The Triple Crown of Biomass

By Kolby Hoagland | June 20, 2014

It is easy to harp on government and their inadequacies, but let’s face it, the biomass industry exists in the capacity that is does because of supportive government policies. The industrial pellet sector in the southeastern U.S. exists because of Europe’s climate change policies, which incentivize replacing coal with wood pellets. Yet, despite its importance, policy is not the only factor that enables and boosts growth in the biomass industry. Available feedstock and energy infrastructure, along with policy, form the backbone for growth and innovation in the biomass industry. This week’s DataPoints briefly looks at what I’m calling the “triple crown of biomass” and its regional implications. Without any one of the three components (policy, feedstock, and infrastructure), a biomass project will never be successful.

In the southeastern U.S., the swift rise of the industrial pellet export industry is due to the convergence of policy in Europe, numerous years of deferred harvest in southeastern forests, and an existing port infrastructure along the Gulf of Mexico and Atlantic. In other regions, say the northeastern U.S., the industrial pellet industry has not grown as rapidly because of a lack in feedstock (or at least feedstock at the price to make industrial pellet exports economically feasible). The southeastern U.S. forest industry has had a number of pulp and paper plants close in recent decades, which has led to a decline in demand and lower stumpage fees across southeastern forests compared to other regions in the U.S. While stumpage fees for pulp wood in Mississippi were around $9 a ton in the 4th quarter of 2013, an equivalent amount of pulp wood in Maine sold for roughly double during the same time period. The higher stumpage fee in the Northeast discourages bioenergy development on the scale needed for industrial pellet export development. Instead, the biomass industry in the Northeast primarily utilizes mill residue for local biomass power generation and premium pellet production. (Whole tree utilization does occur, but it is done on a far smaller scale than in the Southeast.) Despite the Northeast and the Southeast both having a strong port infrastructure, the cost of feedstock in the Northeast along with regionally supportive policy encourages local consumption of biomass rather than exporting it to a different region. In the Southeast, European policy and price of feedstock has instigated growth in forestry operations to feed the pellet export industry with relatively inexpensive feedstock and suffice European climate change mitigation goals.

In the Pacific Northwest, a healthy wood basket exists along with strong regional port infrastructure. The industrial pellet export market, however, is not growing as strongly in Washington and Oregon as one might imagine it would. The culprit once again is the price of feedstock and strong regional climate change policies that encourage local use of biomass. The sawn timber industry has remained healthy in the Northwest, which has kept stumpage fees relatively high. Even in 2008 and 2009 while the sawn timber industry declined with the economic downturn, stumpage prices remained relatively level in the Pacific Northwest because of growth in whole-log exports to China to support their construction boom. Bioenergy is a bottom feeder in regards to the types of biomass it can afford to utilize, and high stumpage fees discourage the development of large scale bioenergy plants that utilize whole trees.

The bioenergy industry in the Pacific Northwest of the U.S. is experiencing growth among local thermal heating projects, which operate a smaller more niche scale. Low electricity prices and high stumpage fees prevents the biomass power industry or industrial pellet export market from broadly expanding in the region despite healthy wood baskets and strong port infrastructures. State and municipal policy supports along with locally available (and reasonably priced) feedstock have led to the development of a number of thermal heating projects across the region.

Today in Biomass Magazine’s Webinar Series, I will be moderating a webinar that features a number of these projects and looks at growth in the biomass thermal heating industry in the Pacific Northwest. I encourage you to join, or if you can’t join access the recording at a later time. The webinar begins at 1pm PDT, and you can register to attend here.

NW Regional and State Biomass Incentives


NW Wood Energy Team

NW CHP Tech. Assist. Program


Pacific Biomass


WA DNR Biomass Program

Bioenergy Washington


Wood Energy Cluster

Biomass Energy Incentive

Biomass Tax Credit