Enviva discusses expansion projects, net-zero goal

By Erin Voegele | February 25, 2021

Enviva Partners LP released fourth quarter financial results on Feb. 24, reporting progress with efforts to increase its wood pellet production capacity and discussing plans to achieve net-zero greenhouse gas (GHG) emission by 2030.

“We are very proud of our accomplishments in 2020. Despite the challenges presented by COVID-19, we operated our plant and terminal assets stably and reliably, we made uninterrupted deliveries to our customers, we completed two transformative acquisitions, we met our increased guidance expectations for adjusted EBITDA, distributable cash flow, and full-year distributions, and we delivered a 30 percent total return to our unitholders, all while keeping our people safe and healthy,” said John Keppler, chairman and CEO of Enviva. “As we turn the page to 2021, our ability to generate stable cash flows that grow over time is poised to be more robust than ever, fueled both by organic growth as we look to replicate the highly accretive expansion projects in our existing portfolio and, against the backdrop of the forthcoming start-up of our sponsor’s fully-contracted Lucedale plant and Pascagoula terminal, coupled with existing and new long-term take-or-pay off-take energy supply contracts with large customers around the world, through additional drop-downs.”

Enviva confirmed it has received the necessary permits to expand production at its pellet plant in Greenwood, South Carolina, to 600,000 metric tons per year. Construction is ongoing with the expansion on track for completion by the end of 2021.

The company also reported it is continuing to commission certain assets and ramp production from the existing expansion projects at its facilities in Northampton, North Carolina, and Southampton, Virginia. Each facility is expected to reach nameplate production capacity of approximately 750,000 metric tons per year by the end of 2021.

Expansion projects are also planned at Enviva’s wood pellet plants located in Sampson, North Carolina; Hamlet, North Carolina; and Cottondale, Florida. Those projects are subject to the company receiving necessary permits.

Development is also continuing on proposed wood pellet plants located in Lucedale, Mississippi, and Epes, Alabama, along with a deep-water marine terminal in Pascagoula, Mississippi. Enviva said its sponsor is also evaluating additional sites for wood pellet production plants across the Southeastern U.S.

As part of its net-zero efforts, Enviva said it plans to reduce, eliminate or offset all of its direct emissions. This includes immediate steps to minimize emissions from fossil fuels used directly in the company’s operations. To reduce emissions arising from its electricity purchases, Enviva said it is pledging to source 100 percent renewable energy for its operations by no later than 2030, with a target of at least 50 percent by 2025. The company also said it will seek to drive innovative improvements in its supply chain.

Enviva generated $277.3 million in net revenue for the fourth quarter, up from $200.5 million reported for the same period of 2019. Gross margin was $26.6 billion, down from $28.2 million, with adjusted gross margin at $72.8 million, up from $55 million. Adjusted gross margin per metric ton was $54.02 for the fourth quarter, up from $52.83 during the fourth quarter of the previous year.

Net loss was $400,000, compared to net income of $900,000. Adjusted net income was $11.1 million, down from $17.2 million. Adjusted EBITDA for the quarter was $69.3 million, up from $53.3 million.

Additional information is available on the Enviva website.