July 31, 2012, Mashantucket CT - The outlook for wood pellet exports to the European Union is bright, according to Canada’s leading industry association.
In a presentation at the annual PFI Conference, Gordon Murray, executive director of the Wood Pellet Association of Canada, said there is the potential for the market to grow by 300% by 2020.
Murray noted that if just 15% of coal was replaced, it would mean a market of 200 million tonnes of wood pellets annually. This growth could come he said from the fact that only five of 27 member states are currently co-firing.
The main markets in Europe for North American pellets remain the UK, along with Belgium and the Netherlands. Future growth outside of Europe will come from Asia, particularly Japan, which has recently introduced a generous feed-in tariff for renewable electricity generation.
Despite recent hype about the South Korean market, Murray told the audience that he’s not sure when it will open up, although he was optimistic that four million tonnes of wood pellets could be exported by 2020.
Interestingly, Murray noted that for the first time the U.S. has surpassed Canada in the export of pellets to Europe, according to data from the first six months of 2012.
Prices for wood pellets are currently higher in the U.S. than in Canada, said Murray, most likely due to higher shipping costs in this country.
Murray also updated attendees on the status of the Tilbury plant in UK, which suffered a devastating fire earlier this year, affecting the export market, since it was expected to have used 2.5 million tonnes over the last 18 months. Murray said the plant will hopefully be back on line in August.
There are challenges ahead, particularly recent efforts to discredit biomass as being dirtier than coal.
“The wood pellet industry exists because bioenergy is carbon neutral,” said Murray and “regardless of facts, if society comes to disbelieve that, then our industry will be in grave jeopardy.
“We need to counter misinformation and support positive information campaigns.”
Murray said WPAC is working on a project to research biomass emissions that will be scientifically peer reviewed and should be released later this year. Carbon Debt Project participants include WPAC, USPIA, European Pellet Association, the Danish Energy Association, along with Drax, Electrabel, RWE, EON and Vattenfull.