# Biomass combustion and CHP: Correlation Prices it moves with, and why Source page: https://www.materialinsights.org/energy/e_bio_combustion/correlation/ Biomass combustion and CHP plants burn wood, residues and pellets for heat and power. Costs are mainly boilers, fuel handling and the fuel itself, and economics depend on subsidies, carbon prices and the coal or gas they replace. Proxy **US PPI: power boilers and heat exchangers** index (BLS base period =100) · monthly, Jan 2006 to Sep 2026 There is no free public price for Biomass combustion and CHP itself, so this tab uses the closest public series as a stand-in. Read the numbers as an indication, not as the price of this exact item. #### What its price moves with Selected link ##### Biomass combustion and CHP and Biomass Monthly changes 0.14 little or none correlation 12-month changes 0.48 moderate correlation Last 5 years 0.13 monthly changes Lead or lag +3 mo Biomass tends to lead by 3 months (r 0.33) Price function, Dec 2011 to Sep 2026 Biomass combustion and CHP ≈ 0.0748 × (Biomass)^1.72 R² 0.88 On this fit, a 10% higher biomass price goes with a 17.8% higher Biomass combustion and CHP price over the long run. Units: index (BLS base period =100) and index (BLS base period =100). Chart: Biomass combustion and CHP and Biomass prices rebased to 100 at Dec 2011, log scale Both prices rebased to 100 at Dec 2011, on a log scale so equal percentage moves look the same size. Chart: Biomass combustion and CHP price against Biomass price, monthly, log scales, with fitted line Each dot is one month; paler dots are older (2011), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic. Energy [Bm Biomass](https://www.materialinsights.org/energy/e_biomass/)Fuel 0.14 Wood chips, residues and pellets are the fuel, and fuel cost is the largest running cost. The proxy, a US boiler index, and the wood chip index move together over a year, with 12-month changes correlating at 0.48 and chips leading by about 3 months. little or none co-movement month to month · 178 months Show charts Commodity [St Steel](https://www.materialinsights.org/commodities/steel/)Main input 0.32 Boilers, furnaces and heat exchangers are steel. The US boiler index follows steel moderately, with monthly moves correlating at 0.32 and yearly moves at 0.45. Steel prices thus feed directly into new boiler prices. weak co-movement month to month · 249 months Show charts Energy [HX Heat exchangers and pinch integration](https://www.materialinsights.org/energy/e_heat_exchangers/)Shared industry 0.79 Boilers and heat exchangers are made by overlapping US firms from the same steel, so their indices track each other closely: monthly moves correlate at 0.79 and yearly moves at 0.90. strong co-movement month to month · 249 months Show charts Energy [Tc Thermal coal](https://www.materialinsights.org/energy/thermal_coal/)Rival fuel 0.11 Biomass is co-fired with or replaces coal in boilers, so coal prices decide the fuel saving. The boiler index and coal price show little monthly link but a moderate yearly one, with 12-month changes correlating at 0.41. little or none co-movement month to month · 249 months Show charts Energy [Gas Natural gas](https://www.materialinsights.org/energy/natural_gas/)Rival fuel 0.02 Gas boilers and CHP compete with biomass plants for industrial heat. The boiler index and gas price show a link only over a year, with 12-month changes correlating at 0.50. little or none co-movement month to month · 249 months Show charts Commodity [Tm Timber](https://www.materialinsights.org/commodities/lumber/)Fuel source −0.03 Sawmill residues are a major fuel source, so timber output sets fuel supply. The Malaysian sawnwood price and US boiler index show no monthly link, correlating at -0.03. Different regional markets explain the missing link. little or none co-movement month to month · 249 months Show charts How to read these numbers **Correlation of monthly changes** (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak. **12-month changes** compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs. **Price function** is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)^β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation. **Lead or lag** checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months. Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link. Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site. ## Other sections - [Summary](https://www.materialinsights.org/energy/e_bio_combustion/index.md) - [Overview](https://www.materialinsights.org/energy/e_bio_combustion/overview/index.md) - [Efficiency](https://www.materialinsights.org/energy/e_bio_combustion/efficiency/index.md) - [Techniques](https://www.materialinsights.org/energy/e_bio_combustion/techniques/index.md) - [Resources and labour](https://www.materialinsights.org/energy/e_bio_combustion/resources/index.md) - [Impact on the biosphere](https://www.materialinsights.org/energy/e_bio_combustion/biosphere/index.md) - [Relationships](https://www.materialinsights.org/energy/e_bio_combustion/links/index.md)