A Potential Boost to the Pellet Market

Pending legislation in the House could help open up wider domestic markets for wood fuel pellets. Reps. Glenn Thompson, R-Pa., and Kurt Schrader D-Ore. recently introduced the Forest Products Fairness Act of 2012 (H.R. 5873), which is legislation that aims to add a wide range of forestry products—including fuel pellets—as qualifying products under the USDA’s BioPreferred program. A similar bill was introduced in the Senate by Sen. Roy Blunt, R-Mo., and Mark Pryor, D-Ark.

The BioPreferred program has made great progress over the past year. The program essentially aims to increase the use of biobased products through a federal procurement requirement, and a biobased labeling program. In its current form, the program excludes most forest products from participating.

While, personally, I would argue that the ability to label a wood fuel pellet with the USDA certified biobased label seems a bit redundant—as I hope American consumers already realize that wood is by definition biobased—I do think the federal procurement portion of the program could help create significantly larger markets for biobased fuel pellets.

According to the USDA, the federal procurement component of the product requires federal agencies and their contractors to give preferential consideration to categories of biobased products designated by the USDA. In other words, the BioPreferred program basically requires a federal department or office to purchase a qualified biobased product over a petroleum-based product when available and feasible. One example might be electing to purchase biobased cleaning solutions or biobased plastic cups rather than comparable items manufactured using fossil fuel feedstock.

In the event the pending legislation becomes law, these federal agencies, departments and offices could be required to give preference to biobased fuel pellets when feasible. For example, a federal facility that operates a coal-fired boiler under certain circumstances could be required to replace a portion of the coal used with biobased fuel pellets.

Of course, it is important to note that specific implementation of any change to the BioPreferred program would depend upon the final language of any bill that is signed into law, as well as the specific guidelines and regulations the USDA would draft to comply with the legislation. That said, the federal government is a huge consumer of goods and I think adding biobased fuel pellets to the BioPreferred program could be a powerful force in encouraging greater use of fuel pellets in the U.S.