BERLIN (Fortune) -- Not far from Berlin’s Tempelhof airport, Peter Engelke is putting up a new security gate at his warehouse because of concerns about desperate people pilfering his stock. The precious asset at risk is firewood.
Engelke’s actions reflect growing anxiety across Europe as the continent braces for energy shortfalls, and possibly blackouts, this winter. The apparent sabotage of the Nord Stream gas pipeline is the latest sign of the region’s critical position as Russia slashes supplies in the standoff over the war in Ukraine.
At a summit in Prague on Friday, European Union leaders fell short of agreeing on a price cap for gas amid concerns that any such move could threaten supplies to the region. As much as 70% of European heating comes from natural gas and electricity, and with Russian deliveries drastically reduced, wood — already used by some 40 million people for heating — has become a sought-after commodity.
Prices for wood pellets have nearly doubled to 600 euros a ton in France, and there are signs of panic buying of the world’s most basic fuel. Hungary even went so far as to ban exports of pellets, and Romania capped firewood prices for six months. Meanwhile, wood stoves can now take months to deliver.
How Bad Is Europe’s Energy Crisis?
Aside from concerns about shortages, the energy crisis is intensifying a surge in living expenses, with eurozone inflation hitting double digits for the first time ever in September. Strapped households across the region are increasingly faced with choosing between heating and other essentials.
“It’s back to the old days when people wouldn’t have the whole house heated,” said Nic Snell, managing director at British wholesale firewood retailer Certainly Wood. “They’d sit around the fire and use the heat from the stove or open fire and go off to bed. There will be a lot more of that this winter.”
The trend has meant a boom in demand for Gabriel Kakelugnar AB, a manufacturer of high-end tiled stoves costing an average of 86,000 Swedish kronor ($7,700). The stoves can keep a room warm for 24 hours because of its intricate construction using different channels that hold and distribute the heat.
“During the pandemic, people started to invest more in their homes. That has now of course escalated,” said Jesper Svensson, owner and managing director of the company that’s located less than an hour drive from Sweden’s biggest nuclear reactor.
Orders have surged more than fourfold, and customers now have to wait until March for delivery, compared with as little as four weeks a year ago.