Pellet Outlook 2019: a record growth year for wood pellet markets? By Seth Walker and William Strauss Looking ahead F rom a North American producer’s perspective, 2018 was one of the best years in quite some time for the wood pellet trade. After several years of tempered development following the ramp up of the Drax power station in the UK, new markets and consumers drove strong growth in global demand. Imports to Denmark, South Korea and Japan all increased at least 40 per cent from previous highs, with Japanese wood pellet imports more than doubling. Better market conditions and less inventory also led to strong growth in North American and European heating markets after several weak years. Overall, wood pellet trade in 2018 is estimated at 23.8 million tonnes, a whopping 26 per cent increase from 2017’s 18.9 million tonnes. This article will provide an outlook for what to expect from key markets in the years to come. INDUSTRIAL PELLET MARKETS Industrial pellet demand is estimated at 17.5 million tonnes in 2018. FutureMetrics projects that this will climb to 29 million tonnes in 2023. Nearly 60 per cent of this new demand growth is projected to come from Asia, with most of the remainder from increased demand in the UK and the re-emergence of a significant industrial pellet market in the Netherlands. UNITED KINGDOM with the scheduled commissioning of MGT’s 299 MW Teeside CHP plant, expected to use up to 1.5 million tonnes per year. NETHERLANDS In 2018, UK pellet demand increased significantly for the first time in several years with the commissioning of EPH’s 396 MW Lynemouth Power Station conversion and the conversion of a fourth unit at the Drax power station. Moving forward, growth will be primarily driven by a ramp up to full operation at Lynemouth and increased availability at the Drax power station. In 2020, UK demand will increase again The Netherlands has a history as a major market for industrial wood pellets. In 2010, the Netherlands was the biggest market for industrial wood pellets – used for co-firing to meet renewable energy goals. The market rapidly declined when a new renewable energy subsidy scheme was introduced in 2012. The new SDE+ scheme required new sustainability standards to be developed before biomass co-firing could qualify for subsidies. That sustainability criteria were finally approved in 2015. In 2016, subsidies were awarded for co-firing at four power plants: RWE’s Amer and Eemshaven power stations, Engie Rotterdam and Uniper Maasvlakte 3 (MPP3). Unit 9 at the Amer power WINTER 2019 20 Canadian BIOMASS
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