 |
| US wood pellets reducing EU greenhouse gas emissions |
Hundreds of millions of dollars are being invested in factories – some of them converted from old lumber mills – in coastal plain forests from Virginia to Louisiana and Maine.
They are serving a market created, almost overnight, by new environmental policies that are driving European electric utilities to burn imported wood in their boilers instead of coal.
This came about as the European Union adopted aggressive targets for reducing greenhouse gas emissions that contribute to global warming. They created incentives for electric utilities to cut back on their use of coal and will require renewable sources to provide 20 percent of all energy by 2020. Wind and solar power are also a part of this equation.
European power companies are looking to close the gap with biomass – primarily with imported wood pellets. Biomass use in Great Britain, 3 million tons last year, is expected to grow tenfold over the next five years.
Britain’s biggest carbon emitter is the Drax Group, a Yorkshire utility that operates the largest power plant in western Europe. Drax is converting half its plant from coal to wood pellets. Coal is one-third the price of pellets, but Drax CEO Dorothy Thompson said her company is responding to renewable-energy credits and a British carbon tax, introduced this year at $7 a ton, that will grow by 2020 to more than $60 a ton.
In Europe, the United Kingdom is the No. 1, importer bringing in 855,000 metric tons (mt) from Canada last year and another 475,000 mt from the U.S. While Canadian pellets dominate the U.K. market, the U.S. is the biggest supplier to the Netherlands and Belgium. Denmark and Sweden receive the most pellets from Russia.
While the EU power market has gotten much attention, the heating market comprises 40 percent of the EU pellet market, with no subsidy required, because Pellets are 30 percent cheaper than heating oil. Currently, 90 percent of Canadian exports are being shipped from western ports and going through the Panama Canal, but an effort is underway to organize the smaller pellet producers in eastern Canada to pool resources and product to develop export facilities in the east.
The bottom-line is that the consumer marketfor pellets in the EU has grown into a very stable market, It is no longer seasonal and some people even prefer to buy pellets in the summer months.
In the foreseeable future the US and Canada seem to be well poised to meet these European demands.
Maryland-based Enviva LP the US’s biggest pellet maker, opened its Ahoskie mill in 2011 and a second one in Northampton County this year. Together, they produce 865,000 tons of pellets annually to be shipped out of the port at Chesapeake, Va.
In 2015, Enviva expects to start exporting an additional million tons from a planned $40 million terminal at the Wilmington port. The company is scouting sites for two new pellet mills in southeastern North Carolina, one of them in Sampson County.
At the same time, California-based International Woodfuels has said it will produce 285,000 tons a year from a planned pellet mill in Wilson County and a new export terminal at the Morehead City port.
Eastport in Washington County, Maine, near the Canadian border, which is planning a $120m wood-pellet factory, is one of the areas which seems especially well positioned to benefit from this European "craving" for wood pellets.
Chris Gardner, the director of the Eastport Port Authority says, "Eastport is the closest port on the US East-Coast to the European heartland. We can get European consumers their wood pellets before anyone else in the US".
The pellet industry is a "green industry" and not harmful to the environment as it is founded on a climate-friendly, carbon-neutral rationale.
All forests use photosynthesis to soak up carbon dioxide. This stored-up carbon is released into the air when wood pellets are burned, but wood is called a renewable fuel because that carbon eventually is recaptured by new trees that grow in place of the old ones.
The wood pellet industry can certainly become a win-win proposition for everyone.
EU-Digest 
No comments:
Post a Comment