Flemish decision on subsidies reportedly impacts pellet cofiring

A recent report filed with the USDA Global Agricultural Information Network indicates the Flemish power sector may have stopped cofiring wood pellets due to a recent reinterpretation of Flemish law that restricts the type of pellet for which Green Certificates can be awarded.  The new legal interpretation finds that the certificates cannot be granted to biomass that is an industrial resource, this includes biomass that can be used for housing, paper, particle board or compost.

According to the report, the Belgium government funds the production of renewable electricity through the Green Certificate Scheme. Permission for issuing the certificates was given through two Flemish agencies, but were granted only with the consent of the Belgian wood industry federation, which had previously declared that pellet production did not compete for their resources. The report states that this conclusion was based on the fact that 90 percent of the pellets used in the region were produced in North America.

The new interpretation of the law was made in mid-February, with the government electing to make the decision retroactive back to Jan. 1. It states that approval for Green Certificates cannot be made based on distance only. Essentially, issuance of credits must now be based on technical criteria rather than distance criteria.

The report says the Belgian power sector has indicated that in practice, only wood dust smaller than 0.2 millimeters, wood with a diameter of 4 centimeters or less, bark, stumps up to 30 centimeters aboveground and plantation wood are automatically accepted. “The power sector has stated that this situation puts all existing and planned wood-pellet based biomass projects in Flanders at risk,” said the authors in the report.

Recently released U.S. Energy Information Administration data show that an estimated 18 percent of U.S. wood pellet exports were delivered to Belgium in 2013. The country was the second highest importer of U.S. wood pellets, following the U.K., which imported a 59 percent of U.S. wood pellet exports. Flanders comprises the northern portion of Belgium.

A full copy of the report can be downloaded from the USDA GAIN website.