All Markets Great and Small

Editorial Note: The pellet market is growing because passionate people are doing the hard work described in our articles in the third quarter issue of Pellet Mill Magazine.
By Tim Portz | June 30, 2014

The pellet industry is comprised of two vastly different markets: industrial and residential. Gordon Murray, executive director of the Wood Pellet Association of Canada, reminded us of this when he reframed a question about the differences between the marketplace experience for U.S. and Canadian producers in the Q&A found in the third quarter issue of Pellet Mill Magazine.

These two markets are formed by very different forces, shaped by unique policy initiatives and require unique distribution infrastructures to serve their eventual customers. The stories included in this edition of Pellet Mill Magazine illustrate those differences but also show the very visible thread that Murray identifies as the two pillars our industry is founded upon: sustainability and greenhouse gas benefits.

In his feature “‛State of Green’ Embraces Pellet Power,” Lennart Ljungblom offers an in-depth analysis of the policy and market drivers expanding wood pellet demand in Denmark. While already a significant buyer of wood pellets, Denmark’s demand thus far has been met by pellet suppliers to the east such as Latvia, Estonia, Lithuania and Russia. With aggressive policies for both woody biomass-derived heat (100 percent by 2035) and low-carbon power, it seems likely that the two ships carrying wood pellets from the U.S.  berthed in Danish ports in the past year indicate the emergence of a global buyer worthy of producer attention.

The remaining three features in the Q3 issue together outline the challenges the industry continues to face as it grows the residential and small commercial market. Chris Hanson continues our series on pellet burning appliances by digging into the hurdles that Austrian pellet appliance manufacturers face as they look to penetrate the North American marketplace. These appliance sales are closely watched, as Carla Harper reports in her article, “Changing Consumer Habits.” Harper takes a long look at the challenge this particular market poses to the industry, best articulated in a quote from Rob Davis, Forest Energy Corp. president. He laments the surges that consumers introduce into the demand cycle, saying, “It’s hard to plan for periodically 1 million customers buying 2 tons each at once.”

Our market is growing. It is doubling because passionate people are doing the hard work of getting appliances approved for new markets, replacing oil heat in schools in Oregon and beginning fuel switch projects in Denmark. The best news is that it seems the overall trajectory the industry is experiencing is unlikely to change anytime soon.