2017 April Biomass Magazine by BBI International

April 2017

A HAND IN GLOBAL MARKETS World Pellet, Renewable Fuel Exports Surge PAGE 44

PLUS:

US Biodiesel Producers Push to Meet More Demand at Home PAGE 36

AND: Maine Forest Industry Looks to Export Opportunities PAGE 28

www.biomassmagazine.com

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APRIL 2017 | VOLUME 11 | ISSUE 4

05 EDITORâ&#x20AC;&#x2122;S NOTE What Tangled Webs By Tim Portz

08 COLUMN US Forest Service and Biomass: A Symbiotic Partnership By Bob Cleaves

10 COLUMN Providing Clarity of Industry Terminology By MARCUS GILLETTE

12 COLUMN Expanding Wood Heat in New England By BILL BELL

14 BUSINESS BRIEFS 20 BIOMASS CONSTRUCTION UPDATE 28 FEATURE Sustaining Maine's Legacy

Efforts in Maine are focused on sustaining existing and creating new markets for Maine's biomass and logging industries, which have been hit hard in recent years. By Anna Simet

36 FEATURE The Imports Cometh

U.S. imports of biomass-based diesel soared in 2016. In response, the domestic biodiesel industry is working on counteractive measures to protect their investments. By Ron Kotrba

44 FEATURE Sizing Them Up

A close look at the export data for wood pellets, fuel ethanol and biodiesel reveals a varying reliance of export markets for U.S. producers. By Tim Portz

50 CONTRIBUTION The Art and Advantages of Briquetting

Applications for briquettes have grown in recent years, as have different technologies and new applications. By ESBEN MIKKEL VESTERGAARD

52 CONTRIBUTION US Forest Product Exports to Asia Existing North American infrastructure lights the way for biomass exporters. By STAN PARTON

56 CONTRIBUTION Addressing Biomass Energy 'Alternative Facts'

Recent assertions of a new report on biomass energy are grossly inaccurate. By WILLIAM STRAUSS

62 MARKETPLACE 4 BIOMASS MAGAZINE | APRIL 2017

EDITOR’S NOTE¦

EDITORIAL

What Tangled Webs

PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz tportz@bbiinternational.com MANAGING EDITOR Anna Simet asimet@bbiinternational.com SENIOR EDITOR Ron Kotrba rkotrba@bbiinternational.com NEWS EDITOR Erin Voegele evoegele@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

ART ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Raquel Boushee rboushee@bbiinternational.com

PUBLISHING & SALES CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT OF OPERATIONS Matthew Spoor mspoor@bbiinternational.com SALES & MARKETING DIRECTOR John Nelson jnelson@bbiinternational.com BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse hbrockhouse@bbiinternational.com SENIOR ACCOUNT MANAGER Chip Shereck cshereck@bbiinternational.com CIRCULATION MANAGER Jessica Tiller jtiller@bbiinternational.com MARKETING & ADVERTISING MANAGER Marla DeFoe mdefoe@bbiinternational.com

EDITORIAL BOARD MEMBERS Stacy Cook, Koda Energy Ben Anderson, University of Iowa Justin Price, Evergreen Engineering

This issue of Biomass Magazine, the companion issue for the International Biomass Conference & Expo, offers a data-rich and comprehensive assessment of the role that imports and exports play in the broader biomass-to-energy segment. Together, the stories make it clear that each sector is similar to the next, in that they TIM PORTZ covet foreign markets as a means of industry growth. VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Yet, the most compelling discoveries our team made tportz@bbiinternational.com while producing this issue are the ways in which the import/export realities of the sectors differ from one another. Senior Editor Ron Kotrba’s page-36 feature, “The Imports Cometh,” is a case study in the law of unintended consequences when well-intentioned domestic policies meet the global marketplace. Last year, the U.S. imported more than twice as much biodiesel as domestic producers made in 2010. Argentina alone shipped nearly a half a billion gallons of biodiesel into the U.S. last year, while U.S. producers shipped less than 100 million gallons to all foreign markets combined. Had U.S. producers been running at full tilt to satisfy domestic demand, this fact would not likely generate the rancor that it does, but Kotrba points out in his piece that U.S. producers are only operating at about 70 percent of full throttle. This simple fact makes it clear why the National Biodiesel Board continues to push for changing the tax credit from one awarded to blenders of biodiesel, regardless of where it originates, to one that is awarded to domestic producers. That situation couldn’t be more different for the relatively new class of wood pellet producers in the U.S. While this country does have a domestic market for wood pellets, it has little to no impact on the emergence and continued growth of the industrial pellet capacity in the Southeast. The stark contrast between the two made an impression on me, and I dedicated the bulk of my page-44 feature, “Sizing Them Up,” to a side-by-side comparison of three U.S. renewable energy commodities, and the size, proportion and diversity of the export opportunities that each enjoys. They really couldn’t be more different from one another. Both U.S. ethanol and wood pellet producers are the world’s largest producers, but U.S. ethanol is largely consumed in domestic markets, while U.S. pellet exports outstrip domestic usage three or four times over. The tie that binds them all is the complexity of the web of foreign and domestic policies that support these markets, and the constant effort to ensure these policies introduce at least as much opportunity for U.S. interests as they do for a growing roster of foreign competitors.

Adam Sherman, Biomass Energy Resource Center

APRIL 2017 | BIOMASS MAGAZINE 5

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INDUSTRY EVENTS¦ 2017 International Biomass Conference & Expo

¦ADVERTISER INDEX

APRIL 10-12, 2017

2017 International Biomass Conference & Expo 2017 National Advanced Biofuels Conference & Expo AB Bruzaholms Bruk Advanced Cyclone Systems, S.A. Agra Industries A-Lert Construction Andritz Feed & Biofuel A/S Astec, Inc. Basic Machinery Co., Inc. Biomass Engineering & Equipment Biomass Magazine Biomass Preparation, Handling & Storage Workshop BRUKS Rockwood Continental Biomass Industries, Inc. CPM Global Biomass Group D3MAX LLC Detroit Stoker Company DMT Clear Gas Solution European Biomass Conference FOREST2MARKET Fox Venturi Eductors Galileo GreCon, Inc. Hallco Industries Heating the Midwest Hermann Sewerin GmbH Hurst Boiler & Welding Co. Inc. IEP Technologies IHI Power Services Corp. KEITH Manufacturing Company Laidig Systems, Inc. Mole Master Services Corporation Phelps Industries Player Design, Inc. ProcessBarron Rotochopper Inc. SCHADE Lagertechnik GmbH Sugimat, S.L. Tramco, Inc. Uzelac Industries Varco Pruden Buildings Vecoplan LLC Vermeer Corporation Williams Crusher

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Minneapolis Convention Center | Minneapolis, MN Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop––the world’s premier educational and networking junction for all biomass industries. (866) 746-8385 | www.biomassconference.com

Heating the Midwest APRIL 10, 2017

Minneapolis Convention Center | Minneapolis, MN The Midwest relies heavily on fossil energy for heating homes and businesses. Heating the Midwest is a network of thermal biomass advocates working to increase awareness and usage of renewable biomass for heat, which has the potential to greatly reduce the region’s dependence on propane and fuel oil for thermal energy. (866)746-8385 | www.biomassconference.com

Biomass Preparation, Handling & Storage Workshop APRIL 10, 2017

Minneapolis Convention Center | Minneapolis, MN The operation and financial success of any biomass-to-energy facility requires its operators to utilize high-quality, consistent biomass feedstocks. The Biomass Preparation, Handling & Storage Workshop agenda will allow producers to take an in-depth look at the latest innovations and strategies in biomass handling and compare it to their own. Whether producers are sourcing wood chips from a handful of trusted suppliers for a campus boiler or are a biorefinery working to gather, store and convert hundreds of thousands of tons of agricultural residues, this agenda will offer practical value. (866)746-8385 | www.biomassconference.com

Emerging Biomass Feedstocks Forum APRIL 10, 2017

Minneapolis Convention Center | Minneapolis, MN As the biomass industry continues to grow, so too does the opportunity for other feedstocks to capitalize on this market and generate real revenue. Whether grown intentionally to diversify a farm operation or available already to anyone who can figure out how to make their removal economical, feedstocks are the backbone of any biomassto-energy operation. The Emerging Biomass Feedstock Forum will provide attendees an opportunity to hear about the efforts to bring new material streams to plant gates for conversion into power, thermal energy or renewable fuels. (866)746-8385 | www.biomassconference.com

2017 National Advanced Biofuels Conference & Expo JUNE 19-21, 2017

Minneapolis Convention Center | Minneapolis, MN With a vertically integrated program and audience, the National Advanced Biofuels Conference & Expo is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels including cellulosic ethanol, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products. (866) 746-8385 | www.advancedbiofuelsconference.com

Biomass Magazine: (USPS No. 5336) April 2017, Vol. 11, Issue 4. Biomass Magazine is published bi-monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Biomass Magazine/ Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

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Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.BiomassMagazine.com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 701-746-8385 or service@bbiinternational.com. Advertising Biomass Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Biomass Magazine advertising opportunities, please contact us at 701-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Biomass Magazine Letters to the Managing Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to asimet@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

APRIL 2017 | BIOMASS MAGAZINE 7

US Forest Service and Biomass: A Symbiotic Partnership BY BOB CLEAVES

As noted in this column previously, and widely documented in California, the Golden State forests are in a state of emergency. More than 100 million trees across California, many located in the federally managed Sierra, Stanislaus and Sequoia National Forests, are dead, owing to a years-long drought and a nasty bark beetle infestation. As many as 90,000 acres in the state qualify as high-hazard zones, with trees ready to topple over or catch fire, posing significant risk to residents, tourists, homes and infrastructure. Some of the hardest-hit areas have as many as 14,000 dead trees per square mile. On top of that, the U.S. Forest Service budget that could contribute to clearing out lands in the highest risk areas is increasingly consumed with fighting fires. More than half its 2016 budget—well over $1 billion—went toward fire suppression. The forest service projected in 2015 that, through 2025, its budget for fire suppression would rise to an average of $1.8 billion annually. The urgency and frequency of fighting fires has created a difficult cycle for the forest service, in which resources that could go toward management and prevention must be used for emergency purposes, thus reducing the ability of the agency to prevent the costly emergency to begin with. On the other hand, the fleet of nearly 30 California biomass facilities is facing its own challenges. Natural gas prices continue to stay attractively low for utilities, at a time when many biomass facilities are seeing their PURPA contracts and federal production tax credits come to an end. Some of these facilities are located close to the highhazard zones and are well positioned to take on the hazardous fuel cleared from the forests. Some of them are even obligated, through the state’s BioRAM program, to use forestry residues as a significant portion of their fuel. As with the other types of fuel they use, these biomass facilities expect to pay for fuel removed from federal lands, or at the very least, chip in for transportation costs. The Biomass Power Association is working with the U.S. Forest Service to develop a detailed plan that we can

8 BIOMASS MAGAZINE | APRIL 2017

present to Congress to involve biomass in solving some of the forestry problems in California and other areas. Our plan will include some of the following elements: • Fully fund the U.S. Forest Service. For too long, the agency’s budget has been dedicated to fire suppression rather than management, and there must be an alternative budget for natural disasters like wildfires. • Allow the U.S. Forest Service to value hazardous fuel in a way that enables the agency to “sell” it at a low or no cost. Current regulations state that timber produced from federal lands must be sold at market value. There should be a way to work around that when it comes to removing hazardous fuels. • Put systems in place to manage forests for prevention, rather than suppression in the future. Setting aside the urgent tree mortality crisis in California at the moment, federal lands will continue to require management and biomass facilities can take on residues from tree and timber removal. California forests have a clear problem (millions of dead trees that need to be removed) and a solution (biomass facilities that can take on hazardous fuel for a productive use, and share in the expense). The obstacle is, as usual, funding. It’s expensive to cut down dead trees, chip them up, and haul them out of the forests to biomass facilities that are located dozens or hundreds of miles away. It’s never easy to secure additional funding for a federal agency. Even in the friendliest political climate—far from the dividedness we are experiencing in 2017—it’s a long, arduous process that involves many committees, constituencies and competing priorities. However, we believe there’s a sensible and workable solution and that the biomass industry should play a vital role in forest management. Author: Bob Cleaves President, Biomass Power Association bob@usabiomass.org www.usabiomass.org

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Providing Clarity of Industry Terminology BY MARCUS GILLETTE

“A definition is the enclosing a wilderness of idea within a wall of words.” Samuel Butler, 19th Century English author and poet. Accomplished writers seem to cast a negative, narrow view on labeling terms with precise definitions. I respectfully disagree with that perspective, especially considering Oxford Dictionaries’ recently named “post-truth,” the 2016 word of the year. Definition of industry terminology matters in our sustainable biomass and bioenergy industries. Allow me to explain. I work for the Coalition for Renewable Natural Gas, representing the interests of the renewable natural gas (RNG) industry in North America. Having said that, whether you realize it or not, your understanding of what you just read (who I work for) may very well differ from another reader of this article on the other side of the country or across an ocean, or even from your fellow industry colleague in the office next door to you. I have listened to speakers and watched presenters haphazardly substitute one industry term for another, as they move from one presentation slide to the next, leaving behind a bewildered audience. I have been in the middle of conversations with a new industry contact for up to half an hour before we realized that we were essentially speaking separate languages by using different industry terms to convey similar ideas. I know I’m not alone in this; colleagues have recounted similar stories. Definitions matter. They provide clarity. Accurate communication and understanding result in effective conversations and facilitate efficient business dealings, especially in what is considered a post-truth era. This is evidently even more relevant to those of us working in growing, niche industries, as we frequently battle to overcome misunderstanding. For example, meetings with regulatory agencies and with offices on Capitol Hill have not infrequently required rabbit trails to correct misunderstandings. “Don’t bioenergy, biogas and renewable natural gas refer to the same thing?” To prevent future confusion, to save you future time and perhaps even future profits, the RNG Coalition and the American Biogas Council have collaborated in recent months in order to bring clarity to those working in North America whose roles cross over into the biogas and RNG industries (and any biomass, waste to energy, or connected policy and regulatory position). We have drafted, vetted and come together to put forth the following agreed upon definitions. • Biogas is “a mixture of carbon dioxide (CO2) and hydrocarbons, primarily methane (CH4) gas, from the biological decomposition of organic materials.” • Syngas is “a gas mixture composed primarily of hydrogen (H2) and carbon monoxide (CO), along with hydrocarbons from the thermochemical decomposition of organic or inorganic materials.” 10 BIOMASS MAGAZINE | APRIL 2017

• Conditioned biogas is “medium-Btu biogas that is stripped of some trace contaminants and water, but maintains the relative mix of CO2 and CH4.” • Biomethane is “biogas-derived, high-Btu gas that is predominately methane after the biogas is upgraded to remove most of the contaminants and a majority of the CO2 and nitrogen (N2) found in biogas.” • RNG is “biomethane that is upgraded to natural gas pipeline quality standards such that it may blend with, or substitute for, geologic natural gas.” * • Renewable compressed natural gas (R-CNG) is “RNG that is compressed to a high pressure, often for use as a transportation fuel.” • Renewable liquefied natural gas (R-LNG) is “RNG that is converted to liquid form, often for use as a transportation fuel.” The distinctions in these definitions are important for regulatory bodies and policymakers to understand, especially as biogas, including landfill gas, is increasingly upgraded to biomethane for injection into natural gas pipelines as RNG, and eventually used as a transportation fuel in the form of R-CNG or R-LNG. While some natural gas pipelines have received RNG for decades, a number of pipelines are exploring, for the first time, how to make these interconnections feasible. The language used in pipeline interconnection agreements and pipeline gas specifications is critical. Studies on, or testing of, a raw biogas will show much different results as to constituent makeup and characteristics of biomethane, which has been cleaned and conditioned by natural gas treatment technologies. Imprecise or incorrect use of one term in place of another can thus prevent sustainable gas from a landfill or anaerobic digestion facility from meeting a prescribed specification and reaching its highest and best use. Providing precise definitions of terms can have positive impact beyond ensuring a clearly understood conversation or a well-educated audience. Using the same terminologies to enable the same comprehension of industry definitions in legal contracts, regulatory documents, and in drafting policy language could prevent legal issues and be critical in preserving the company’s bottom line. Socrates is credited with saying that, “The beginning of wisdom is the definition of terms.” As an industry, we should further adopt this wisdom by standardizing and embracing these definitions. Author: Marcus Gillette Director of Public & Government Affairs, Coalition for Renewable Natural Gas 916.588.3033 x3 marcus@rngcoalition.com *The American Biogas Council adds “including odorization.”

