European Pellet Conference concludes in Wels, Austria
The European Pellet Conference concluded on Feb. 28 with a country-by-country market update. The session was chaired by Gordon Murray, executive director of the Wood Pellet Association of Canada and offered conference attendees a snapshot of the increased activities in both global pellet production and trade.
Arnold Dale, vice president of bioenergy at Ekman & Co. kicked of the session with a global overview. He also outlined the continued rapid growth of imports of wood pellets by the United Kingdom and reported that in 2013, the U.K. imported 3.75 million tons of wood pellets. Dale concluded his remarks by identifying South Korea as a rapidly emerging market saying, “the South Koreans are scouring the world for pellets, but I think will likely end up getting what they need from their part of the world.”
Annalisa Paniz from the Italian Agriforestry Energy Association described an Italian pellet market with steadily growing demand, coinciding with decreasing pellet production. She reported that Italy is mainland Europe’s largest consumer of pellets, using over 3 million tons annually and growing between 200,000 and 300,000 tons each year. Strong residential pellet appliance sales in Italy have created strong demand, and Paniz estimates that there are nearly 2,000,000 pellet stoves and 200,000 pellet boilers installed in Italian homes. There are currently nearly 40 pellet producers in Italy, but Paniz reported that 90% of Italian pellet production is generated by about a dozen producers. Italian pellet production peaked in 2007 at nearly 750,000 tons but has fallen to about 300,000 tons since with domestic producers moving away from production and instead on the distribution of imported pellets. Austria and Germany are the largest suppliers of pellets to Italy, but bulk delivery of pellets by ship continues to increase and Paniz expects that at least 600,000 tons of pellets will arrive in Italy by ship in 2014. Italian ports, including Naples, are equipped with fines removal and bagging equipment.
An update on the pellet and renewable heat market in the UK was given by Edward Billington of Billington Bioenergy, a distributor of pellets and wood chips. Billington noted that while the country’s Renewable Heat Incentive was an ambitious policy, its implementation has proven to be challenging. The policy, initially announced in 2009, was intended to increase the renewable share of the U.K.’s heating market from 1.5 percent to 12 percent. In March of 2010, the policy was split into two components for implementation, one for commercial facilities and one for homes. At that time, the program roll out was delayed for commercial facilities until 2011 and the domestic program was delayed until 2012. Delays and deferrals have continued, with the last advisement being that a final decision on the program rollout would occur in the spring of 2014. There is still no word on when the household scheme will open. Billington said that when the incentive was drafted the Department of Energy and Climate Change forecasted that it would result in between 500,000 and 600,000 renewable heat installations. Because of uncertainty in the program or when the payments for generating and using renewable heat would begin, progress has been quite slow, with only 2700 biomass heat operations having been installed since the program began.
Dr. Olga Rakitova from the European biomass trade publication, the Bioenergy International, provided an overview of Russian pellet production. She told attendees that because of Russia’s long history in oil, gas and coal production and use that progress in bioenergy isn’t as rapid as one would expect considering the country’s significant inventories of wood fiber.Rakitova said Russian pellet production is just over 1,000,000 tons and 95 percent of that production is exported. There has been a trend away from small scale producers and that trend looks likely to continue as Rakitova reported that German Pellets intends to build a 500,000 ton per year facility in the North Novgorod region. Rakitova underscored the opportunity for pellet production in Russia because of its robust forest products industry and that infrequent utilization of this waste stream continued to be a problem in Russia.
David Dungate, a director at the US based Biomass Thermal Energy Council provided an update on U.S.-based pellet production and usage. Dungate said that domestic pellet usage would continue to grow slowly while U.S.-based production continues to expand rapidly being driven by continued demand from European power producers. Dungate drew attention to the trend toward larger production facilities with the average of plants under construction approaching 350,000 tons per year.
The European Pellet Conference concluded on February 27 and will return to Wels, Austria, on February 25-27, 2015.