Pellet Outlook Global Pellet Demand With pellet demand expected to at least triple in the next decade, what next steps are needed? By Todd Bush, Silvio Mergner and Hannes Lechner i N the next eight years, significant growth is predicted in wood fuel pellet markets worldwide. Eu-rope will continue as the largest source of demand, with markets also emerging in Asia. Growth in production will continue in North America, but new production is being established in nearly all wood fibre baskets worldwide. In addition, pellets produced from agricultural products and through innovative processes such as tor-refaction may also emerge to some degree. The fact is that no region or technology remains the obvious leader for prudent investment decisions. With growth nearly tripling by 2020, each region and technol-ogy has its own unique pros and cons. As a management-consulting firm, Pöyry has delivered due diligence, pre-fea-sibility, feasibility and strategy-consulting projects to organizations in every link in the wood bioenergy value chain. In ad-dition, the firm has conducted extensive market research and reviews for the entire pellet industry. The current global market volume of biomass pellets of around 16 million met-ric tons annually (mt/a) is projected by Pöyry to increase to 46 million mt/a by 2020, representing a total market value of up to $8 billion U.S. The adoption of biomass fuel pellets is largely driven by policy and financial incentives in much of the world, and this will continue to be the case. However, this reliance on tradition-ally unpredictable policy incentives adds a level of uncertainty. Increasing influence from fossil fuel prices will also play a larg-er role in the future. Western Europe will remain the largest consuming region (13 million mt/a), with much of the growth being driven by the Pellet machines will be growing in number throughout North America thanks to significant increases in demand. In the next 10 years, look for a doubling of pellet production in North America, and major growth in Europe and China. Canadian BIOMASS 27
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