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Wood Pellet Trade Doubles in Five Years; Driven by Biomass-Fueled Power Generation

 

Global trade in pellets has doubled since 2012 with U.S., Canadian and European producers all playing a role, according to the European Pellet Supply and Cost Analysis, a new study from Risi, an information provider for the global forest products industry headquartered in Bedford, Mass.

Demand for pellets is rising because they are playing a key role in de-carbonizing power grids, according to the study. European nations, in particular, have invested heavily in pellets for both heating and electricity generation, the study notes. How the supply stream may evolve is the focus of the study.

“Over the past five years, the wood pellet industry has expanded more than any other forest product industry, both in terms of wood consumed and dollars invested,” said Seth Walker, Risi bioenergy economist and author of the new study.  “Pellet imports by power plants in England, Belgium, and Denmark are driving demand and investment for pellet-producing countries like the U.S., Canada and European suppliers like Latvia, Estonia, and Portugal.”  While much of Europe’s appetite for pellets has been met by the U.S., the new study sees potential for this to change going forward.

“The strength of the U.S. dollar means that its producers now have a higher cost structure than many competing European countries,” says study author Walker.  “Our analysis looks at how exchange rates factor into competitiveness along with production and shipping costs.  The European Pellet Supply and Cost Analysis is an analysis of the regions supplying this large and growing market. For each exporter of pellets to Europe, it provides details on the pellet output, fiber furnish shares, production costs, facility ownership and market share, information on logistics and trade, and more.

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