Under the terms of the contract, Pinnacle will supply 70,000 metric tons per annum of industrial wood pellets to Ube beginning in late 2019.
"Japan has made a strong commitment to decarbonization, and biomass is poised to become an increasingly important part of the country's energy mix," said Robert McCurdy, chief executive officer of Pinnacle. "One third of our $421 million in contracted backlog in 2017 was with customers in Japan, and this new contract with Ube further builds on our strong sales momentum in this growing market."
Demand for industrial wood pellets in Japan is accelerating, supported by the government's Feed-in Tariff system. There are more than 10 new biomass projects currently in late-stage development in Japan.
According to Hawkins Wright, a leading provider of market intelligence and analytical services to the international pulp, paper and biomass industries, the Japanese market represented 3 per cent of global demand for industrial wood pellets in 2016 and forecasts this market to increase to approximately 10 per cent of global demand in 2021 and 17 per cent in 2026.