U.S. South could be biomass breadbasket
July 13, 2010
By Hakan Ekstrom | Wood Resources International
July 13, 2010, Seattle, WA – Demand for woody biomass, in the form of wood chips, wood pellets, and torrefied pellets, will increase substantially in Europe over the next 10 years.
July 13, 2010, Seattle, WA – Demand for woody biomass, in the form of wood chips, wood
pellets, and torrefied pellets, will increase substantially in Europe over the
next 10 years. Exactly how much, though, is unclear because the size of the
increase will depend on policies and subsidies implemented by governments in
individual countries within the European Union. The cost of locally sourced
biomass on the continent has increased for many energy plants, resulting in
increased interest in importing wood chips and pellets from neighboring
countries or overseas.
The U.S. South is at the top of the list as a long-term biomass supply source for a
number of energy companies. This is because the region has a stable supply of
pulpwood, a well functioning infrastructure, and competitive wood fibre costs,
as compared to most other markets in the world. According to the Wood Resource
Quarterly, only Chile and the Western United States had lower softwood pulpwood
prices than the U.S. South during the first quarter of 2010. Hardwood wood
fibre prices were well below the global average hardwood price index.
One region in the U.S. South that has drawn much attention is the tri-state area of
southern Georgia, southeast Alabama, and northern Florida, a wood fibre hotspot
that is profiled in the latest issue of the North American Wood Fiber Review.
Within this area, a significant number of new wood-to-energy facilities have
been announced, with one major pellet plant already operating. Sited in
northern Florida, Green Circle Bioenergy began operations in early 2008 and is
exporting the entire production to energy plants in Europe.
Two additional large-scale, export-oriented pellet plants are on the drawing board.
The German company RWE’s plant in southern Georgia is under construction, with
plans to commence production in the third quarter of 2011. Magnolia Biopower
has announced plans for its own pellet export plant, also to be sited in
This expanding renewable energy sector is situated within a stronghold of the
traditional southern pulp industry, with seven pulp mills within this
southeastern sub-region. The high concentration of wood fibre consumers within
a fairly limited area has pushed wood costs higher in the past few years. Pine
stumpage prices have increased faster in this region than the average price
across the southern United States. In the second quarter of 2010, prices were
more than 50% higher than two years ago. With the expected increase in wood
consumption by the energy sector in this sub-region, it is likely that pulpwood
costs will continue to be higher in this sub-region than the average for the
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