Analysis of the price relationship between coal and wood chip for the Czech Republic

The article deals with the relation of coal prices to the contractual prices of wood chips within the Czech Republic. Over the last decade, the issue of the wood and coal market has become an important area of interest for producers and consumers. The increasing consumption of wood fuels has opened new research opportunities in the energy market and the declining growth of fossil fuels based on new environmental policies. The origin of the wood chips and its quality parameters are decisive for the market price of wood chips. For elemental analysis, spruce wood samples from three sources are analyzed: white, green, and brown chips, which together form a mixture with an average calorific value of 8 GJ center dot t-1. The Granger causality method and OLS regression for the long-term price relationship are used. Empirical results show that the price relationship between the monitored commodities is not balanced in the long term. Based on the regression analysis, there is no statistically significant relationship between the observed prices. A causal relationship in both directions was also not proven here. There is an independent relation- ship between both coal and wood chips price due to economic and environmental causalities.