Europe’s Pellet Basket

The good news for Canadian wood pellet producers keeps on coming. From rosy predictions by industry analysts to announcements of new production coming online, the future of the industry looks bright indeed.

Wood pellet exports from North America to Europe were up by over 70% in the third quarter of 2012, year-over-year, according to one report, which also revealed that pellet exports from the two primary pellet-producing regions in North America, the U.S. South and British Columbia, continued to increase in the third quarter of 2012.

In the Maritimes, Viridis Energy announced its Scotia Atlantic Biomass plant will begin shipping to Europe this fall, with the 25,000-metric-tonne shipload expected to leave the Port of Halifax in September. The company says the plant has the capacity to produce up to 10,000 tonnes per month, so the plan is to send a shipload about every three months.

On the west coast, pellet pioneer Pinnacle is getting ready to open its Westview Terminal in Prince Rupert, B.C., around the same time. The $42-million facility will be able to accommodate Panamax class vessels up to 75,000 deadweight tonnes (DWT) with a loading rate of up to 2,000 tonnes per hour.

“Our goal over the next three to five years is to more than double the size of the company from our current capacity of 1.2 million tonnes,” Pinnacle president and COO Leroy Reitsma told Canadian Biomass in an exclusive interview (page 18).

Canadian pellet production will also get a boost as sawmills continue to ramp up to meet growing lumber demands in the U.S., with more low-cost sawmill residuals available.

The good news continues across the Atlantic to the U.K., where RWE recently received approval for plans to keep its Tilbury Power Station operating for another 12 years. After modifications are made, the plant will consume around 2.7 million tonnes of pellets, with an estimated 60% of that total coming from Canada.

The three major European pellet import countries remain the U.K., the Netherlands and Belgium.

Industry experts attribute the expected increase to the mandate set by the European Union in 2010 to hit a target of more than 20% renewable energy usage by 2020. Right now, most European countries are using less than 10%.

“Europe is basically leading the world in terms of the green and energy movements and that’s because they don’t have their own energy forms, like oil or natural gas. So they’ve been under a lot of pressure because they are so dependent on foreign oil,” industry analyst Gerry Van Leeuwen said in a recent Globe and Mail article (another boost to the industry) about the wood pellet industry in Canada.

As more facilities convert to co-firing as a way of reaching government targets, Canadian wood pellet producers will continue to smile and ask, “How much do you need?”

John Tenpenny, Editor
jtenpenny@annexweb.com