse, perhaps the uncertified pellets can be rebranded as certified,” he said, adding, however, there was no clear evidence this was happening.
Montel reported last month that the sharp jump in Turkish wood pellet exports had raised market concerns about origin.