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Op-ed: Feds abandon global wood pellet marketplace amid energy crisis

Seventy per cent of funding evaporates for Canada’s wood pellet sector while support for fossil fuels soars, leaving critical programming in peril.

April 28, 2022  By Gordon Murray


Federal Natural Resources Minister Jonathan Wilkinson has pledged to increase Canadian oil exports by up to 300,000 barrels per day while cutting support for clean, renewable, low-carbon wood pellet exports. Wood pellet shortages caused by the Russian invasion of Ukraine are now causing Europe's electricity generators to switch back to coal and heavy fuel oil. Photo: ssuaphoto/iStock/Getty Images Plus.

The Canadian government has turned its back on wood biomass after a decade of funding in which the Wood Pellet Association of Canada (WPAC) generated $211 for every taxpayer dollar spent to displace fossil fuels with responsible, renewable clean energy in the form of wood pellets. Without any warning, the federal government has eliminated all funding to our sector.

Since 2012, WPAC has received nearly $1.6 million in public funding and in return our members have generated $335 million in new sales which they have invested in new plants, technology and people. In turn, this funding has enabled us to grow our markets by a whopping 260 per cent.

While these sales figures may sound significant, the pellet sector is a low-margin producer compared to the rest of the forest sector which generated about $12.6 billion GDP in 2020.The bulk of our membership is made up of small, privately- or family-owned businesses with larger producers providing access to both domestic and global markets.

The Natural Resources Canada funding of $500,000 is critical to our sector – providing 70 per cent of our budget to grow markets, conduct research and invest in safety and sustainability initiatives. The same federal government program that pulled WPAC’s funding also funds the sawmill industry. The irony of the situation is not lost on pellet producers: without markets, the pellet sector doesn’t exist; without the pellet sector, sawmills have limited and declining options for residuals and harvest residuals are left to go up in smoke in the forest.

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Our sector also has a significant role to play in the growing bioeconomy as well as alleviating energy poverty in places like Canada’s Maritimes and remote Indigenous communities.

Let’s face it; the world is in an energy crisis. Despite the Minister of Natural Resources Jonathan Wilkinson’s mandate to “grow the market for clean fuels,” he has instead launched a plan to expand oil and natural gas exports. The plan includes approving a $12-billion oil project.

Our industry is seeing record demand for wood pellets – Canada is the second largest producer of wood biomass in the world. Yet now our government has sent a strong message to international customers: it places a higher value on oil and natural gas than it does on the pellet sector. The fact is, there is room for all Canadian sectors to contribute to the energy needs right now; but only wood biomass is renewable.

Minister Wilkinson recently said, “Our European friends and allies need Canada and others to step up… they need our help in getting off Russian oil and gas in the short term, while speeding up the energy transition across the continent.” We couldn’t agree more; the UK and Europe happen to be our largest market – so what happened to pellets?

I can only surmise that the federal government feels that renewable, Canadian wood biomass from forest and sawmill residuals is better left to be burned into the atmosphere than to be produced into pellets and contribute to global efforts to tackle climate change.

Canadian wood pellet producers couldn’t disagree more. We believe in what we are doing. The global and domestic marketplaces support us and we won’t be swayed by our mission to supply the world with responsible and renewable clean energy while employing hard-working Canadians, keeping our forests healthy and our local airsheds clear.

If you want more information or would like to know how you can support the Canadian pellet sector, please email me at gord@pellet.org.

Gordon Murray is the executive director of the Wood Pellet Association of Canada.


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