North American pellet exports explode by 60%

The wood pellet export industry in North America has grown exponentially in a relatively short period of time. The export value has increased from an estimated $40 million in 2004 to almost $400 million in 2012. This fairly new trade development is the result of Europe’s quest to reduce its dependence on fossil fuels and to reduce CO2 emissions. Energy generation from renewable resources has,with varying pace, gone up in all countries in the EU the past decade.

Woody biomass, including wood pellets, is one energy source that has attracted both much attention and investments in a number of countries on the European continent. With limited domestic wood raw-material sources, countries such as the UK, Belgium and the Netherlands have increasingly relied on the importation of industrial wood pellets to reduce the use of coal at some of their power utilities. The relatively high costs for wood pellets in Europe have resulted in increased interest in importing pellets from British Columbia and the southern states of the US, where wood raw-material costs are lower than in Europe.

A record volume of 3.2 million tons of pellets was exported from North America to Europe in 2012, according to the North American Wood Fiber Review (www.woodprices.com), which compiles and publishes pellet trade volumes based on surveys of pellet exporters and customs data in North America and Europe, each quarter. From the US South, shipments were up over 100 per cent compared to 2011, while Canadian exports increased 25 per cent year-over-year.

The expansion of pellet production has been particularly noteworthy in the US South where there have been 14 pellet plants that are either new or planning to expand production in the coming year. Location and capacity of the new plants are reported in the latest issue of NAWFR.

This news brief is from the market report North American Wood Fiber Review (NAWFR), which has tracked wood fiber markets in the US and Canada for over 20 years. It is the only publication that includes prices for sawlogs, pulpwood, wood chips and biomass in North America. The 36-page quarterly report includes wood market updates for 15 regions on the continent in addition to the latest export statistics for sawlogs, wood pellets and wood chips.