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Expanding Wood Heat in New England BY BILL BELL

“They would not listen; they did not know how. Perhaps they’ll listen now…” (Starry Starry Night, Don McLean, 1971) As previously outlined in this column, last year’s closure of a number of Maine’s paper mills and biomass electric facilities has given rise to a number of initiatives designed to stem, and then reverse the tide. These initiatives are now being placed on the table. Which will succeed? First—what about homeowners? The nonprofit Northern Forest Center, serving northern New England and upstate New York, now acknowledges that there have been “significant investments in the modern wood heat economy, but consumer demand hasn’t yet responded in kind.” The center is therefore undertaking “a collective marketing effort” to generate such demand. Branding and creative materials are being developed to feed homeowners into a persuasive and informative website. Communities with favorable demographics (affluent and older folks) will be especially targeted with appeals to environmental and “heat local” considerations. Perhaps even more helpful will be the recent study—commissioned by the NFC but coauthored by John Gunn, who, at times, is a sharp critic of biomass energy—that points out that heating with pellets from northern New England’s mills will immediately cut greenhouse gas emissions by over 50 percent when compared to heating with oil or natural gas. The NFC is working with environmental groups, particularly local chapters of the Nature Conservancy, to counteract generalist attacks on biomass energy such as the recent Chatham House “study.” While converting homeowners to modern wood heat is one of the most important components to expansion of our Maine pellet fuels industry, it is also proving a very elusive target. Two years ago, the $5,000 Efficiency Maine incentive, supporting installation of a residential pellet boiler, was producing an average of one installation a day. This winter, despite the fact that the per-Btu price of heating oil now exceeds that of wood pellets, there are very few takers. In fact, the number of homeowners using the $500 incentive for installation of a pellet stove exceeds the pellet boiler installs. Focus has shifted to larger-scale biomass heating projects. Key Maine legislators have joined in sponsorship of a $25 million biomass bond issue. Two-thirds of the amount would promote combined-heat-andpower (CHP) biomass generation, with only a third of this amount to go toward thermal biomass boilers, and 12 BIOMASS MAGAZINE | APRIL 2017

these would be in public buildings and commercial facilities. The top priority of Maine Biomass Study Commission, whose recommendations are currently being drafted into proposed legislation, is establishment of a renewable energy credit for thermal biomass, which, in neighboring New Hampshire, is benefiting larger users, not homeowners. The work of Maine’s Wood Energy Team, established with a U.S. Forest Service grant administered by the Maine Forest Service, will be directed toward converting schools and other public buildings, not residences, to modern wood heat. Again, this follows the example set by New Hampshire, where the NH Wood Energy Council notes that recent wood heat projects in schools, hospitals, and businesses generated $35 million in economic benefits to the state’s citizens and communities in 2015. Maine’s shift in emphasis from homes to larger projects is, in part, a reflection of home economics versus capital investment. The concept of “eat local,” driving a boom in restaurants in Vermont and Maine, which source food from nearby farmers, works well with folks making a $40 dinner decision. When deciding on a $20,000 home heating system, “heat local” is a weightier undertaking. Homeowners are far more inclined to muddle through with an aging oil burner, hoping for another mild winter, than are schools, hospitals, and businesses taking a longer outlook. The real driving force, however, is the need to maintain the infrastructure of Maine’s currently struggling forest economy. Loggers desperately need ongoing work. Sawmills need outlets for over 500,000 annual tons of chips and sawdust previously sold to the paper mills and biomass electric facilities that have closed their doors. CHP projects, or at least many large buildings, converting to biomass heating will have a far greater impact on the forest industry—Maine’s No. 2 economic driver, after tourism—than homeowners converting. The proof of this shift is found not just among planners and politicians, but where it really counts: in the marketplace. Maine Energy Systems, generally recognized in Maine as the leader in residential pellet heating systems, is about to introduce into New England a CHP system of its own, the OkeFEN cogen pellet boiler, which will provide electricity and heat to larger buildings. Author: Bill Bell Executive Director, Maine Pellet Fuels Association billb@mepfa.org www.mainepelletheat.com

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Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

Niziolek joins Morbark senior management team Morbark, manufacturer of equipment used in forestry, recycling, tree care, Niziolek landscaping, sawmill and biomass markets, has appointed Walt Niziolek as the new vice president of operations and supply chain. Niziolek joins Morbark at a time of continued business growth to take charge of supply chain and site operational requirements, which include managing local, U.S. and overseas vendors and suppliers, all warehouse and distribution activities, quality initiatives and liaising with business unit engineering support. Niziolek’s extensive expertise includes holding many previous senior leadership roles in manufacturing with companies

such as CPG Building Products and Pride Mobility Products, where he specialized in deploying standardized work and other lean initiatives to improve safety, quality, delivery, supply chain management and cost. Prior to his 20-plus years in manufacturing operations, Niziolek served as a captain in the U.S. Army, where he held multiple leadership and staff positions, both in peacetime and periods of conflict. Mid-South opens New England office Mid-South Engineering Co., an Arkansas-based, full service consulting engineering firm, announced the opening of its fourth office located in Orono, Maine. The new office, led by Walter Goodine, director of operations, allows Mid-South to better respond to its clients’ engineering needs in New England and Maritime Provinces. Orono, the home of the University of Maine, is just north of Bangor. “The addition of this

location supports our firm’s commitment to build on the success we have seen in the New England area,” stated Jeff Stephens, Mid-South president. “The new office location is convenient to the building products, paper and bio-energy markets we serve and provides ready access to the professional talent to grow our staff.” Alliance promotes Slager Alliance BioEnergy Plus Inc. has elevated Vice President of Business Development Benjamin Slager to the position of chief technology officer. Slager’s new responsibilities include working with the development team at Ek Laboratories on implementing the CTS process at company-owned plants as well as licensees; identifying and exploring ancillary product pathways for the CTS process, and ensuring that the company is making the best use of its intellectual properties and processes. Slager joined the company in August 2016 as a consultant, eventually be-

BUSINESS BRIEFS¦

came a board member, has vast experience better boiler efficiency is enabled by the conin technology development, deployment and tinuous indication of heating value to opticommercialization. mize fuel feeding control and supplementary fuel use. Valmet CBA replaces oven dry laboratory measurements by utilizing microwave technology to continuously measure chip, bark, forest residue biomass or recycled wood moisture. A sample flow is taken from the conveyer chute, pushed through the unobstructed measurement chamber and then returned to the chute. Disturbances that affect conveyor-mounted instruments have PHOTO: VALMET been eliminated with the innovative design Valmet introduces online analyzer and measurement concept. for wood chip, bark moisture Valmet recently introduced the Valmet EnviTech optimizes thermal Chip 'n' Bark Moisture Analyzer, which of- pressure hydrolysis An optimized thermal pressure hydrofers pulp mills a new tool to advance productivity and efficiency. Continuously measur- lysis (TDH) process from the research and ing wood chip moisture provides the means development division of EnviTec Biogas to accurately control cooking liquor-to-chip utilizes high pressures and temperatures to mass ratio for improved digester operation. digest biomass even more effectively. Apart When applied to monitor biomass moisture, from a long-term increase in gas yield, which

can range from 10 percent to over 60 percent when renewable raw materials are used, the process also facilitates the use of substrates that have to date been unsuitable for use in biogas plants. “Previously, thermal pressure hydrolysis was used with the input materials—i.e., the matter,” explained Jürgen Tenbrink, CTO of EnviTech. “This is a hugely involved process, however, since the additional mashing means additional heating or cooling is required, depending on the type of hydrolyzed material.” Handling unwanted materials adds to the effort, but EnviTec’s method skips this step, as the process targets only the difficult-todegrade raw fiber from the biogas process. Since the technique doesn’t involve any input mashing, heating requirements are reduced. Other advantages include the exclusion of unwanted material, as well as lower throughput. “Operators can make considerable savings thanks to the more cost-effective use

The impact can be devastating and long lasting, including physical injury to workers and destruction of process equipment resulting in loss of productivity, fines, higher insurance rates and negative publicity. We can assist you in developing a comprehensive protection solution to keep your operation in compliance with OSHA as well as state regulations. IEP Technologies is the most experienced explosion protection company in the world. Our engineers start by understanding your process, reviewing your DHA and testing process materials if necessary. Then we apply the right solution to meet your unique requirements including a combination of suppression, isolation and venting systems. Count on IEP Technologies to protect your process against explosions and keep your plant in compliance… and on-line.

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16 BIOMASS MAGAZINE | APRIL 2017

ÂŚBUSINESS BRIEFS

of difficult-to-digest inputs like solid manure,â&#x20AC;? Tenbrink added. Depending on the project, input costs can be cut by as much as 35 percent or more, according to EnviTech. Advanced Cyclone Systems makes first North American biomass installation Advanced Cyclone Systems S.A. designed and supplied a Hurricane Cyclone System for KMW Energy, an engineering consulting company and equipment manufacturer of biomass energy solutions from Ontario, Canada. The system, ACSâ&#x20AC;&#x2122;s first biomass boiler installation in North America, was installed at Produtis Forestiers D.G.â&#x20AC;&#x2122;s IMAGE: ADVANCED CYCLONE SYSTEMS softwood lumber processing plant in Quebec, Canada. The current emission legislation in Quebec, Canada made it mandatory for biomass boilers less than 3 MW to curb emissions below 150 milligrams (mg) per dry cubed meter at 7 percent O2. Until recent, most of the smaller biomass boilers were able to meet emission limits with just multicyclones. The new emissions limit value left a lot of end users in need of a compact, efficient and economical system to reach the new mandatory values. ACS was contacted by KMW Energy to design a system for Produits Forestiers D.G.â&#x20AC;&#x2122;s bark biomass boiler to meet emissions limits. Consulair, an emission testing company from Quebec, Canada, confirmed that all test results ensure PM emission compliance for the DG plant with an ACS cyclone system. TTcogen hires Gray to lead biofuel CHP effort TTcogen LLC, a 50/50 joint venture of combined heat and power (CHP) company Tecogen Inc. and TEDOM a.s., announced the hiring of Walter Gray III to lead the development of biofuelpowered CHP projects as director of business development. He has more than 14 years of international project development, business development and environmental finance experience in the utility-scale renewable and distributed generation markets. Most recently the CEO and Founder of Enthalpic Capital, Gray was focused on developing a portfolio of waste heat, biogas, biomass and cogeneration projects in the U.S. and Mexico. Prior to founding Enthalpic Capital, Gray led project development initiatives at Neoen in Jamaica, and E.ON Climate and Renewables in Singapore. He also has experience in environmental

finance, having served as country director of Thailand for EcoSecurities, where he led origination activities for emission reduction purchase agreements under the Kyoto Protocol, while also leading project development for biogas projects in Southeast Asia. QED announces Landtec Biogas 3000 fixed gas analyzer QED Environmental Systems has announced the new Landtech Biogas 3000, a next-generation, fixed-gas analyzer that offers optimal continuous monitoring of the complete gas production process. Building PHOTO: QED on field-proven gas analysis technology, the compact, self-contained Biogas 3000 system offers cost-effective online monitoring that is ideal for anaerobic digestion, biogas monitoring, and landfill gas monitoring applications. The Biogas 3000 can use up to four sample ports to monitor methane, carbon dioxide, and oxygen, with optional monitoring of hydrogen sulfide, hydrogen and carbon monoxide levels—operators can choose up to five gases to monitor. The device features easy self-installation and maintenance. In addition, QED provides a temporary replacement unit, resulting in zero operational downtime for servicing. The Biogas 3000 offers simple user calibration and an easy-to-operate system. It is calibrated to ISO/IEC 17025 standards for optimum accuracy. Eggersmann Group acquires biological drying technology The trademarked Bio-Dry, a well-established biological drying technology of Convaero, is being integrated via an asset deal into the portfolio of the Eggersmann Group with immediate effect. The contracts on the future cooperation were signed March 2. The Eggersmann Group, located in Marienfeld, Germany, is known for its decades-long experience in the field of mechanicalbiological waste treatment. Labelled with the brands Kompoferm and Bekon, the quickly expanding plant constructor has developed and successfully established numerous dry fermentation waste treatment sites. “The Bio-Dry technology now allows us to enter new markets in countries with limited financial strength, but where waste volumes and energy demand are growing substantially,” said Karlgünter Eggersmann, CEO of Eggersmann Group. “For such market conditions the Bio-Dry system of Convaero provides the optimal solution, namely the biological drying of municipal solid waste for the production of alternative fuel.” APRIL 2017 | BIOMASS MAGAZINE 17

¦BUSINESS BRIEFS

Roeslein Alternative Energy opens Missouri project office Roeslein Alternative Energy is proud to announce the opening of a project office in Milan, Missouri. This office will be the home of RAE for the next 12 months as it works with residents in northern Missouri to expand its hog waste-to-renewable natural gas project (RNG). This office will be a resource for RAE employees and will allow area residents to interact with the RAE team. RAE representatives will be accepting appointments and walk-ins from landowners and residents who may have questions or concerns about the expansion of their current project. In 2014, Roeslein Alternative Energy partnered with Smithfield Hog Production of Missouri, placing impermeable covers over their hog manure lagoons to create and capture methane gas using a process called anaerobic digestion. The captured methane is dried and cleaned and then injected into the national pipeline, where it is sold to customers throughout the U.S.

