Pallets that can no longer be repaired are a large, fairly clean stream of waste wood. They are sorted, stripped of metal, and chipped for particleboard, bedding, mulch or fuel, depending on how contaminated the wood is. In Germany the decisive rule is the waste wood ordinance (AltholzV), which sorts used wood into four categories, A I to A IV, that determine where it may go.
Why pallet wood is a valuable waste stream
Pallets are mostly solid softwood or hardwood that is dry, unpainted and usually free of preservatives. Compared with demolition timber or railway sleepers, that makes them a relatively homogeneous and low-risk raw material. Pallet wood is collected in volume at warehouses, retail distribution centers and pallet repair yards, so it arrives in predictable batches.
The main obstacles are metal and contamination. Nails, staples, brackets and strapping remain in the wood, and pallets that have carried chemicals, been stored outdoors in contaminated areas or been treated with preservatives need a stricter route. Sorting and metal separation therefore sit at the start of every recovery chain.
Waste wood categories in Germany
AltholzV, the German ordinance on waste wood, entered into force in 2002 and is the best-known classification system. It assigns used wood to categories according to contamination:
| Category | Definition (paraphrased) | Typical recovery |
|---|---|---|
| A I | Natural or only mechanically processed wood, with at most insignificant contamination from use | Material recycling (particleboard), energy |
| A II | Glued, painted, coated or lacquered wood without halogenated organic compounds in the coating and without wood preservatives | Material recycling, energy |
| A III | Wood with halogenated organic compounds in the coating (for example PVC) and without wood preservatives | Energy recovery in suitable plants |
| A IV | Wood treated with preservatives, such as railway sleepers or utility poles, and other heavily contaminated wood | Energy recovery in plants with specific emission controls |
A separate regime exists for wood contaminated with PCBs. According to the annex of the ordinance that lists typical waste wood items, solid-wood pallets such as Euro pallets and industrial pallets fall in category A I, pallets made of wood-based materials are classified lower down the scale, and pallets built from composite materials are placed in a higher-contamination category. Local waste authorities publish acceptance conditions that apply the same logic. These categories are a German system, though other countries use similar contamination-based sorting.
Material uses
Particleboard and fiberboard. Clean wood chips are a classic raw material for particleboard. German guidance names categories A I and A II as suitable for chipboard production. Producers screen incoming chips for metals, plastic and other foreign matter, and set contamination limits for the wood they accept.
New pallet components. Boards from dismantled pallets can be reused for repair or for new pallets, and some blocks are made from pressed chips; see chipwood block presses and pallet dismantling machines.
Mulch and soil cover. Shredded wood can be used as garden or landscaping mulch. Only untreated, uncontaminated wood should go this way. Colored or dyed mulch may contain additives, so the source wood and process matter. Pallets marked with the methyl bromide code are generally avoided for this use; see methyl bromide treatment.
Animal bedding. Fine shavings and chips are used as bedding in stables and poultry houses, again only from clean, untreated wood with dust and metal removed. Quality and veterinary rules vary by country and by livestock type.
Pellets and briquettes. Wood pellets for household heating are normally made from sawmill residues and virgin wood, because their quality standards limit chemicals, ash and contaminants. Recycled pallet wood is more commonly burned as chips in industrial boilers than pressed into premium pellets, although some producers make industrial-grade pellets from cleaned recycled wood.
Energy recovery
Waste wood that cannot go into products is burned in biomass boilers and combined heat and power plants. Dry wood has a calorific value of roughly 18 to 19 MJ/kg, so shredded pallet wood is a useful substitute for fossil fuel in the right plant. Moisture content strongly affects the usable heat, which is why storage conditions matter; see wood moisture content.
Emission rules depend on the category. Plants that burn the more contaminated categories need flue gas cleaning designed for chlorine, heavy metals and similar compounds, so categories A III and A IV are directed to specially permitted installations.
Processing: from pallet to chip
A typical recovery line has five steps:
- Collection and presorting by contamination and size, removing plastic pallets and obviously treated wood.
- Primary shredding in a slow-speed shredder or a hammer mill; see wood grinders and shredders.
- Metal separation, usually by overband magnets and sometimes eddy-current separators for non-ferrous metals.
- Screening into size fractions, with oversize returned to the shredder and fines sent to energy use.
- Quality sampling to document category and contamination before sale.
Magnets handle ferrous nails well, but nails embedded deep in wood can survive primary shredding and damage downstream equipment, so many processors use more than one stage of separation.
Environmental view
Burning wood at end of life returns the carbon it absorbed while growing, and cascading use, meaning material use first and energy later, is a recognized principle in EU waste policy. For the wider picture of reuse before recovery, see pallets and the circular economy and the pallet recycling process.
Frequently asked questions
Can pallet wood be burned in a home stove?
Clean, untreated pallet wood is often burned in practice, but nails and any chemical contamination are risks, and local rules on burning waste wood differ. Treated or painted wood should never be burned in domestic appliances.
What is Altholz category A I?
It is natural or only mechanically processed used wood with no significant contamination from use. Solid-wood pallets such as Euro pallets are typically listed in this category in German practice.
Can recycled pallets be turned into wood pellets?
Technically yes, but standard premium heating pellets are made from virgin wood and clean sawmill residues. Recycled pallet wood is mostly used as chips in industrial boilers or in particleboard.
Why are nails a problem for recycling?
Metal damages shredders, screens and board presses, and contaminates the product. Processors remove it with magnets and other separators before and after chipping.
Sources
- Altholz (waste wood) information sheet — Bavarian State Office for the Environment
- Annex 3 AltholzV: assignment of common waste wood assortments — anwalt24.de
- Recovery, reuse and recycling by the United States wood packaging industry: 1993-2006 — USDA Forest Service
- Merkblatt Altholz 2025 — Abfallwirtschaftsbetrieb Landkreis Uelzen