Ever-Evolving Markets

Undoubtedly, vast opportunity remains in Asian energy markets. It will be exciting and interesting to watch it all unfold, as the global pellet market continues to evolve, expand and, inevitably, compete.
By Anna Simet | December 04, 2018

For quite a while in the pellet export market, Asia has been viewed as the new Europe, a major driver being the biomass feed-in tariff rates set by the Japanese government. When these kinds of incentives are announced, for the energy industry, it’s comparable to a modern-day Gold Rush. Things can change, however, and in this case, it seems they have—at least, to a degree.

On page 22, Hawkins Wright Biomass Research Manager Rachael Levinson discusses some key policy changes in Japan that have shaken out some of the many proposed projects—a number so high the government was likely blindsided—and will probably be the demise of more. But new deals are still being signed and the market is still growing, Levingston writes, and it will continue to do so, just not at the expeditious rate previously anticipated.

Moving to a country that I can’t recall ever including in the pages of Pellet Mill Magazine, on page 10, Senior Editor Ron Kotrba digs deep into the roots of a biomass and pellet manufacturing initiative in Sri Lanka. Biomass Ventures’ ultimate goal is to build a robust feedstock supply chain from the ground up to feed pellet production for export and domestic power using Gliricidia Sepium trees, which are adapted to a wide range of agroclimatic and soil conditions and can be cultivated all over Sri Lanka.

Partner growers have planted roughly 100 million Gliricidia trees to date, and Biomass Ventures founder Lucky Dissanayake says the aim is to plant 1 billion trees, and have 15 million tons per annum growing in Sri Lanka. Through the venture’s subsidiary Trinco Pellets, the aim is to produce and sell pellets under long-term contracts to the Japanese market, by 2021-‘22. “We have set a target of 150,000 tons of exports per year from a pellet manufacturing facility at Trincomalee, and then 150,000 tons of exports from Hambantota port,” Biomass Ventures’ Alexis Corblin tells Kotrba.

Finally, the U.S. Industrial Wood Pellet Association’s Seth Ginther answered a collection of questions I had for him in “Maintaining Momentum,” on page 18. In the Q&A, he covers everything from industry growth to past and present policy, to new opportunities on the horizon, as well as his perspective on the U.S. increasing its market share in Asia. “We see a lot of potential in the Asian markets,” he says. “The U.S. South has an abundance of lower-grade, affordable feedstock…all market projections indicate we will experience a surplus of this feedstock for the foreseeable future. This makes the region a very competitive supplier for both Japan and South Korea.”

Undoubtedly, vast opportunity remains in Asian energy markets—which, if you haven’t yet guessed, is the theme of this month’s issue. It will be exciting and interesting to watch it all unfold, as the global pellet market continues to evolve, expand and, inevitably, compete. 

Author: Anna Simet