PHOTO: DRAX

Drax picks Quintiq for supply chain optimization Power station operator Drax has implemented Quintiq’s supply chain planning and optimization system to handle transport and storage of some 7.5 million tons of biomass every year. Drax operates the largest power station in the United Kingdom and supplies up to 8 percent of the country’s electricity needs. It converted from burning all coal into a predominantly biomassfueled electricity generator. Prior to Quintiq, Drax handled the transport and storage of 7.5 million tons of biomass annually through spreadsheets. This planning method was unable to support Drax’s business goals as it sought to diversify and grow its operations. Drax required a solution that would not only handle its current supply chain puzzle, but also have the flexibility to scale up as the company grew in both scope and complexity. Together with consultancy Crimson & Co., Drax searched for a solution that would facilitate the cost-effective purchase, storage and management of the biomass and coal needed for the operation of its power station. A stringent selection exercise was conducted encompassing case studies, reviews of live supply chain

18 BIOMASS MAGAZINE | APRIL 2017

planning solutions, site visits and data analysis and scenario testing to compare systems and solution providers. Within three months of signing the deal in January 2016, Quintiq had developed a prototype that showcased a 95 percent working system for ports. After a smooth implementation process, the full solution went live in September 2016. Crossley receives NSF Early Career Award Steven Crossley, professor at University of Oklahoma Gallogly College of Engineering, is the recipient of a five-year, National Science Foundation Early Career Award in the amount of $548,829 for research that can be used to understand catalysts that are Crossley important for a broad range of chemical reactions ranging from the production of renewable fuels and chemicals for natural gas processing. The research will be integrated with educational and outreach programs intended for American Indian students, emphasizing the importance of sustainable energy. "The NSF CAREER award is partly in recognition of the important work that Steve has already done in the field of catalysis,” said Brian Grady, director of the OU School of Chemical, Biological and Materials Engineering. “It is one of the highest honors a young faculty member can receive. We look forward to him doing great things in the future.” Crossley, an assistant professor in the OU School of Chemical, Biological and Materials Engineering, is also a faculty mentor for the American Indian Science and Engineering Society. The project will provide a detailed understanding of active sites and atom transfer processes involved in catalytic conversion of bio-oil molecules derived from biomass. Biotech Energy partners with Clinton Community College In January, Biotech Energy Inc. and Clinton Community College were accepted into the Start-Up New York program. As participants in the program, Biotech and Clinton Community College have entered into a new strategic partnership arrangement that will focus on developing new curriculum and programs at the college to enhance the educational opportunities for its students, and to support the growing biomass energy industry. The strategic move is in response to the growth and development of Biotech's business within the Northeast U.S. The new corporate office, located on the college campus, is ideally situated to manage and support the growth of Biotech’s exclusive distributors, authorized dealers and biomass projects throughout the Northeast, while engaging students in hands-on, interactive learning activities in an actual business environment. Biotech plans to assume occupancy of its new office beginning in April.

APRIL 2017 | BIOMASS MAGAZINE 19

¦CONSTRUCTION UPDATE Biomass Power

Pellets

Biogas

Thermal

Advanced Biofuel

The conversion of Dong Energy's Skærbæk Power Station from coal to wood chips is ongoing, and should be complete by the fall. PHOTO: DONG ENERGY

20 BIOMASS MAGAZINE | APRIL 2017

CONSTRUCTION UPDATE¦

Biomass CONSTRUCTION UPDATE April Shovels Bring May Piling by Anna Simet

Spring has arrived. Some crews worked through winter and will continue business as usual, others are eager for the thaw to give way to shovels and excavators, and some are proceeding with caution under a new president, waiting out forthcoming changes that might affect their businesses. In the U.S., biogas is booming, and projects of all kinds—from dairies in the west and east, to wastewater treatment plants, to organic waste collection facilities—are underway to produce power, heat, and renewable natural gas for the pipeline or transportation vehicles. The nine projects featured in spring Biomass Construction Update are in various stages of construction, with some having just started, and others readying to fire up. Europe continues its ambitious carbonemission reduction efforts with the construction and conversion of numerous large-scale plants, many more beyond those featured in this BCU.

Dong Energy recently announced it plans to be coal free by 2020, and with the conversions of its Avedøre, Studstrup power stations—and soon, completion of Skærbæk—it will leave the utility with two outstanding coal plants, both of which hold potential for additional conversions. The North American wood pellet export industry has been watching and waiting for the Lynemouth Power Station conversion, which, after some delays, is finally underway. When complete, the plant will lead to a demand of up to 1.8 million metric tons of wood pellets annually. As pictured, construction of a facility to handle, store and transport the wood pellets is underway at the Port of Tyne, a project contracted to Spencer Group. After arriving at the port via ship, the project will enable wood pellets to be conveyed mechanically to one of three newly built silos, each capable of storing 25,000 metric tons. Pellets will be discharged from the silos via two conveying streams to

the rail-loading facility to take the material to Lynemouth Power Station by train. While the most recent editions of BCUD saw some large-scale pellet plants finish construction and begin commissioning— Highlight Pellets in Pine Bluff, Arkansas, and The Navigator Company's Colombo Energy plant in Greenwood County, South Carolina— new pellet plant construction in the U.S. seems to be paused while imminent federal policy and regulatory changes are made, and market conditions continue rebounding. Some acquisition activity may be in store in the near future—most recently, Drax announced it had made bids to acquire German Pellets’ Louisiana and Texas plants, which have a combined annual capacity of over 1 million metric tons. If you would like your project featured in the fall BCU, email asimet@bbiinternational.com.

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APRIL 2017 | BIOMASS MAGAZINE 21

¦CONSTRUCTION UPDATE Biomass Power

Pellets

Biogas

Thermal

Advanced Biofuel

Editor's note: Data lines left blank indicates inapplicability, information was unavailable or project developer chose not to disclose.

North Fork Community Power Location

North Fork, California

Engineer/builder

Phoenix Energy

Primary fuel

Forest biomass/thinnings

Combustion technology

GE gasifier/jenbaucher engine

Nameplate capacity

2 MW

Combined heat and power

Government incentives

$4.9 million California Energy Commission EPIC grant; $900,000 in New Markets Tax Credit financing.

IPP/Utility

IPP

Groundbreaking date

November 2016

Start-up date

Phase 1: June 2017

TEES RENEWABLE ENERGY PLANT PHOTO: MGT POWER

After a shipping delay, equipment is expected to arrive on-site this spring, with project commissioning before the end of the year.

Port Clarence Renewable Energy Plant Location

Teesside, North East England, U.K.

Engineer/builder

Babcock & Wilcox Volund, Lagan Construction Group Project manager: Parsons

Primary fuel

Wood chips

Combustion technology

B&W boiler system with DynaGrate fuel combustion

Nameplate capacity

40 MW

Combined heat and power

Yes

Government incentives IPP/Utility

IPP

Groundbreaking date

December 2015

Start-up date

Q1 2018

Under contract Stobart will source, process and supply 250,000 metric tons of recycled waste wood to the plant annually for 14 years, equating to 3.5 million metric tons over the life of the agreement.

Tees Renewable Energy plant Location

Middlesbrough, North East England, U.K.

Engineer/builder

Consortium of Tecnicas Reunidas of Spain and Samsung Construction and Trading (SCT) of South Korea.

Primary fuel

Wood pellets, wood chips

Combustion technology

Foster Wheeler circulating fluidized bed steam generator

Nameplate capacity

299 MWe

Combined heat and power

Yes

Government incentives

U.K. government Contract for Difference

IPP/Utility

IPP

Groundbreaking date

Q4 2016

Start-up date

2020

Foundations, excavations and piling are underway. Fortum will run the plant under a 10-year O&M agreement.

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CONSTRUCTION UPDATE¦

PORT OF TYNE WOOD PELLET STORAGE FACILITY

COVANTA ENERGY CORP.

PHOTO: SPENCER GROUP

PHOTO: COVANTA

Lynemouth Power Station (Conversion)

Dublin Waste-to-Energy Ltd.

Location

Ashington, Northumberland, U.K.

Location

Poolbeg, Dublin, Ireland

Engineer/builder

Doosan Babcock

Engineer/builder

Covanta Energy Corp.

Primary fuel

1.4 million metric tons of wood pellets annually

Primary fuel

Municipal solid waste

Combustion technology

3 internal combustion pulverized fuel boilers, Doosan Babcock low-NOx biomass burners

Combustion technology

Duro Dakovic steam boiler

Nameplate capacity

390 MW

Nameplate capacity

58 MW

Combined heat and power

Government incentives

U.K. government Contract for Difference

Government incentives

Ireland’s renewable feed-in tariff

IPP/utility

IPP

IPP/utility

IPP

Groundbreaking date

Q2 2016

Groundbreaking date

Q4 2014

Start-up date

Late 2017/early 2018

Start-up date

2017

Refurbishment activities within the boiler house are well underway. Three major silos have been erected by Spencer Group at the Port of Tyne, each 118 feet tall and 147 feet in diameter. The silos are being topped off with “penthouse” structures housing the drive mechanism for the wood pellet conveyor system.

Construction of the plant is complete. As of March 16, first firing had not yet occured. Covanta's target is to reach full commercial operations by start of Q4 2017.

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APRIL 2017 | BIOMASS MAGAZINE 23

ÂŚCONSTRUCTION UPDATE Biomass Power

Pellets

Biogas

Thermal

Advanced Biofuel

Chip Energy Inc.

Surrey Organic Biofuel Facility

Location

Goodfield, Illinois

Location

Surrey, British Columbia

Owner

Chip Energy

Owner

Shanks Group

Design/builder

Chip Energy

Engineer/builder

Design: Orgaworld Canada, contractor: Smith Bros & Wilson, engineer: Waste Treatment Technologies-NL

Substrate(s)

115,000 metric tons of organic waste annually

Digester type/technology

Orgaworldâ&#x20AC;&#x2122;s Biocel, dry AD

Export port Export location Product/s

Pellets, briquettes and logs

Annual capacity

36,500 metric tons

Feedstock

Waste wood, energy crops, agricultural residue

Groundbreaking date

2013

Start-up date

Late 2017

Work is proceeding slower than initially anticipated, but the project is still moving forward, with aims to be producing some pellets by the year's end.

Engine type/upgrading technology Biogas end use

RNG, heat

Power capacity

N/A

Groundbreaking date

Q1 2015

Start-up date

Spring 2017

C2e Renewables NC Location

Warsaw, North Carolina

Owner

Carbon Cycle Energy

Engineer/builder

EPC contractor: Swinerton Builders

Substrate(s)

Verwey-Madera Dairy Digester Location

Madera, California

Owner

Philip Verwey

Hog, chicken and food waste

Engineer/builder

Maas Energy Works Inc.

Substrate(s)

Dairy manure

Engine type/upgrading technology

DMT Clear Gas Solutions, membrane-based gas separation technology

Digester type/technology

Covered lagoon

Engine type

Dresser-Rand ICE

Biogas end use

Renewable natural gas

Biogas end use

Electricity

Digester type/technology

Power/thermal capacity

Power capacity

1.4 MW

Groundbreaking date

February 2017

Groundbreaking date

Q1 2016

Start-up date

Q2 2017

Start-up date

Q2 2017

Swinerton broke ground on the project in February. It is expected to take 16 months to complete. RNG will be sold to Duke Energy and an unnamed customer.

24 BIOMASS MAGAZINE | APRIL 2017

The digester will be complete this summer, and will process the manure from the dairy's milking cows to power pumps, wells, and equipment.

CONSTRUCTION UPDATEÂ¦

Quantum Biopower Southington

AMERESCO GROUNDBREAKING PHOTO: CITY OF PHOENIX

Location

Southington, Connecticut

Owner

Quantum Biopower

Engineer/builder

Quantum Biopower

Substrate(s)

Food waste

Digester type/technology

Low solids, wet fermentation

Engine type/upgrading technology

2G Ceneragy CHP engine

Biogas end use

Electricity

Power/thermal capacity

1.2 MW

Groundbreaking date

June 2016

Start-up date

December 2016.

The plant is currently taking in food waste. Biogas is being flared until the generators are fired up late April or early May.

Edmonton Waste Management Centre Anaerobic Digester

Ameresco/City of Phoenix Phoenix, Arizona

Location

Edmonton, Alberta

Owner

Ameresco Inc.

Owner

City of Edmonton, University of Alberta

Engineer/builder

Ameresco Inc.

Engineer/builder

BioFERM

Wastewater sludge

Substrate(s)

Organic waste

Digester type/technology

BIOFerm high-solids, dry fermentation

Engine type/upgrading technology

Ameresco gas conditioning system

Engine type/technology

Biogas end use

Pipeline RNG

Location

Substrate(s)

Power/thermal capacity Groundbreaking date

February 2017

Start-up date

Late 2017

Biogas end use

Power and heat

Power/thermal capacity

1.426 MW electrical capacity, 1.5 MW thermal

Groundbreaking date Start-up date

First half of 2018

With a project capacity of 3,250 standard cubic feet per minute, the RNG facility is expected to be largest of its kind in the U.S.

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Â¦CONSTRUCTION UPDATE Lamb Lakeshore Dairy

Quantum Biopower Southington

Location

Wilson, New York

Location

Tipton, California

Owner

Lamb Lakeshore Dairy

Owner

Greg TeVelde

Engineer/builder

Envitech

Engineer/builder

Maas Energy Works Inc.

