Canada and Japan growing industrial pellet markets
November 29, 2016
By FutureMetrics
Nov. 28, 2016 - The potential United States co-firing market that the Clean Power Plan would have supported will have to wait at least four years. But other nations will be following in the EU and UK footsteps with power plant modifications for co-firing wood pellets with coal or full-firing of wood pellets.
Canada has a federal carbon tax and the federal government has declared that coal fuelled power generation will cease by 2030 (The case for Alberta). FutureMetrics has updated its “Wood Pellets in Coal Fired Power Plants” dashboard, available to download on its website, to include an avoided carbon tax calculation that will be applicable to the Canadian markets.
Japan has three policy drivers that will grow the Japanese market for industrial wood pellets. FutureMetrics’ William Strauss gave a presentation on this subject at the US Industrial Pellet Association (USIPA) conference.
The industrial pellet market continues to be oversupplied. The chart above shows the price history of industrial wood pellets after delivery to Rotterdam. New demand from two plants in the UK and one in Belgium coming online in the next 12-24 months will soak up the excess supply. But future growth in industrial pellet demand in Canada, Japan, and other countries such as Australia and China will drive the construction of significant new pellet production capacity.
White papers and dashboards can be freely downloaded from the FutureMetrics website: www.FutureMetrics.com
FutureMetrics provides information, market analysis, operations guidance, and strategic advice to many of the world’s leading companies in the wood pellet sector.
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