Report details biomass heat, power production in Japan

The USDA Foreign Agricultural Service recently released a Global Agricultural Information Network report on Japan’s renewable fuel industry, which reviews the country’s renewable fuel mandates/policy and progress toward meeting them, as well as biofuel and wood pellet market development, imports and exports.

The report provides an overview of Japan’s current plan to introduce 500 million liters of crude oil equivalent biofuel by 2017, the country’s sustainability standards and incentives for biofuels, and touches on other renewable policies and programs, including a goal to increase Japan’s power supply from renewable energy sources to 22-24 percent by 2030.

 Japan’s feed-in tariff (FIT) system, designed to promote renewable energy in heat and power plants was introduced in 2012, is facilitating renewable power growth in the country. The program requires power companies to purchase electricity at set rates for 10 to 20 years, and rates are reviewed annually and adjusted.  According to the report, since the system was introduced, the number of power generating facilities using renewable energies has steadily increased. In 2016, plants using renewable wood materials are receiving approximately 13 cents to 40 cents per kilowatt-hour, plants using waste materials receive 17 cents per kWh, and biogas plants approximately 39 cents per KWh.

Related to the FIT program and Japan’s renewable power goals, the report indicates that both the country’s production and importation of wood pellets is increasing, as well as palm kernel shell (PKS) imports. While the country has abundant biomass resources, they aren’t currently economical to extract and use, the report said. Therefore, wood pellet and PKS imports are likely to increase incoming years as biomass cofiring at power facilities increases under the FIT system.

Japan’s government recognizes it must increase production scale of wood pellets to become competitive in the global market, the report said, as the cost of using domestically produced wood pellets is currently more expensive for power companies to purchase than imported wood pellets. Since the closing of most of the country’s nuclear plants post-Fukushima, power companies have been increasingly using pellets for thermal power generation.

For residential and industrial use, since the government’s Biomass Nippon Strategy was unveiled in 2002—Japan's first national strategy to utilize biomass as a valuable resource by meeting technical, regional and national goals—pellet boiler and stove use for heating public facilities and residents has increased, alongside domestic pellet production. According to the report, in 2014, production from the country’s 142 plants was about 126,000 metric tons (MT) per year. Japan’s average wood pellet plant is much smaller than those of the U.S. or Europe—each produces between 100-1,000 MT annually.

In 2015, production increased 140 percent from the previous year, the report found, to 232,000 MT annually. About 63 percent, or 146,000 MT, were imported from Canada, 25 percent from China, and 12 percent from Vietnam. Total consumption in Japan in 2015 was 376,000 MT.

Wood pellet consumption is forecast to increase at a much quicker rate than domestic production, from 376,000 MT in 2015 to 468,000 MT in 2016, with 167,000 MT produced domestically and 302,000 MT imported. In 2017, consumption is forecast to rise to 553,000 MT per year with 192,000 MT produced domestically and 362,000 MT imported.

The report concludes that imports of wood pellets are likely to increase in the coming years due to coal-biomass cofiring at thermal power plants, as well as at small and mid-scale biomass power facilities that benefit under the FIT system.

Also included in the report is information on the country’s research and production of advanced biofuels, which is focused mainly on cellulosic and algal sources and technologies to mass produce biofuels. It provides examples of joint research projects aiming to commercialize bio-jet fuel from algae by 2030.

Ethanol and biodiesel are also included in the report.