Substrate(s)

Manure

Substrate(s)

Dairy manure

Digester type/technology

Complete mix

Digester type/technology

Covered lagoon

Engine type/technology

GE Jenbaucher engine

Engine type

Dresser-Rand ICE

Biogas end use

Electricity and heat

Biogas end use

Electricity

Power/thermal capacity

570-kW CHP

Power capacity

800 kW

Groundbreaking date

April. 2016

Groundbreaking date

Q1 2016

Start-up date

March/April 2017

Start-up date

Q2 2017

The facility has been flaring gas and is currently undergoing comissioning. The project received a $1.75 million NYSERDA grant and a $500,000 USDA grant.

Recipient of a USDA Rural Energy for American Program grant, the project will be complete this summer. Diamond Green Diesel (Expansion)

Adirondack Dairy Farm Location

Peru, New York

Owner

Adirondack Dairy Farm

Engineer/builder

Envitech

Substrate(s)

Manure

Digester type/technology

Complete mix

Engine type/technology

Guascor

Biogas end use

Electricity and heat

Power/thermal capacity

633-kW CHP

Groundbreaking date

Early 2016

Start-up date

March/April 2017

This farm, milking approximately 2,300 Holsteins, received a $2 million NYSERDA grant to help finance the project.

Location

Norco, Louisiana

Design/builder Process technology

UOP/Eni Ecofining Process

Biofuel/biochemical product(s)

Renewable diesel

Feedstock

Rendered fats, oils and greases

Production capacity

160 MMgy to 275 Mmgy

Type of RINs

Coproducts

Naptha, liquid petroleum gas

Groundbreaking date

April 2016.

Start-up date

Q4 2017

Plans are to continue to operate the plant at full capacity throughout the expansion phase, excluding up to 30 days of downtime for final tie-ins.

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Biomass Power

Pellets

Biogas

Thermal

Advanced Biofuel

Goddard College

UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN ENERGY FARM PHOTO: UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN

University of Illinois at Urbana-Champaign Energy Farm Location

Urbana, Illinois

Engineer/builder

Location

Plainfield, Vermont

Engineer/builder

Community Biomass Systems (general contractor)

Primary fuel

Wood chips

Boiler type

Messersmith

Nameplate thermal capacity

3 MMBtu

Heat enduse

Central heating

Government incentives/grants

2.1 million USDA community facilities loan

Groundbreaking date

Q1 2017

Start-up date

Fall 2017

Plans were to begin construction as soon as the ground thaws, and for the system to become functional in the fall. Skærbæk Power Station, Dong Energy (Conversion)

Location

Kolding, Denmark

Engineer/builder

B&W Vollund

Primary fuel

Wood chips

Boiler type

B&W Vollund fluidized bed

Nameplate thermal capacity

280 MWth

Heat enduse

District heat and electricity

Primary fuel

Chopped perennial grasses, wood chips, sawdust

Boiler type

Heizomat chain drag boiler, 198-kW

Nameplate thermal capacity

675,000 Btu per hour

Heat enduse

Hot water district heating

Government incentives/grants

Illinois Clean Energy Community Foundation, UI Student Sustainability Committee, UI Dudley Smith Initiative, carbon credits

Groundbreaking date

September 2014

Groundbreaking date

Q3 2016

Start-up date

2017

Start-up date

March 2017

Start-up date

Q4 2015

In addition to the boiler, the boiler house contains a Järnforsen cyclone particulate separator for flue gases and two, 1,000-gallon thermal storage tanks. The installation is complete, and first firing of the boiler was scheduled for March 23.

Government incentives/grants

Opening of the converted plant will take place in 2017. It is expected to be fully operational by the 2017-´18 heating season.

APRIL 2017 | BIOMASS MAGAZINE 27

28 BIOMASS MAGAZINE | APRIL 2017

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Sustaining Maine’s Legacy Efforts to reinvigorate the state’s biomass industry—including fiber export projects—are saving and generating jobs while boosting Maine’s economy. BY ANNA SIMET

or Maine’s forest products industry, 2016 was a tough year. It was also a trying year for the state’s biomass power industry, wood pellet industry, and logging and trucking contractor sectors. With a proper understanding of how sustainable forestry works, and what it means to the Pine Tree State’s economy, it’s easy to connect the dots, and understand the massive ripple effects that a flailing wood fiber industry could inflict. Despite the down year, Maine’s forest products industry contributed an estimated $8.5 billion to the economy statewide in 2016, and supported 33,538 jobs, according to the Maine Forest Products Council. That means one out of every 24 jobs in the state is associated with forest products, and $1 out of every $20 of Maine’s gross domestic product. Taking a broad look at the state’s resources, about 90 percent is forested, more so than any other state, and of that, 95 percent is privately owned and managed. The Maine Forest Service estimates that some 500,000 acres of forest is harvested each year, with about 6 million cords of wood removed. And

still, the wood harvest and forest cover has remained stable. Trees are the livelihood of this industry and many Mainers, therefore, sustainable forest management is a must. Planting, growing, harvesting and delivering wood—on repeat—is a way of life. For many, that way of life has been in turmoil, at least to some degree, over the past year. The effects of in-state end users of wood fiber are disappearing. Numerous pulp and paper mills and several biomass plants have shut down, for a variety of reasons. For paper, it was declining demand and cheaper imports, and for biomass, it was plummeting wholesale energy prices, as well as new out-of-state energy policies. Specifically, Massachusetts, and its new renewable energy portfolio standard efficiencies, which the industry believes are impossible for stand-alone biomass facilities to meet. Very early in the year, the writing was on the wall for a chain of events that would put pressure on state legislators to step in, and also help solidify the case for some fiber export projects that have been in the works for several years. APRIL 2017 | BIOMASS MAGAZINE 29

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In January, setting off initial concerns across the wood products supply chain, Covanta Energy announced it would close its two biomass-fired power plants in Jonesboro and West Enfield, towns that are roughly just 100 miles apart. Shortly thereafter, ReEnergy, which operates four plants in Maine, warned that its Ashland and Fort Fairfield biomass plants were struggling and may be forced to close. In May, Madison Paper Industries was the fifth paper mill in two years to shut down, followed by a November announcement from Verso Paper that it would significantly curtail production at its Androscoggin mill, and lay off nearly 200. Some state legislators known as proponents of Maine’s wood products and biomass industries, such as Sen. Susan Collins, realized the potential implications after the initial few closures in 2017, and began working toward a solution. In a letter to the U.S. Department of Commerce, Collins said that, as a result of these closures, rural communities in Maine “are in the midst of an economic crisis of unprecedented magnitude, creating a situation requiring urgent action…” The industry and its supporters testimony were enough to prompt bipartisan support for a $13.4 million bailout bill passed in April, which, with stipulations, directed the public service commission to initiate a competitive solicitation for contracts as soon as practicable, and directed investor-owned transmission and distribution utilities to enter into one or more two-year contracts for up to 80 MW of biomass energy. Aiding the initiative was another passed bill that, in order to study economic, environmental and energy benefits of Maine’s biomass industry, established a commission consisting of legislators and industry stakeholders. The commission delivered its 70-page report to the legislature in December, including recommendations to assist and encourage further investment in the biomass industry.

Fast forward to this spring. Dana Doran, executive director of the Professional Logging Contractors of Maine, says the bill, which he and his organization were very involved in getting passed, has made a big difference. “Roughly, the Covanta facilities when they were running, and the two ReEnergy facilities, they collectively consumed about 2.5 million tons of biomass, and the pulp and paper mill consumed about 1.5 million tons,” he says. “All told, that was about 4 million tons of biomass that had been consumed in Maine, going away.” The warm 2015-’16 winter and the introduction and full utilization of natural gas by pulp and paper mills has exacerbated the situation, according to Doran. “It led them to use the lowest-cost fuel at the time, and it wasn’t biomass,” he says. Doran says his industry saw biomass utilization reduced by about 50 percent, or 2 million tons per year. “Obviously, that’s a major impact upon our membership,” he says. “They rely upon that as a revenue source—landowners, and sawmills because of their residuals…it’s an entire value chain speed bump that we’ve all been dealing with.” And roughly, in 2016, his members sold fiber at a 15 to 20 percent reduction in the value paid per ton in 2015. But this winter has been better, Doran says. As a result of the bill’s passage, the Covanta facilities were purchased and restarted, and though they aren’t at full utilization, they are buying fuel and operating. “And the [operating] pulp and paper facilities are using more biomass than they were last year,” Doran adds. “I’m not sure what the end result will be—if we’ll be back up to 3 million tons of utilization, or 2.5 million tons, but it goes back to the on-again, off-again utilization of biomass. And certainly, when you cut 50 percent of your market out, it changes business plans for logging and trucking contractors.” Doran underscores the resounding benefits biomass has when compared to any fuel source, indigenous or fossil-fuel based. “It has the greatest economic ben-

SETTING SAIL FROM SEARSPORT: Maine Woods Biomass Exports plans to utilize Maine's Port of Searsport to export heat-treated wood chips to European combined-heat-and-power plants. PHOTO: MAINE WOODS BIOMASS EXPORTS

efit to our state,” he says. “The resource is cultivated here, and the revenue stays circulating within the state. We were very supportive of that legislation, and we were glad to see it happen. ReEnergy has kept all four of its facilities in Maine running after that, and it encouraged those two Covanta facilities to be purchased by Stored Solar, so that’s good news. That funding is leading to sustainability of those plants, and that leads to sustainability of our contractors.” Separate from Maine’s biomass bill are two efforts underway that involve shipping Maine wood fiber overseas for use in European power plants. Doran and the PLCM are also backing those efforts, as they could further expand stakeholder market opportunities and balance out the glut. “We’d really like to see all manufacturing and use here in Maine, and we’ve had that luxury of full utilization of this resource for the past 100 some years, but with all of the challenges we’ve been going through—pulp and paper closures, biomass reductions, saw mill production leaving the state—we need markets,” Doran says. “Now, we’re looking at export markets. Other countries are looking to states like ours that have a forest resource for their needs. I think we’re looking very seriously at [export markets]. If we had our druthers, we’d like to see more manufacturing in the state in Maine and not export

the wood, but we need it. So if there are export market opportunities, whether they are out of Eastport, Searsport, Portland or Bucksport, we’re going be supportive of those, because of the market opportunity.

Opportunity in Eastport

This spring, a ship carrying wood chips will set sail from Maine’s Port of Eastport, its cargo destined for Europe. The Port of Eastport at the heart of, and a partner for, a project by Phyto-Charter, developer of a shipboard wood chip heat treating system. CEO Stephean Chute says it is a solution to a problem that has stymied wood chip exports in the past. “Requirements for treating wood chips changed in Europe, and now they require that wood fiber, in this case its mixed conifer, to be heat-treated to kill pathogens, including the pine nematode,” Chute says. But heat treating itself isn’t necessarily the complication. “You can do that in a dry kiln or a drying plant much like you have on the front end of a pellet mill, but with these regulations, there is a specific timeframe from when you heat treat to when it’s exported,” he says. “It’s a very short window—21 days—so you can’t heat treat and stockpile for months.” Chute says studies that he and his partner, Larry Carrier of logging contractor E.J. Carrier Inc., have done indicate that building a fixed heat-treatment facility

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32 BIOMASS MAGAZINE | APRIL 2017

DECK AND HOLD DEPLOYMENT: This rendering by Player Design shows the layout of Phyto-Charterâ&#x20AC;&#x2122;s shipboard wood chip heat-treating system. PHOTO: PHYTO-CHARTER

at a port would exceed $20 million. â&#x20AC;&#x153;And youâ&#x20AC;&#x2122;re bound by that location and wood basket,â&#x20AC;? he points out. â&#x20AC;&#x153;Our system is completely portable, modular, so you can go anywhere with it. It utilizes the vessel as the containment unit to undertake the heat treating, so donâ&#x20AC;&#x2122;t have to build silos, covered storage or anything. You heat treat at the time you are exporting, and it satisfies the regulatory requirement.â&#x20AC;? In a nutshell, the system deployed in the shipâ&#x20AC;&#x2122;s hold creates a near-airtight chamber, and recirculates the moisture-laden air in a closed loop that includes sensors to measure performance of various components to ensure compliance with applicable codes. The fully saturated air provides an efficient medium of heat transfer through the core of the wood chips. Phyto-Charter developed the system under an all Mainebased commission with the Forest Biomass Research Institute at the University of Maine, Orono; engineers at Nyle Systems of Brewer; Power and Energy Systems of Portland; Farrell and Norton Naval Architects of New Castle; and design/builder Player Design, of Presque Isle. Player Design owner Tyler Player says the project as a whole is unique, but the companyâ&#x20AC;&#x2122;s role is not a far cry from what it typically does. â&#x20AC;&#x153;We do energy systems, rotary drum dryers and thermal transfer systems,â&#x20AC;? he says. â&#x20AC;&#x153;Our responsibility here is to supply the equipment, start it up and make it work. In principal, kind of the same, but the practice is a whole different animalâ&#x20AC;&#x201D;itâ&#x20AC;&#x2122;s a very unique solution to the challenges of shipping biomass from here.â&#x20AC;? Most importantly, the system has received the sign-off by USDA Animal and Plant Health Inspection Service. â&#x20AC;&#x153;To prove this, we went through two layers of evaluation,â&#x20AC;? Chute says. â&#x20AC;&#x153;The first was technical. We developed this in consultation with USDAAPHIS at the University of Maine, and they traveled to the lab

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and testing facilities at the university to observe our prototypes and tests, and provided guidance on scaling up and preparing samples.” The samples, sent to Europe, were awarded phytosanitary certificates, according to Chute, which are mandatory for wood fiber exports into the U.K. and European Union. Likely in April, a ship equipped with the shipboard heat-treatment system and carrying chips, will depart from the Port of Eastport to prove the system at scale, and it couldn’t be setting sail from a more ideal port. The Port of Eastport hosts a depth of 64 feet deep, and departing ships can arrive in Europe two days sooner than from other ports. The Eastport Ports Authority has licensed the technology and will own it, paying Phyto-Charter a royalty for each ton of biomass that is sent through the port and is treated with the system. The Maine Department of Transportation has provided financing of $1.65 million to help complete the project. Another project based on the same premise—heat treating wood chips produced in Maine to prepare them for shipment to overseas—is embracing a slightly different concept, focusing on the Port of Searsport as a shipping point.

