The U.S. pellet export industry had an outstanding year in 2013.
That&rsquo;s evidenced by the number of projects that came on line, and the fact that producers are delivering mass quantities of pellets to overseas markets on spec and on time, according to Seth Ginther, executive director of the U.S. Industrial Pellet Association.
Ginther, one of seven trade association leaders who participated in the International Biomass Conference &amp; Expo&rsquo;s State of the Industry general session on March 25, added that the sector overshot RISI five-year projections by 14 percent, shipping out 3 million metric tons of pellets in 2013.
The main driver behind the industry&rsquo;s momentum is policy certainty in Europe, Ginther explained. &rdquo;We&rsquo;re beginning to achieve [policy certainty], and that&rsquo;s what&rsquo;s needed to get capital flowing, contracts signed and to get assets in the ground.&rdquo;
Examples of said policy certainty include renewal of the United Kingdom&rsquo;s Renewables Obligation, a clearer picture of what meeting sustainability criteria entails, and movement outside of the U.K., in markets including the Netherlands and Asia. &ldquo;In 2013, the Netherland assigned an energy deal that calls for 3.5 million metric tons per year of co-firing,&rdquo; Ginther said. &ldquo;Five 500,000-metric-ton plants that would have to be built to supply those plants. All won&rsquo;t come from the U.S., but I like to think that a good portion will.&rdquo;
Asia, which is projected to become a 5 million-metric-ton market by 2020, is beginning to realize the need for long-term off-take agreements, rather than trying to source supplies from the spot market, Ginther added. &ldquo;In the U.S., all of the pellets are really spoken for&hellip;you can&rsquo;t get a consistent supply off of the spot market.&rdquo;
Pellet Fuels Institute President Jennifer Hedrick and Biomass Thermal Energy Council Executive Director Joseph Seymour had similar stories to share regarding the past year&rsquo;s successes for the residential pellet and biomass thermal markets&mdash;increased pellet consumption, a tax credit in the House and Senate, Farm Bill certainty and a memorandum of understanding with the USDA&mdash;and discussed the relevance and importance of the U.S. EPA&rsquo;s New Source Performance Standards for Residential Wood Heaters, which Hedrick said refers to the PFI&rsquo;s Standards Program.
Seymour pointed out that wood heater regulations haven&rsquo;t been updated in a meaningful way for 25 years, and the industry has advanced dramatically during that time. &ldquo;Wood heating at residential scale has grown 30-plus percent from 2000 to 2010,&rdquo; he said. &ldquo;We need to update our regulations, because there are certain counties and states that are looking at prohibiting use of wood heat because of legacy wood heaters that are poor performers and smoking up the air sheds. &ldquo;
Seymour noted that if the industry wants to continue to see continued growth of residential heating, it needs to ensure that clean, efficient and advanced systems are incentivized through regulations that work and do not make equipment cost prohibitive to consumers.
American Biomass Council Executive Director Patrick Serfass said the biogas industry has made headway when it comes to state policy, but not so much federally, aside from the Farm Bill. It&rsquo;s been a robust year for project development, he added, and the dynamics of the industry are changing in positive ways, especially when it comes to taking advantage of the value of digestate.
Todd Taylor, representing the Algae Biomass Organization, said the association plans to elect a new executive director in the coming months. While the sector does have reservations and concerns when it comes to federal policy, it received strong support under the new Farm Bill. Taylor added that fuel is the &ldquo;golden ring&rdquo; of potential markets for algae, but members are increasingly taking advantages of other nonfuel markets such as nutriceuticals.
Biomass Power Association President Bob Cleaves reflected on the biomass power industry&rsquo;s booming year, which brought on line over 700 MW of capacity and hundreds of millions of dollars in investments. &ldquo;Some might look at it pessimistically and say that 1603 has expired, that it was Recovery Act money and aren&rsquo;t likely to see that level of growth [in the future], but if you look at the overall energy picture in the country, besides natural gas, there&rsquo;s a real push for renewables. Biomass, being dispatchable&mdash;and combined with the polar vortex&mdash;will play an important role.&rdquo;
On the Tailoring Rule and the EPA&rsquo;s decision on how it will regulate biogenic emissions, Bob said EPA has a deadline of July, and while it isn&rsquo;t definite that the agency will meet that deadline, it is expected that something will be released this summer, likely a framework.
&nbsp;It will have implications on the entire biomass industry, Cleaves added. &ldquo;This issue affects everyone on this stage, everyone in this room, anybody that interested in energy from biomass. It affects existing plants&hellip;it affects new plants&hellip;it affects modifications to existing plants, it affects the RFS, it affects tax reform. It&rsquo;s the ball game.&rdquo;
Unlike the other sectors&rsquo; relatively successful year, it&rsquo;s been a difficult 12 months for the advanced biofuel industry, according to Michael McAdams, president of the Advanced Biofuel Industry, who provided attendees with a dismal but honest assessment of the state of the sector. &ldquo;We have a lot of guys who have hit the wall,&rdquo; he said. &ldquo;I&rsquo;ve seen a lot of member atrophy because they&rsquo;ve simply run out of runway, and the financial community has not reacted well at all to the fight between corn ethanol and the oil industry, with respect to the RFS.&rdquo;
On what 2014 looks like, McAdams said he doesn&rsquo;t see things changing much. &ldquo;We have an administration who has said it supports advanced and cellulosic industry, and then puts the rule out that cuts the numbers from actual production in 2013 by 40 percent.&rdquo;
Besides potentially drastically lowered RVO volumes and the ensuing crash of RIN values, another great challenge rests with the EPA and its inability to deliver pathways , McAdams added. &ldquo;Just two weeks ago, they said they suggest that nobody send them a pathway request for the next six months, while they figure out a way to fix the system they haven&rsquo;t been able to run for three years. That&rsquo;s not exactly a business-friendly approach to building an industry, but we have to work with EPA because they control the marbles&hellip;It&rsquo;s not a charming statement, but it accurately reflects the position we&rsquo;re in, and it means we all have to work together.
The International Biomass Conference &amp; Expo is being held in Orlando, Fla., and continues through March 26.
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Leaders of seven trade associations participate in the 2014 International Biomass Conference & Expoâ€™s State of the Industry general session. 

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Leaders of seven bioenergy trade associations participated in the International Biomass Conference & Expo's State of the Industry general session on March 25 in Orlando, Fla. 

Biomass association leaders discuss triumphs, troubles

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