We were watching closely in early December as Canada’s provinces and territories signed on to the so-called pan-Canadian climate deal. The deal involves Canada going coal free by 2030, and requires all provinces and territories to implement some form of carbon pricing – a minimum of $10 a tonne – by 2018.
The $10 per tonne carbon price is in line with international standards. According to the World Bank’s State and Trends of Carbon Pricing 2016, three quarters of carbon prices globally are lower than US$10 per tonne. B.C. already collects a carbon tax of $23 per tonne, and, as of Jan. 1, Alberta is taxing $15 per tonne. Extending the minimum tax across the country will create a favourable environment for biomass producers to offer their solutions to reduce the volume of emissions created by other industries.
Both carbon pricing and the coal-free directive put wood pellet producers in a strong position. There is a case to be made for those remaining coal-fired power plants in Alberta, Saskatchewan, New Brunswick and Nova Scotia to phase-out the coal by co-firing. The Wood Pellet Association of Canada is hard at work convincing governments that co-firing would allow those power plants to remain operational with minimal conversion required.
As FutureMetrics’ William Strauss writes in a global pellet market outlook, the industrial wood pellet market is expected to grow significantly over the next several years with new markets opening up in Japan, Korea, and, as a result of the aforementioned policies, Canada. China remains a question mark, but even a nominal interest in wood pellets from the manufacturing behemoth would create massive demand on supply.
North America’s heating pellet market is also looking up as the price of crude oil gradually increases. If the trend continues as expected, wood pellets should soon be the lowest cost fuel to heat homes.
Across the country biomass producers are making steady progress. On the East Coast, Shaw Resources became the first Canadian pellet producer to receive Sustainable Biomass Partnership (SBP) certification (read that story), a growing international certification scheme for woody biomass used in industrial large-scale production. In Ontario an algal biorefinery at a cement plant is now in demonstration phase, and the same is true in Quebec for a biochar technology created by Airex Energy. Airex is poised to commercialize an array of biochar products from its torrefaction mill in Bécancour, Que. (read that story).
There’s a hopeful bioenergy, if you will, gripping Canada and it should lead us to many more exciting success stories over the year to come. Stay tuned.