Setting Sail in Searsport

Numerous observations drove Maine Biomass Exports Inc. CEO Arthur House to found the company several years ago, including Maine’s massive, mostly privately owned forest resource, two very underutilized deep water ports closer to the European Union than any others in the U.S., nearby rail that was also underutilized, and the major slowdown and decline of the paper industry. “With all of these things going on, it became apparent to me that there was a perfect storm brewing, so I acted on this,” House says. Next to MWBE’s corporate office in Searsport, Maine, is a 10-acre laydown yard at the Port of Searsport. “We acquired site control last year, so we could establish a yard that is capable of handling up to two

vessel shipments at a time,” House explains. “Each vessel load requires about 3.5 acres of wood chip storage space. We have enough for two loads simultaneously, and more than sufficient land for other commodities for export, which include saw logs to China, Turkey, India and parts of the EU.” House says MWBE has multiyear contracts for other fiber export commodities as well, including medium density fiber, sawdust, bark and rough-sawn timbers. At its facility in Millinocket, Maine, built next to the closed Great Northern Paper mill, House says it takes advantage of fiber that comes down that road with no place to go. “In Millinocket, we produce rail road ties for the largest rail tie manufacturer in North America,” he says. “A significant opportunity exists in that we can collect old rail ties throughout Maine and New England regions and process them for export to EU facilities that can cofire the fiber against coal. New rail ties go to the manufacturers; old rail ties come to us in Millinocket, and the life cycle is created.” The Millinocket facility is a 4,000-square-foot site that houses several sawmill rigs, and can produce an average of 250 rail ties per day at full production, according to House. “The building is currently undergoing a redesign of the interior of the structure to accept new equipment in mid- to late spring 2017, and a ramp up of production in early summer,” he says. “We have also been granted our site approvals for the port lay down yard, and we have started site work and infrastructure construction. In Prospect, Maine, we are currently installing a new truck scale for Route 1A for use by all local loggers.” And now, after some initial delays and a site change, MWBE is working on a new facility in Stockton Springs, a 20-acre site that will host a phytosanitation heattreatment operation for processing wood chips. Construction is planned for May, and House expects a 10-month buildout. Primary production at the new facility will fulfill long-term contracts for phyto-

APRIL 2017 | BIOMASS MAGAZINE 33

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sanitized wood chips to combined-heatand-power plants in the U.K. and European markets, according to House, with supplementary production to include nonheattreated, modified density fiber board for a manufacturing facility in Turkey, and an exclusive, 20-year supply contract for raw fiber to a local pellet manufacturing facility. The system is being built by Thompson Dehydrating Company Inc. of Kansas, and MWBE has an engagement letter with

AECOM to become the EPC contracting/ engineering firm of the project. House says the system is USDAAPHIS approved, and, like Phyto-Charter’s system, is built to conform to EU standards for importation of wood fiber from North America. “The significance of a heat treatment process is that it is similar to that of a pasteurization process for raw milk,” House explains. “The constraints placed upon exporting any plant or forest product

into the EU is that it had to be fumigated to protect against the importation of insects, contaminates and other foreign materials that would or could be detrimental to the receiving country. Previously, two processes of fumigation were accepted worldwide— both systems were implemented while the wood chips were being shipped in the vessel holds. This was known as in-transit fumigation, and up until 2015, each of these processes were still approved.” Before regulations changed, House had been investigating heat-treating methods, and discovered Thompson Dehydrating Company, which had already designed a system in use in Canada. “We contracted with them to process a test shipment of Maine wood chips for export to Germany to a major paper manufacturer,” he says. “In September 2014, our test processing was complete. We were approved by the USDA-APHIS agency and given our phytosanitary certificate. The shipment then went to Germany, and we passed all tests by agencies responsible for the approval of wood chip imports.” House emphasizes that the concept behind the fixed heat-treatment plant is that the entire operation relies on the rail line as its feeder system, dramatically cutting transportation costs. “All lines lead to the port of Searsport,” he says. “The driving competitive advantage is that we are on the rail, we rely on suppliers all along the rail, all facilities operated by MWBE are on the rail, all operations feed directly to the port, and we are the only forest product exporter at the port.”

Economic Impacts

House expects his newest project to employ at least 180 local employees, and across the company’s operations, as many as 240 within the next couple of years. “This is significant, because Maine lost over 1,900 direct jobs in the paper industry since 2013,” he says. “In 2015 alone, the closing of Verso paper in Bucksport, Maine, which is eight miles from Searsport, caused a loss of 570 jobs, with an additional 490 lost the

34 BIOMASS MAGAZINE | APRIL 2017

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next year, by the same company. The displaced workers have an ability to go back to work in a similar industry position.” The positioning of rail siding throughout Maine adds another dimension to workforce and job creation. “Up until now, most remote land clearing sites were and still are served by locally situated loggers, foresters and trucking firms,” House says. “When truckers had to drive a single load to a mill that is about 100 miles from the cut sites, they can get, on average, four to five loads a week to the mill. Once at the mill, they could face long lines and even rejections of their loads. We offer those same loggers or truckers the ability to bring their loads to a nearest rail yard to put their logs on a rail car. Each rail car can take up to three truck loads, to take to Searsport by rail. That means smaller companies can now participate in the overall operation.” House says the $20 million project is fully funded, and will begin building in May, timing construction with debt service and when MWBE’s first overseas client can begin accepting wood chips. As for the anticipated timing of production and shipping, MWBE is already shipping containers of logs to China out of a site in Lincoln, Maine, and House says the company expects to load and ship a log vessel as early as May out of Searsport. “Under contract at this time, we have several hundred containers of logs slated for continual export for the next six months. Heat-treated wood chips to the EU will commence early to mid-2018, with a potential for a smaller clientele order into Ireland just prior to that.” On local and state support for the project, House says it’s been more than adequate. “We have been fortunate to have as much support from all Maine agencies as anyone could ask for,” he says. MWBE was previously awarded an Industrial Rail Access Grant of $750,000, and House says the company is under consideration for a subsequent grant. “The rail line, central Maine and Quebec, have been a champion of the project, and we hope to move in excess of 3,000 rail cars

over their lines in the very near future. The port authority, along with the department of transportation, the forestry department and many other agencies in Maine, are truly proactive in building our forest industry opportunities, and especially in developing an export component from Maine.” In the meantime, Maine’s tree farmers, loggers, contractors and truckers will serve the markets they can, including the biomass plants aided by last year’s subsidy package,

waiting for both projects to become commercially operational. As the forest industry, many Mainers and state officials know, and aptly stated by Maine Sen. James Dill, “This is far greater than a couple of energy plants and their employees. Logging is a Maine legacy.”

Author: Anna Simet Managing Editor, Biomass Magazine asimet@bbiinternational.com 701-738-4961

APRIL 2017 | BIOMASS MAGAZINE 35

The

IMPORTS COMETH

U.S. imports of biomass-based diesel hit extreme heights in 2016, fulfilling a third of the consumption market, driving the domestic biodiesel industry to more actively seek counteracting measures to protect its own investments. BY RON KOTRBA

he U.S. imported nearly three times more biodiesel and renewable diesel in 2016 than what the entire domestic industry produced in 2010. According to import data from the Energy Information Administration, combined biodiesel and renewable diesel imports last year totaled more than 915 million gallons (692.87 million gallons of biodiesel and 222.77 million gallons of renewable diesel), far surpassing annual import volumes of any previous year on record. In fact, biomass-based diesel imports in 2016 were higher than domestic production every year from the industry’s inception in the 1990s through 2010, and they nearly matched domestic volumes produced in 2011 and 2012. Despite rising imports, U.S. production is also hitting new heights. The figures vary, depending on which data are used—U.S. EPA’s EMTS domestic D4 RIN generation data or EIA’s Form EIA-22M survey production data—but both sets show an appreciable uptick in domestic production last year. According to EIA data, U.S. biodiesel production is up 23.5 percent from 2015-’16, moving from nearly 1.27 billion gallons to almost 1.57 billion. EMTS data shows more impressive growth, and overall production volumes in 2016 at more than 1.9 billion gallons vs. 1.45 billion gallons in 2015, or more than 31 percent growth. Part of the variance in domestic production volumes could be explained by the nature of the two data collection methods—RIN generation vs. a production survey. The discrepancy could also be reconciled, in part, because EMTS D4 RIN generation includes the U.S.’s two large renewable diesel facilities, Diamond Green Diesel and REG Geismar. Both plants are located in Louisiana and have a combined production capacity of 235 MMgy. Once DGD completes its expansion, the cumulative capacity at REG Geismar and DGD will top 350 36 BIOMASS MAGAZINE | APRIL 2017

MMgy. It is certain EIA biodiesel production data do not include renewable diesel, since the agency’s map shows no production in Louisiana.

Import Data Discrepancies

While production tallies differ depending on which agency and method is utilized, import reports also vary from government agency to agency, and company to company. Some private companies such as Genscape and Prima Markets leverage government data for reference or comparison, but they also have their own proprietary collection methods unique to them, thus providing even more inconsistencies for those on the outside looking in. EIA biodiesel imports for 2016 come in at nearly 693 million gallons, whereas both Genscape’s and Prima Markets’ tallies are roughly 720 and 725 million gallons, respectively. For renewable diesel, EIA figures show nearly 223 million gallons entered the U.S. in 2016, while Genscape tracks the volume at about 206.5 million gallons and Prima Markets at almost 200 million. For biodiesel and renewable diesel imports, EMTS data are particularly confounding because EPA does not separate D6 biodiesel and renewable diesel from D6 ethanol in the yearly breakdown of domestic, importer and foreign RIN generation. Biodiesel and renewable diesel made from palm oil do not qualify for D4 RIN generation because they do not meet EPA’s threshold for greenhouse gas (GHG) emissions reductions of 50 percent compared to the baseline diesel fuel. These products can, however, qualify for the less stringent D6 RIN generation, which only requires 20 percent GHG reduction. “Many people would agree that EMTS data doesn’t accurately reflect what enters the

U.S.,” says Will Martin, an analyst with Genscape Inc. For instance, EMTS data show approximately 166 million D6 RINs generated for renewable diesel in 2016, yet Genscape’s own data demonstrate that just 21 million gallons, or 10 percent, of renewable diesel imports in 2016 generated D6 RINs. Heather Zhang, an analyst with Prima Markets, says her data also show about 10 percent of renewable diesel imports entering the U.S., or about 20 million gallons, generated D6 RINs. Unfortunately, EIA data do not include RIN assignments. Martin says DGD and REG Geismar are not using palm oil and are not generating D6 RINs. Paul Nees, director of the operations control team for REG Services Group LLC, confirms that Renewable Energy Group Inc. does not use palm oil for renewable diesel production in Geismar, Louisiana. It follows, then, that the 166 million gallons of D6 renewable diesel product represented in EMTS must have come from overseas. “A lot of people are interested in why this is,” Martin says, referring to the EMTS D6 RIN generation for renewable diesel. Martin and others suggest the numbers have to do with RIN retirements or grandfathered facilities, but Martin admits he—like many others—does not know why EMTS shows this data, or what it means. “This is a question for us also,” Nees says, “and we follow this very closely.” One possibility for this, a source says, could be a scenario in which a major renewable

ADVANCED BIOFUELS¦

ONE OF MANY: This vessel docked in Argentina on Feb. 24 and was expected to deliver a load of soy-based biodiesel to the Houston area sometime in the last week of March, according to Genscape Inc. Last year, 136 such shipments from Argentina carried 444 million gallons of biodiesel from Argentina to the U.S. PHOTO: CHRISTER IVARSSON

diesel producer manufactures fuel intended for the U.S., generates D6 RINs associated with that fuel and then, instead of exporting the fuel to the U.S., the shipment lands elsewhere, requiring those RINs to be retired.

By the Numbers

Argentina alone exported 129 million more gallons of biodiesel to the U.S. in 2016 than what the U.S. industry produced in 2010. Last year, U.S. ports received approximately 444 million gallons of Argentine biodiesel, according to EIA data. To put this in perspective, that is 64 million gallons more than what Argentina shipped to the U.S. in the previous three years combined. Argentine biodiesel represents the single largest source of imported biodiesel, accounting for 64 percent of biodiesel imports and more than 48 percent of combined U.S. biodiesel and renewable diesel imports. According to Genscape and its data collected through Vesseltracker, which monitors ship traffic using automatic identification system (AIS) data and other intelligence, 18 different port cities along the East and Gulf Coasts received 136 shipments totaling 444 million gallons—the same import volume from Argentina that EIA reports. The largest single entry point was Houston, receiving 25 shipments totaling 117 million gallons. New York received 19 shipments totaling 52 million gallons. Savannah, Georgia, took in 66 million gallons of Argentine biodiesel in 17 different shipments. From

Mobile, Alabama, to Boston, the imports from Argentina cometh throughout 2016. The major consignees of biodiesel shipments from Argentina in 2016, according to Genscape, include Biosphere, receiving 47 shipments at 145 million gallons total; Shell, receiving 56 million gallons in 18 shipments; Cargill, receiving 10 shipments totaling 37 million gallons; and Louis Dreyfus, receiving nine shipments totaling 26 million gallons. It’s important to note that 118 million gallons of Argentine biodiesel was received by what Genscape identifies as an unknown consignee in 29 shipments. Other consignees include Noble, Noble Americas, Targray, Oleaginosa Moreno, Cofco Argentina, Vincentin S.A.I.C., Claypool Holdings, Molinos Agro S.A., and Archer Daniels Midland Co. U.S. biodiesel imports from Indonesia are also steadily climbing. In 2016, Indonesia exported roughly 102 million gallons of biodiesel to the U.S., according to EIA data, nearly twice as much as in 2013 (52.4 million gallons). Genscape data show 101 million gallons. Based on the huge palm industry in Indonesia and the players involved, most experts assume all the biodiesel entering the U.S. from Indonesia is palm-based product generating D6 RINs. About half the volume of Indonesian biodiesel coming to the U.S. in 2016 did so via Houston, according to Genscape, with 21 shipments throughout the year totaling 51 million gallons. Eight shipments carrying 15 million gallons entered through New Orleans, and eight other port cities along the East and Gulf Coasts, including three in Florida, received the remainder of Indonesian biodiesel. Consignees of biodiesel shipments from Indonesia, according to Genscape, include Wilmar, receiving 22 shipments totaling 47 million

gallons; Biosphere, receiving 14 shipments totaling 33 million gallons; Targray, receiving eight shipments totaling 16 million gallons; Lynette Johnson, receiving one shipment of 5 million gallons; and an unknown consignee receiving three shipments totaling 5 million gallons. The third largest source of U.S. biodiesel imports in 2016 is as familiar as the top two nations but a lot closer: Canada. Imports from Canada surpassed 98 million gallons last year, according to EIA data. Genscape’s data, which include an imputed rail value based on U.S. International Trade Commission data, indicate the U.S. took in more than 114 million gallons of biodiesel from Canada. ADM was a top consignee of Canadian biodiesel, according to Genscape, with 17 shipments totaling 42 million gallons. EIA data show three additional countries exported biodiesel to the U.S. in 2016, totaling slightly more than 49 million gallons: Germany (24.74 million), Korea (22.47 million) and Australia (1.89 million). Genscape data further indicate three more countries exported biodiesel to the U.S. last year totaling an additional 10.09 million gallons: Singapore (4.96 million), the Philippines (4.53 million) and Malaysia (600,000). U.S. imports of renewable diesel totaled nearly 223 million gallons, according to EIA data, which indicate it all originated in Singapore, where Neste Corp. has a large renewable diesel production facility. Zhang says Prima Markets tabulates roughly 200 million gallons of renewable diesel imports, and like EIA data, it all came from Singapore and most of the product entered the U.S. through various California ports, where it is used to satisfy GHG reductions for the low carbon fuel standard (LCFS) program and generates LCFS credits. Genscape data show about 206.4 million gallons of renewable diesel entering the U.S. from Neste, with most of it coming from Singapore APRIL 2017 | BIOMASS MAGAZINE 37

lion’s share remainder of Neste’s renewable diesel in 2016, with Los Angeles, San Francisco, Long Beach and Richmond shipments totaling close to 160 million gallons. Zhang says a U.S. division of Finland-based Neste is the consignee for Neste renewable diesel. “Then they sell their fuel to U.S. customers,” she says.

