Report discusses Japan’s pellet market

By Erin Voegele | November 18, 2016

The USDA Foreign Agricultural Service recently released a Global Agricultural Information Network report on Japan’s renewable fuel industry, which includes data on wood pellet market development, imports and exports.

According to the report, the country’s production and importation of wood pellets is increasing, along with palm kernel shell (PKS) imports. While the country has abundant biomass resources, they aren’t currently economical to extract and use, the report says. Therefore, wood pellet and PKS imports are likely to increase in coming years as biomass cofiring at power facilities increases under the country’s feed-in tariff system, which was introduced in 2012 and aims to promote renewable energy and heat at power plants.

The report also said Japan’s government recognizes it must increase the production scale of wood pellets to become competitive in the global market, as the cost of using domestically produced wood pellets is currently more expensive for power companies than imported wood pellets. Since the shutdown of most of the country’s nuclear plants post-Fukushima, power companies have been increasingly using pellets for thermal power generation.