WORLD MARKETS
North American wood pellet capacity to increase on EU,
Asian demand European demand for wood pellets has to a large extent, driven the expansion of pellet capacity in both the US and Canada the past five years. The North American Wood Fiber Review reports that in coming years, it is likely that demand for pellets will increase not only in Europe, but also in Asia and North America, which will generate new opportunities for pellet producers, particularly in Western Canada and Eastern US
A
number of new wood pellet plants in the US and Canada are set to
commence operations in the back half of this year, with even more plants planned in the coming years. With the additional capacity coming on line, the industry is eyeing the growing demand in four regions – Europe, Asia, and to a lesser extent the Maritime Provinces of Eastern Canada and Northeastern US. Europe has, by far, been the
largest export market for North American pellet producers for a number of years, shipping nearly 1.5 Mt in 2010, as reported in the North American Wood Fiber Review. The most significant potential for increased wood pellet utilisation, both short and long term, will continue to be in this region, as the European Union’s 27 member countries have a goal of sourcing 20% of the Union’s total energy needs with renewable sources by 2020. In 2008, biomass used in the EU provided 80 Mt of oil equivalents (Mtoe), and the European Commission estimates that this consumption may increase to 140 Mtoe by 2020. In addition, Germany’s recently declared goal to totally eliminate its nuclear power industry by 2022 will increase the country’s demand for renewable energy, including woody biomass in the future. Other countries, including Italy, Finland, Poland and Switzerland are starting to question the viability of nuclear power as a future source of energy. Asian demand for biomass
energy is finally beginning to emerge, and shows signs of significant potential growth. South Korea has recently announced
International Forest Industries | AUGUST/SEPTEMBER 2011 9
policies to increase the portion of energy consumption from renewable sources, including woody biomass. The country’s new Renewable Portfolio Standard calls for reducing greenhouse gases by 30% by 2020, while concurrently increasing its use of wood pellets to 5 Mt in 10 years. Japan’s confidence in nuclear power has continued to plummet since the Fukushima nuclear plant crisis in early 2011, which will
likely result in an increase in woody biomass usage as a portion of a larger renewable energy portfolio in the next few years. The growing European and Asian demand for wood bioenergy is being answered by a number of US and Canadian companies already engaged in or moving towards an expanding export market. Besides British Columbia, which has been the major supplier of pellets to Europe, the US South
has recently witnessed the opening of a few large pellet plants with plans to ship a majority of their production to European consumers. There is much uncertainty
regarding future energy policies worldwide but one thing is undeniable – pellet demand in Europe, Asia and perhaps also in the US will be experiencing dramatic growth over the next five years.
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