Why So High?

SOURCE: EIA DATA COMPILED GRAPHICALLY BY RON KOTRBA, BIOMASS MAGAZINE

and entering California. “There were a few surprise shipments from Europe, I remember,” says Susan Olson, Genscape’s managing director of agriculture and biofuels. “I recall one ship coming from Rotterdam that went to the East Coast.”

According to Genscape data, the East Coast shipments of renewable diesel included 10.3 million gallons received in Philadelphia, 9.2 million in New York and 3.3 million in Boston. Portland, Oregon, received 5.4 million gallons. Seven California port cities took in the

On a high level, biodiesel and renewable diesel imports flooded the U.S. for the same reasons that domestic production increased between 23.5 percent (EIA) and 31 percent (EMTS): The combined effectiveness of two important federal biodiesel policies. These are, of course, the $1-per-gallon biodiesel blenders tax credit, reinstated in late 2015 retroactive from Jan. 1, 2015, through Dec. 31, 2016, and the Renewable Fuel Standard, which had gone through a series of setbacks and delays by EPA throughout most of 2014-’15, but by late 2015 the program was back on track and forged new promise of, at minimum, modest growth for biomass-based diesel at 100 MMgy. Anecdotally, in late May 2015, when EPA released its much-anticipated proposed RFS rule for 2014-’17 biomass-based diesel, U.S. imports of biodiesel more than tripled in two months, jumping from a meager 14.1

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ADVANCED BIOFUELS¦ million gallons in May to 48.6 million gallons in July. With a growing RFS is the economic incentive of the associated RIN values purchased by obligated parties for regulatory compliance. Furthermore, companies such as Neste that export to California can cash in on LCFS credits on top of RINs and the federal tax credit. “The biodiesel blenders tax credit is the top reason that motivates more imports,” Zhang says. “Also D4 and D6 RINs in 2016 have consistently stayed at a very good level. This has also added additional incentives to the imports economy.” She adds that the growing RFS— with biomass-based diesel moving from 2 billion gallons in 2017 to 2.1 billion gallons in 2018, and the overall advanced biofuels category increasing from 3.61 billion ethanol-equivalent gallons in 2016 to 4.28 billion in 2017—has also had a meaningful impact on imports. “Brazilian ethanol arbitrage didn’t work to fulfill the advance renewable fuels category, so biomass-based diesel would need to help to supply the significant increase in demand,” Zhang adds. On a more granular level, countries such as Argentina and Indonesia encourage exportation of finished biodiesel from soy and palm oils, respectively, with differential export taxes (DETs), through which decreased export tax rates are applied to various stages of the oilseed value chain. These tax schemes are designed to incentivize domestic manufacturing whereby the economic benefits associated with valueadded production are retained in-country. According to a Global Agricultural Information Network report by USDA’s Foreign Agricultural Service, titled, “Argentina Biofuels Annual 2016,” in June 2016, the Argentine government taxed exports of biodiesel at 5.04 percent while whole soybean exports were taxed at 30 percent and soybean oil at 27 percent. Zhang says Argentina’s biodiesel export tax ranged from a low of 1.62 percent to a high of 7.15 percent last year. Also, in late 2013, the EU imposed antidumping duties on Argentine and Indonesian biodiesel that significantly reduced exports to the EU. With the No. 1 destination for biodiesel from these two countries effectively closed, other outlets—namely the U.S.—were pursued. Late last year the General Court of the EU annulled the antidumping measures, but the European Biodiesel Board stated the duties will remain in full effect throughout an appeal. The dispute settlement body at the World Trade Organization has also been busy with claims from Argentina, Indonesia and the EU regarding these tariffs. Additional developments are expected this year. Furthermore, in early 2015, while the U.S. biodiesel industry was in limbo due to inaction by EPA, the agency approved a certification process presented by the Argentine Biodiesel Chamber (CARBIO) allowing an alternative feedstock tracking mechanism to demonstrate compliance with RFS regulations, the decision and timing of which riled U.S. producers and its trade association, the National Biodiesel Board. This approval process was never opened to public comment. In January 2015, NBB stated, “EPA’s Jan. 27 decision allows Argentinian biodiesel producers to use a survey plan for certifying that feedstocks used, in this case soybean oil, are sustainable. The change—effectively leaving it to the foreign producer to pay an independent third party to survey their feedstock suppliers—is far less stringent than the current map and track requirement and more difficult to verify.” In 2014, before this approval, Argentine biodiesel exports to the U.S. were roughly 52 million gallons. A year later, after the approval, they quadrupled. Moreover, Argentine biodiesel exports to the U.S. were more than eight times higher in 2016 than in 2014. The same USDA FAS GAIN report, however, suggests local exporters are not using this certification scheme, “as there are seven processors registered individually with EPA and use an individual record-keeping system,” the report states. “EPA segregation requirements add an estimated cost of $30 to $40 per ton of biodiesel. This includes a price premium paid to farmers producing ‘EPA soybeans,’

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the cost of segregations and controlling the whole chain until export, the time consumed in the whole process, etc. Different companies have different problems. The most common are limited supply of traced soybeans, smaller-

than-needed biodiesel storage capacity, and logistical complications.” Nevertheless, USDA FAS forecasts Argentine biodiesel exports to the U.S. in 2017 at nearly 449 million gallons, slightly higher than in 2016.

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Potential Remedies

The new U.S. president, billionaire real estate mogul celebrity Donald J. Trump, campaigned incessantly on what some deem a platform of protectionism, calling for domestic job retention and creation, energy production, and a reduction of both imports of goods and exports of jobs and tax dollars that benefit foreign manufacturing sectors. While Trump and many cabinet members, including new EPA administrator Scott Pruitt, are avid climate change deniers, the U.S. biodiesel industry’s record of domestic job and energy creation alone are ample reasons to expect resolute support from the new administration, not to mention Trump’s avowed backing of the RFS while campaigning through the Midwest, where voters played a major role in his election. But for U.S. biodiesel producers, Trump’s installation of fossil-fuel industrialists in top executive positions somewhat quell this enthusiasm. What biodiesel can do for the U.S. economy, however, and what the U.S. government can do to support the domestic biodiesel industry, are what NBB is focusing on with laser-like precision. NBB’s strongest hope to suppress imports is action the association has been pushing for years—reforming the blenders tax credit to a domestic producers credit. “The RFS and tax credit were designed to incentivize U.S. biodiesel production,” says NBB CEO Donnell Rehagen, who spoke at the California Biodiesel Conference on March 1. “RFS was enacted to create American jobs and energy, and reduce pollution and imports of diesel. This is why we are emphasizing domestic production.” The blenders tax credit expired Dec. 31 for the fifth time since its inception. Historically, it has been reinstated in extenders packages. In the

%LRPDVV 0DJD]LQH SDJH LVODQG & past two years, bills have been introduced—some passed at committee levels—seeking to extend the credit for two years and reform it to a domestic producers credit. While ultimately unsuccessful, the efforts laid the groundwork for future discussions, Rehagen says. The argument to push for a domestic producers credit is that, while domestic production has increased considerably in 2016, there is still appreciable idled capacity due to an influx of imports subsidized, in some cases, at the point of origin and again in the U.S. via the tax credit, RINs and other incentives such as LCFS credits. Anne Steckel, NBB’s vice president of federal affairs, says the U.S. biodiesel industry is only running at two-thirds capacity. Biodiesel Magazine’s own statistics show that when existing U.S. production capacity, including capacity of plants under expansion or construction (totaling approximately 2.74 billion gallons, 350 million gallons of which is renewable diesel), is compared to both EIA and EMTS production figures for 2016, the U.S. biodiesel industry operated at between 65 and 69 percent last year, respectively (adjusting for EIA production data excluding renewable diesel). EIA’s monthly biodiesel production report indicates 2.3 billion gallons of U.S. biodiesel productive capacity, thus EIA’s own capacity and production numbers reflect a 68 percent utilization rate. According to a study conducted by LMC International, a 2.9 billion gallon biodiesel and renewable diesel market—roughly the 2016 U.S. consumption market—divided between domestic and foreign supply supports about 64,000 U.S. jobs and $11.42 billion in total impact. Economic benefits increase substantially with growing domestic production, rather than imports. For example, just 2.5 billion gallons domestic production would support at least 81,600 U.S. jobs and

$14.7 billion in total economic benefit. These are the numbers NBB wants Congress and the new administration to heed. Tax reform is also a hot topic with the Trump administration and Republican-con-

trolled Congress, and while this would be a massive undertaking by the federal government, the NBB believes its message of retaining U.S. tax dollars for the domestic biodiesel industry falls on attentive ears. “The fact that

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¦ADVANCED BIOFUELS an extenders package is on the shelf,” Rehagen says, referring to tax reform replacing or delaying discussion of an extenders package, “this gives us a chance to talk to Congress about what we need.” That, of course, is a longerterm tax credit for which only domestic producers would be eligible. Steckel says tax reform is a big job to get done in one year. “People have good intentions to get it done, but it’s a very heavy lift to do in one year,” she says, “unless you have a strong commitment from the House, Senate and administration.” Repealing and replacing Obamacare is taking longer than anticipated. “That is pushing back tax reform,” Steckel says, “but we are participating in conversa-

42 BIOMASS MAGAZINE | APRIL 2017

tions about it.” She adds that extenders are not something people are talking about right now. “But at some point, if Congress is not moving forward with tax reform, then we will move focus to the extenders,” Steckel says. Rehagen says NBB intends to remain active in the extenders tax group. “We don’t want to put all eggs in one basket though,” he says. “But by midyear, if we see no tax reform moving forward in Congress, we’ll look for a bridge [by way of an extenders package].” Another piece of legislation that could have an effect on biodiesel imports is the border adjustment tax, a complicated system to financially encourage exportation of goods while financially discouraging exportation

of jobs and importation of products. “This seems to be something that’s being discussed heavily in the House,” Steckel says, “but the Senate is taking a wait-and-see approach.” She says Kevin Brady, the House ways and means committee chair, is showing support for the border tax. “But there’s a lot of opposition from the folks who are against it,” Steckel says. “It would be a change, and with any sort of change comes opposition. But the House is weighing this and it appears there’s a possibility it would make it through House. It’s an intriguing idea that could have some positive influences on the biodiesel industry.” The federal court system was sought as a solution by NBB to the CARBIO approval for Argentine imports, but on Feb. 24 the U.S. Court of Appeals denied NBB’s petition for a rehearing on the case. “It’s unfortunate,” Steckel says, “but this is an issue that needs to be addressed. The lack of public comment was a strong concern for us. It didn’t go through the proper channels, which is very frustrating. The CARBIO issue is one we’ll continue to watch. Discussions with the administration may occur.” It is conceivable that Pruitt, as the new head of EPA, could revisit this issue without the need for court involvement—particularly if influenced by Trump himself, given his viewpoint on imports. Finally, the U.S. may eventually follow EU’s suit on biodiesel imports by opening up a trade investigation that could ultimately impose tariffs on product from Argentina and Indonesia. “The NBB has decided to do a trade assessment,” Rehagen says, “to find out the validity of doing a trade case. This is still to be determined.” He says it’s an uphill battle, but there’s not a level playing field since the EU has tariffs on U.S., Argentine and Indonesian biodiesel. “A Finnish renewable diesel producer can take advantage of selling its product into the EU and at the same time selling it to the U.S., but also receiving subsidies from the American tax payer,” Rehagen says. The trade assessment is in the information-gathering stage, says Jessica Robinson, communications director for NBB. A third party is conducting a producer survey about impacts that have been realized due to potentially dumped, subsidized imported biodiesel and renewable diesel. “The intent of the trade assessment is to confirm or find the answer to whether the trade processes, as they are currently set up, are fair for all parties involved,” she says. “What has to be assessed is what the impact on the market might be.” “Under U.S. law, U.S. industries may petition the government for relief from imports that are sold in the United States at less than fair value (“dumped”) or which benefit from subsidies provided through foreign govern-

