Eyes on Domestic, Export Market Growth

Editor's note from Biomass Magazine 2021 issue 1.
By Anna Simet | February 24, 2021

The high today in Minnesota is 1 degree Fahrenheit, day four of a cold snap that is expected to last two weeks, with highs either below zero or just above. Deep freezes such as this one—particularly in the Northeast U.S.—have potential to quickly change the relative success of a given heating season and have a measurable impact on inventory levels.

Speaking of success and the domestic wood pellet industry, what you’ll find mentioned in several instances throughout these pages is the recent passage of the residential provisions of the BTU Act. On the surface it seems fairly cut and dry—a tax credit for buying an efficient wood heating appliance, meaning more money in consumers’ pockets and an easier sell—but it is more complicated than what meets the eye. Each part of the entire supply chain has work to do in order to maximize the benefits of the BTU Act, including appliance manufacturers, pellet manufacturers, and the retailers of pellets and appliances. In “Staying the Course,” on page 16, I examine much of what’s on the table for the wood pellet sector, including the supply and demand balance of which domestic heating fuel producers are always in pursuit. While industry stakeholders are optimistic of the BTU Act’s potential, many factors at play will influence its ultimate success, perhaps most significant being promotion of it to consumers.   

The accompanying feature in this issue pivots to the export market, focusing on the continued buildout of wood pellet handling infrastructure at North American ports. In the story, “Building Out for New Business,” on page 10, author Luke LeRoy covers improvements with several ports in the U.S. and Canada that either view wood pellets as an export commodity increasingly important to their operations, or one that could be. Growth of the wood pellet export market has justified substantial investments in some ports to allow them to expand their capabilities in storing, handling and shipping many millions of tons of wood pellets from U.S. and Canadian soil to overseas customers.

The final story I’ll mention is our page-20 contribution, “Russia’s Global Wood Pellet Supply Potential,” by Maria Frolova, which provides a comprehensive account of the country’s industry, from fiber sourcing to market prices to demand drivers. The detailed article estimates that Russia manufactured about 3 million tons of wood pellets in 2020, growing by about 20% year-over-year, making it only second in growth to the U.S. The end of the article discusses some new production facilities expected to come online in 2021, which will collectively add greater than 1.1 million tons to the country’s current capacity.

By the time this issue arrives on your desk, the virtual International Biomass Conference & Expo will be just around the corner. Pellet and other densified biomass producers qualify for free admission, so be sure to take advantage and join us on this innovative platform—there are nine sessions focused on pellets and densified biomass, so we have lots in store for you.

 

Author: Anna Simet
Editor, asimet@bbiinternational.com