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ment programs,â&#x20AC;? the USITC states. â&#x20AC;&#x153;The U.S. Department of Commerce determines whether the dumping or subsidizing exists and, if so, the margin of dumping or amount of the subsidy; the USITC determines whether there is material injury or threat of material injury to the domestic industry by reason of the dumped or subsidized imports.â&#x20AC;? The third-party survey intends to gather information so the U.S. industry can make the case that, indeed, material injury or the threat thereof has occurred. â&#x20AC;&#x153;Domestically processed biodiesel in the United States faces imported price-competitive biodiesel and renewable diesel that is more price competitive,â&#x20AC;? the USDA FAS GAIN government report states. â&#x20AC;&#x153;According to Bloomberg, biodiesel derived from soybean oil costs $3.71 a gallon, but imported biodiesel coming through the Gulf of Mexico port costs $3.07 with Argentine supplies up to 30 cents cheaper than that. This presents a significant opportunity for Argentina to gain greater market share.â&#x20AC;? What 2017 will bring is only speculative at this point. â&#x20AC;&#x153;Without any tax credit currently in place, I expected a slowing down of imports, majorly influenced by the market share of Indonesian imports,â&#x20AC;? Zhang says. â&#x20AC;&#x153;This year D6 RINs have dropped to 30 cents and thereâ&#x20AC;&#x2122;s no biodiesel blenders tax credit to help make imports lucrative, so [Indonesian imports] have already been reduced in the first two months.â&#x20AC;? She adds, however, that Argentine and renewable diesel imports were still strong so far this year. â&#x20AC;&#x153;But if the U.S. passes a producers tax credit very soon, I think there would be some

impacts on Argentinaâ&#x20AC;&#x2122;s biodiesel imports, as the domestic producers would enjoy a $1 tax credit whereas importers wouldnâ&#x20AC;&#x2122;t,â&#x20AC;? she says. â&#x20AC;&#x153;It would really depend on where the D4 [RIN credit prices] will go, although the U.S. market would still need the help from foreign products to fulfill its mandates.â&#x20AC;? Rehagen suggests U.S. producers would be able to meet its RFS targets even if imports were significantly reduced. â&#x20AC;&#x153;Just look at the December numbers,â&#x20AC;? Rehagen says. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s more than 200 million gallons of domestic production. Thereâ&#x20AC;&#x2122;s no doubt the U.S. biodiesel industry can meet its RFS targets.â&#x20AC;? EIA import data for January were not available at press time, and while Zhang says U.S. imports of Argentine product were still strong this year, Martin says Genscape was unable to confirm one single shipment in January. Olson says thereâ&#x20AC;&#x2122;s typically a â&#x20AC;&#x153;demand hangoverâ&#x20AC;? in the first quarter for biomass-based diesel. â&#x20AC;&#x153;January is usually a slow month,â&#x20AC;? she says. Martin, however, says, â&#x20AC;&#x153;Look at how big Decemberâ&#x20AC;&#x2122;s import numbers are, and January slows to a trickle. Itâ&#x20AC;&#x2122;s so abundantly clear how much that tax credit impacts this business.â&#x20AC;? Author: Ron Kotrba Senior Editor, Biomass Magazine 218-745-8347 rkotrba@bbiinternational.com

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APRIL 2017 | BIOMASS MAGAZINE 43

COMMODITIESÂŚ

Sizing

THEM UP A close look at export data for wood pellets, fuel ethanol and biodiesel reveals a varying reliance on export markets for U.S. producers. TIM PORTZ

he combined export value of wood pellets, ethanol and biodiesel for U.S. producers has flirted with $3 billion since 2012, and depending upon how the final numbers shake out for last year, 2016 may very well be the year this milestone is surpassed. For both wood pellets and fuel ethanol, export numbers have never been higher than they are right now, and all three sectors are eyeing foreign markets as a means to significantly grow their businesses. An analysis of the same data reveals key and informative differences. While foreign markets are an important part of the overall market picture for fuel ethanol and biodiesel producers, exports account for less than 10 percent of annual production while, from a volumetric perspective, wood pellet production in the U.S. is heavily reliant on foreign markets. Now, the looming question is, what impact will a Trump administration, which campaigned on a promise to revisit the nationâ&#x20AC;&#x2122;s trade agreements, have on the export opportunities for each of these industries? LOADING UP: Pellets manufactured in British Columbia are loaded onto a vessel bound for the Drax Power Station. Canadian producers compete with U.S. producers for market share with the world's largest pellet buyer. PHOTO: TIM PORTZ, BBI INTERNATIONAL

APRIL 2017 | BIOMASS MAGAZINE 45

Wood Pellet Exports, by Country 2015

Fuel Ethanol Exports, by Country 2015

Biodiesel Exports, by Country 2015

Country

Gallons

Country

Tons

Trade Value (US$)

Gallons

Trade Value (US$)

USA

4,668,775

$682,978,152

USA

828,458,656

$1,802,563,696

Netherlands

507,443,442

$1,555,528,210

Canada

1,627,784

$222,796,388

Brazil

485,473,508

$880,627,317

Germany

447,881,771

$1,275,752,249

217,348,734

$686,092,329

Argentina

236,621,742

$ 505,608,540

Latvia

1,605,188

$233,260,229

France

Russian Federation

934,859

$102,196,800

Germany

72,327,875

$228,676,358

Spain

222,879,678

$619,366,386

Estonia

883,390

$137,318,386

Spain

42,675,616

$134,608,634

Indonesia

90,732,545

$195,163,188

Austria

559,126

$559,126,100

Canada

17,324,654

$67,718,633

USA

88,461,538

$ 263,219,841

Vietnam

553,452

$103,432,144

SOURCE: UN COMTRADE DATA

France

41,995,740

$ 123,240,876

SOURCE: UN COMTRADE DATA

Global Market Leaders

In both the fuel ethanol and wood pellet categories, the U.S. can boast the largest production capacity and the largest share of the global export market. In both cases, U.S. exports outstrip the closest competitor by a wide margin. Wood pellet export volumes for U.S. producers were well over 4 million tons, while Canada has yet to surpass 2 million tons of exports. Brazil is the world’s second leading producer of fuel ethanol, and while production and export volumes there vary from year to year, in 2015, its export volumes were about half of what U.S. producers achieved. Additionally, Brazil is a prominent market for U.S. ethanol producers taking over 100 million gallons in 2015. The wood pellet industry differs from the fuel ethanol industry in that there are far more global producers of significance, and there is much more parity among them in terms of their size and share of the global market. Estimates

place the global market for wood pellets, whether or heat or power production, at roughly 28 million metric tons, the largest demand center being the European Union. As the world’s largest producer, the U.S. satisfies perhaps one-fifth of the total annual demand. Countries including Sweden, Austria and Germany—while less significant in the global marketplace—produce and consume significant quantities of wood pellets. Sweden alone produces nearly 2 million tons each year but consumes the vast majority of that volume domestically. The fuel ethanol industry is dominated by U.S. producers. Production capacity in the U.S. is double that of Brazil, its closest competitor, and together these two represent 85 percent of installed production capacity worldwide. U.S. fuel ethanol producers can produce 4 billion more gallons than the rest of the world combined. In 2015, the single largest exporter of fuel ethanol after the U.S. and Brazil was

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France, which exported just over 200 million gallons, compared to nearly 500 million and over 800 million gallons of exports for Brazil and the U.S., respectively. U.S. biodiesel producers are facing much stiffer global competition than their wood pellet and fuel ethanol counterparts. In 2015, the U.S. trailed the Netherlands, Germany, Argentina, Spain and Indonesia in exported volumes. The Netherlands and Germany both do robust export business in biodiesel, and each of them surpassed $1 billion in revenues from biodiesel in 2015. U.S. producers exported nearly 90 million gallons in 2015, worth more than $250 million dollars.

Economic Dependence

An examination of where wood pellet, fuel ethanol and biodiesel exports go also reveals some key differences between the categories. Exports for both wood pellets and biodiesel are

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largely dependent on one buyer—the U.K. for wood pellets, and Canada for biodiesel. In 2015, shipments of wood pellets to the U.K. generated 85 percent of the total export value, while Canada represented over 90 percent of the export value for biodiesel producers. The fuel ethanol export market is far more distributed, with the largest foreign buyer, Canada, representing just 25 percent of U.S. exports, according to data from the Renewable Fuels Association. Over 50 different countries received fuel ethanol exports from the U.S., and Brazil and China both closely followed Canada. In its 2017 industry outlook, however, the RFA noted that China has recently raised import duties on U.S. ethanol, and the association expected that this would “sharply curtail exports to that nation.” The wood pellet export market is different from both biodiesel and fuel ethanol, in that not only is the export market quite reliant on one country, it is also largely dependent upon one facility inside of that country. For now, the overwhelming majority of wood pellets delivered to the ports in the U.K. will be burned at the Drax Power Station. The power station, initially designed to burn exclusively coal, is capable of producing nearly 4,000 MW of power. Three of Drax’s units have been converted to burn wood pellets only, and the annual demand from those boilers surpasses 6 million tons of wood pellets. The growth of the global pellet market, as well as U.S. wood pellet exports, tightly correlate with each of Drax’s converted boilers coming online. This rapid conversion sparked investment in both production capacity in North America, and port infrastructure in the U.S. and the U.K. Drax will soon be joined by another facility in the U.K., as the efforts to convert the Lynemouth power station are underway. While significantly smaller than Drax, Lynemouth will still require more than 1.5 million tons of wood pellets annually, likely cementing the U.K. as the largest importer of wood pellets well into the foreseeable future. Prior to a strengthening dollar in 2015, U.S. producers were eyeing and winning pellet export opportunities on the spot market. Italy, Europe’s largest importer of wood pellets for residential heating, bought over $40 million worth of U.S. pellets between 2012 and 2014, but sales plummeted to below $500,000 in as the dollar strengthened against the euro.

Race for Second

For now, the U.S. and Canada occupy the top two spots in global wood pellet exports. Export data from 2015 suggests, however, that strong competition continues to emerge, particularly from Baltic nations like Latvia

and Estonia. In 2015, Latvia nearly surpassed Canada in exported volumes with 1.6 million tons exported. Latvia has posted strong export growth since 2012, when its export volumes had not yet exceeded 1 million tons. Since then, Latvia has added about 250,000 tons to its export total each year. Similarly, Estonia has doubled it pellet export business since 2012, and with Latvia, has firmly cemented the Baltics as a formidable presence in the European marketplace. In the U.K. alone, Latvia and Estonia have grown their pellet business nearly 10-fold since 2012 when they exported just over 80,000 tons to the country. In 2015, their combined volumes exceeded 650,000 tons. Russian export volumes fell immediately between Latvia and Estonia in 2015, just missing the million ton threshold. Home to the world’s largest inventory of wood fiber, Russia has the feedstock available to compete with both Canada and the U.S., but its wood pellet industry is constrained by the country’s vastness and limited infrastructure. Pellets produced in Siberia are thousands of miles from ports near St. Petersburg. Additionally, some pellet-buying countries have shown a reluctance to do business with Russian producers, and in 2015, the U.K., the world’s largest single buyer, took just 12,000 tons of pellets from Russia, barely enough to fill a handy-sized cargo vessel. The largest buyers of Russian pellets in 2015 were Denmark and Sweden, taking 380,000 and 150,000 tons, respectively. Finally, Vietnam has elbowed its way onto the global scene, and has been very disruptive in South Korea, a market Canadian producers have been eyeing for years. Pellet export volumes out of Vietnam and into South Korea ballooned in 2014 to nearly 600,000 tons from just 130,000 in 2013. Volumes in 2015 were down slightly, but remained above 500,000 tons for the year. For now, South Korean buyers are unwilling to enter into long-term pellet offtake contracts, and instead are utilizing tenders. This approach has essentially limited involvement in the South Korean market to ultralow-cost producers in Vietnam. The industry inside that country is dominated by small producers who convert residuals from furniture manufacturing into volumes that are then aggregated by brokers, who fill empty containers bound for return to South Korea. Tenders are often filled at per-ton prices that are lower than the cost of production for Canadian and U.S. producers. Canadian exports to South Korea reached their peak in 2014 at 150,000 tons. The following year, volumes fell to just 50,000 tons, and 2016 appears to have finished at about the same volume.

COMMODITIESÂŚ

SOURCE: UN COMTRADE DATABASE

All Eyes on Asia

North American pellet, fuel ethanol and biodiesel producers alike all covet the promise of incredible market growth offered by the huge populations and rapidly expanding economies across Asia. In some instances, the growing standard of living alone creates a demand opportunity. In other instances, countries with aggressive climate goals like Japan offer opportunity. China is already an important trade partner for U.S. ethanol producers, who watched volumes balloon to 176 million gallons in 2016. However, industry forecasters anticipate dramatically lower volumes in 2017, as a consequence of Chinaâ&#x20AC;&#x2122;s increased import tariffs for ethanol. For wood pellet producers in Canada, 2016 offered hope that the beginnings of a strong and growing Japanese market may finally have arrived. In 2012, pellet volumes from Canada to Japan exceeded 100,000 tons, but retreated to well-below 100,000 until last year, when the country shipped nearly 275,000 tons. There is hope that a period of sustained growth will follow. For now, U.S. producers are on the outside looking in, with regard to Japan delivering just a couple of hundred tons, likely specialty barbeque pellets, into the country. While Asia offers great promise, the region also has existing and potential competitors in every category. Canadian producers know all too well how a regional competitor can turn a promising new market into disappointment almost overnight. For now, though, Japanese buyers have shown a preference for Canadian pellets, and producers there are hopeful it will continue to grow, and ultimately resemble the market they once thought South Korea would provide. Finally, underpinning many of the foreign opportunities for these renewable fuel

commodities are the energy and environmental policies of foreign governments or the trade agreements those countries have in place in the U.S. For example, it is very unlikely that China will import anywhere near the gallons of fuel ethanol that they did last year, all because of trade posturing and tariff hikes. The fuel ethanol industry is positioned to weather that in two ways. First, the export market represented just 7 percent of total shipments for ethanol producers. Second, ethanol shipments are well-distributed globally. The other side of that same coin is the export market for U.S. wood pellet producers. Not only is the industrial market completely reliant on exports, for now, it is nearly total reliant on demand from one country, and one real buyer within that country. The consequences of a retreat from the U.K. decarbonization policies that created the industrial pellet industry in the U.S. would be dramatic. It comes as no surprise then that the trade associations charged with protecting and growing the markets for wood pellets, fuel ethanol and biodiesel continue to press forward into new markets, hoping to establish and grow new opportunities for their producers. For products with robust domestic markets like fuel ethanol, export opportunities are simply the icing on the cake, and the best chance at incremental growth. Other industries like industrial wood pellets were built solely to satisfy foreign demand, and its continuation, growth and expansion is vital to the long-term viability of the industry. Author: Tim Portz Executive Editor, Biomass Magazine tportz@bbiinternational.com 701-738-4969

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The world's largest plant for consumer briquette logs, at German wood processor HIT HolzIndustrie Torgau, has a capacity of 100,000 tons per year and deploys a line of 12 BP6500 HD briquette presses manufactured by C.F. Nielsen A/S. IMAGE: C.F. NIELSEN A/S

The Art and Advantages of Briquetting

BY ESBEN MIKKEL VESTERGAARD

iomass is recognized as an efficient and an environmentally friendly alternative to fossil fuels. Densification of biomass is an important element in trading and handling biomass, as densified fuel offers logistical advantages, and becomes a commodity ensuring high energy content and homogenous quality. Within densification, pellets are best known, but briquetting offers many alternative advantages. Traditionally, briquetting technology was established for developing countries to produce briquettes of local residues, for use in household cooking stoves and restaurants. Later, as the capacities of the machines increased, briquettes were used in industrial boilers to create heat, steam and power for industry and power plants. Within the past 20 years, briquetting has also found its way to households in industrialized countries as consumer logs for wood-burning stoves and fireplaces. In recent years, as the focus on renewable energy has grown, the applications for briquettes have grown concurrently, as have different technologies and new applications.

Briquetting Technologies

Briquetting technologies include mechanical briquetting presses, hydraulic briquetting presses and screw presses; it is important that

customers select the best technology for their applications.

Mechanical Presses

The mechanical briquetting press is built like an eccentric press, and has a very simple design. A constantly rotating eccentric, connected to a piston, presses the raw material through a conical die system, where the briquettes are being formed. Large flywheels secure a very quiet and balanced operation. The press operates with 270 strokes per minute. The briquettes are cooled and hardened in a cooling line, which also serves as transportation of the briquettes. The presses work fully automatic, resulting in a smooth operation with very little maintenance and service. The robust design ensures a long life span and the presses can operate up to 7,000 to 8,000 hours per year. C.F. Nielsen has more than 70 yearsâ&#x20AC;&#x2122; experience with briquetting machines and, over the years, has developed new equipment and increased capacities, so that the range is now from 200 kilograms per hour (kg/h) up to 5.000 kg/h per machine. The briquettes can be produced in sizes from a diameter of 50 millimeters (mm) to 120 mm, and in square form from 55 mm by 55 mm to 100 mm by 100 mm. Other shapes can also be produced.

The main advantage of a mechanical briquetting press is that the press can be used both for consumer logs and industrial briquettes for boilers. Industrial briquettes can either be made as short pucks, at random lengths or cut to a defined length. Further advantages are high capacity, low production costs, and multiple densities.

Hydraulic Presses

In a hydraulic press, the raw material is pressed into a precompression chamber by a dosing screw. In the chamber, the exact amount of material is precompressed. The main piston transfers the raw material into the die that forms the briquette into its final state and required density. The compression process of a hydraulic press is relatively slow. The compression cycle can be between six and 25 cycles per minute, depending on the amount loaded or the density of the briquettes. Hydraulic briquetting presses were traditionally small, with capacities from 50 kg/h up to 200 kg/h. Briquettes were round, with a diameter of 50 mm to 75 mm. However, today, hydraulic briquettes can be made in primarily rectangular forms with a capacity up to 1.5 tons per hour. The traditional size is 150 by 60 mm, but bigger briquettes can be made.

CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

50 BIOMASS MAGAZINE | APRIL 2017

CONTRIBUTION ÂŚ C.F. Nielsenâ&#x20AC;&#x2122;s BPH-Quattro briquetting press, a hydraulic press has a capacity of up to 600 kg/h. The briquetting press is a self-contained unit, with a small dosing bin, PLC control panel and the briquetting press. The press can produce briquettes with a high density due to a large main motor and cylinder. The rectangular briquette is a uniformsized briquette that is easy to store. The briquettes have a lower density slightly below 1, which gives a shorter burn. The press can produce good briquettes from mixed materials of larger particles, and is very compact. The briquettes are typically used as consumer briquettes for fireplaces and wood-burning stoves.

Screw Presses

In an extruder briquetting press, the raw material is fed into a chamber by a feeding screw. The raw material is compressed by a compression screw into the conical die and extension die. The compression screws are conical in shape. The screw operates with approximately 800 revolutions per minute, and during the process high heatâ&#x20AC;&#x201D;up to 300 degrees Celsiusâ&#x20AC;&#x201D;is being generated in a combination of friction and heating of the die system. The BP Shimada Screw Press has capacities up to 500 kg/h. The press is a self-contained unit with a small bin, PLC control panel, smoke hood and saw. The screw press is a machine for high-quality briquettes with a very high density. The machine is a more delicate press, requiring very homogenous raw material with very fine particles (between 2 and 6 mm) and the moisture content between 6 and 8 percent. If these requirements are met, the machine will produce state-of-the-art briquettes that will burn longer than all other alternatives. The briquettes are typically used as consumer briquettes or logs for fireplaces and wood-burning stoves.

ricultural residues are burned in the field. Waste from pineapple fields are now being briquetted on four BP6510 briquetting presses with a total capacity of 6 tons per hour, improving sustainability. â&#x20AC;˘ Creating value from waste. In New Zealand, a company was looking to find a solution for the dust byproducts from their MDF production. The dust produced during the manufacturing process needed careful and costly disposal. The dust was converted to briquettes and sold to a greenhouse, turning the waste into a considerable profit maker. â&#x20AC;˘ Getting the best of demolition wood. A German company had a trucking business collecting different types of waste. The best raw material, including old pallets, is now being used for consumer logs. The company has three BP65100 briquetting presses with a total capacity of 3.5 to 4 tons per hour. â&#x20AC;˘ Low cost for production of torrefied wood. Torrefied wood is a difficult raw material with high friction and very little binding in the raw material. Briquetting has a considerable lower power consumption and a general lower consumption. Several presses have been sold for laboratory testing and production lines.

â&#x20AC;˘ Increasing gas production in anerobic digesters. Normally, wheat straw cannot be utilized in biogas plants, as straw cannot absorb water. When straw is being briquetted, the process creates small steam explosions, which together with high heat and mechanical treatment, changes the structure of the straw. Adding 10 percent briquettes to animal slurry can increase biogas production by 150 percent. â&#x20AC;˘ Turning refuse-derived fuel (RDF) and solid recovered fuel (SRF) into a profit maker. In many countries, RDF/SRF is a waste that costs high tipping fees to dispose of. When the raw material is converted into briquettes, it becomes a fuel that can be sold for energy. â&#x20AC;˘ Briquettes for cooking stoves. In Africa, charcoal is being used for cooking stoves. A â&#x20AC;&#x153;village conceptâ&#x20AC;? has been created, enabling small villages to convert agricultural waste and other types of waste to small briquettes for cooking. Author: Esben Mikkel Vestergaard Area Sales Manager, C.F. Nielsen 45-60437733 emv@cfnielsen.com

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Recent Trends, Projects

Today, briquetting is obtaining renewed attention. A briquetting machine is more simple and easier to operate, which opens new possibilities in new markets such as Africa, Asia and Latin America. Furthermore, briquetting presses can handle a larger range of raw material such larger particles, waste with higher ash content and special raw materials. Some examples of these applications include the following. â&#x20AC;˘ The worldâ&#x20AC;&#x2122;s largest plant for consumer logs. One of the largest producers of pallets wanted to produce more than 100,000 tons of briquettes per year, with exact weight of each package at 10 kg. A line of 12 BP6500 briquetting presses, automatic saws with check weighing systems was delivered. â&#x20AC;˘ Reducing deforestation. In Kenya, 65 percent of energy comes from wood from forests causing deforestation. At the same time, ag-

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US Forest Product Exports to Asia Existing North American infrastructure lights the way for biomass exporters. BY STAN PARTON

he industrial wood pellet industry is catching its breath after an astounding surge since the turn of the millennium. Global production of pellets totaled roughly 2 million metric tons (MT) in 2001, and roughly 28 million MT in 2015. As this market continues to evolve globally, it’s a good time to step back and analyze other U.S. forest product exports by region and type. This data can tell us a lot about raw material utilization, and help uncover new opportunities for biomass and wood pellet growth in foreign markets. New demand for industrial wood pellets is on the horizon, as directives from the Paris climate agreement begin to take effect, and Asian markets—particularly the South Korean and Japanese markets—represent new opportunities for U.S. producers. Of the approximately 19 million MT of wood pellets, lumber, logs and wood chips exported from the continental U.S. in 2016, 7.9 million MT (41 percent) were logs (Fig. 1). In total, 5.8 million MT (74 percent) of logs were exported out of the West, 1.4 million MT out of the South, and 0.6 million MT out of the North, to other countries. However, most logs (7.4 of 7.9 million MT)

exported out of the U.S. were destined for Asian markets. The majority were exported out of western ports due to the region’s high-quality timber and closer proximity to Asia. On a volume basis, wood pellets were the next most significant wood product export from the U.S., totaling 4.7 million MT. Over 99 percent of this volume was shipped from the South and received into European ports. Of the 3.5 million MT of U.S. lumber exports, 2 million MT (57 percent)

were shipped via South ports, 0.8 million MT (22 percent) were shipped from North ports and 0.7 million MT (21 percent) were shipped from West ports. Approximately 2.9 million MT of wood chips were exported from the U.S., of which 1.7 million MT (59 percent) were shipped via West ports, primarily to Japan. An additional 1.1 million MT (3 percent) were exported from South ports. Asian countries are important markets for U.S. wood product exports, especially logs and lumber shipped to China, Japan

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and Vietnam. For each of the three port regions, log and lumber exports represented the most significant exports to Asian countries in 2016 (Fig. 2). The only exception to this was wood chip exports to Japan out of the West. Most U.S. wood pellet exports are shipped to the EU, and more specifically, over 90 percent of all U.S. pellet exports are sent to the U.K. (Fig. 3). Virtually all (99.9 percent) of the 4.6 million MT of wood pellets exported from the continental U.S. are exported through South ports. Not surprisingly, most of the wood pellets exported from the U.S. to Asian countries pass through West Coast ports. While the volume is miniscule compared to South exports to the U.K., at least 309 MT of pellets were shipped to Asian countries in 2016, primarily out of West ports. According to United Nations data, the Asian wood pellet import market was approximately 1.7 million MT in 2015 (Fig. 4). By comparison, the U.K. imported 6.5 million MT of pellets during the same period. While the Asian regional market is roughly one-quarter of the size of the U.K. market, the market is young and on a bit of a learning curve. • The largest Asian pellet importer in 2015 was South Korea, which imported approximately 1.5 million MT, or 85 percent of the Asian market for imported pellets. South Korea imported over 1.0 million MT (70 percent) of its pellets from Viet-

nam, and an additional 0.4 million MT (29 percent) were imported from Malaysia, Canada, Russia, Indonesia and Thailand. Approximately 18,800 MT of pellets were imported to South Korea from the U.S.

• Japan imported 232,400 MT of pellets in 2015, which represented roughly 13.5 percent of the Asian market. Approximately 146,200 MT (63 percent) were imported from Canada, 57,900 MT (25 percent) were

APRIL 2017 | BIOMASS MAGAZINE 53

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imported from China and 27,400 MT (12 percent) from Vietnam. • Together, other Asian countries imported approximately 24,600 MT of wood pellets in 2015, primarily from Malaysia (13,100 MT), Indonesia (6,200 MT) and China (2,400 MT). The Japanese government recently approved nearly 3.2 GW of biomass-fired capacity (approximately 500-plus MW are already commissioned), which represents a new opportunity for global wood pellet manufacturers. Asian biopower producers will require security of supply to ensure financing and ongoing operations and, as evidenced by Canada’s significant exports to Japan, these markets are already receiving high-quality wood pellets from North America. With abundant and sustainable forests and a wood export infrastructure that is already in place as a result of other forest product exports, U.S. biomass and pellet producers are well positioned to capitalize on this increase in demand.

Author: Stan Parton Bioenergy Practice Manager, Forest2Market stan.parton@forest2market.com www.forest2market.com Data Notes: • All data have been converted from kilograms to metric tons. • US export data include only vessel (seaborne) trade. In the U.S. export data, “logs” refers to HS code 4403; “lumber” to HS code 4407; “wood chips” to HS code 440121 and 440122; “wood pellets” to HS code 440131. • Asian wood pellet import data use imports from the Comtrade database for HS code 440131. • The U.N. Comtrade database reported 18,021 MT of wood pellet imports under the label “Other Asia, nes.” Because the FAOSTAT database reported the same volume associated with Taiwan, we have labeled it as such. • The data years reported in the U.S. export and Asian import data are different, and, even in the same data year, import and export data may not align perfectly. As such, discrepancies between the export and import data are normal.

54 BIOMASS MAGAZINE | APRIL 2017

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FIGURE 1 SOURCE: U.S. EPA

Addressing Biomass Energy 'Alternative Facts' Recent assertions of a new report on biomass energy are grossly inaccurate. BY WILLIAM STRAUSS

roviding misleading, inaccurate, and sometimes outright fiction as facts could be called propaganda. With overtones of Orwell’s novel Nineteen Eighty-Four, the term “alternative facts” has recently been coined. Either way, it is biased and misleading information that is used to promote a point of view. The recently released paper by the Chatham House is a study that contains many inaccurate statements about the use of

wood for energy. Those statements are presented as facts, or as uncontested conclusions. This article will focus on the study’s discussions that pertain to the sourcing of raw materials for industrial wood pellets. Throughout the study, there is frequent reference to what it claims is an important distinction regarding how trees are used after harvest. From that point of view, making lumber is okay, but using the wood to produce wood pellets for energy is not. The

study also frequently states that the harvest of trees cuts short their ability to continue sequestering carbon. The following quote from page 24 of the Chatham House paper embodies both of those concepts. “This argument implies that, once they have grown, what happens to trees later—whether they are left to grow further, or harvested and made into wood products, or harvested and burnt for energy—somehow makes no difference to car-

56 BIOMASS MAGAZINE | APRIL 2017

CONTRIBUTION ¦

bon concentrations in the atmosphere. This is obviously not the case.” That quote, which captures a logic presented in many other places in the Chatham House paper, presents a premise that is false and an “obvious” conclusion that is wrong, setting up a dichotomy that does not represent reality in order to justify inaccurate conclusions about the carbon impacts of using wood for energy. At the heart of the matter, it appears that the study does not understand how the forest products industry operates. In the U.S. and Canada, and many other countries, there are vast working forests whose purpose is to produce the raw materials for many industries. Those forests are valued assets to the landowners, tree farmers and the buyers. Sawmills, pulp mills, and many other wood products mills, including pellet mills, depend on a continuous daily input of wood to produce products that are used in one way or another by just about everyone, every day. To enable and ensure a continuous supply of raw material, the quantity of the logs and chips coming into the mills cannot exceed the growth rate of the surrounding managed forest. Otherwise, the mills, worth hundreds of millions of dollars, would have to close once they depleted the resource they depend on to operate. Sawmills, pulp mills, and pellet mills are sized to match the ability of the surrounding working forest to supply affordable wood, every day, for decades. Sawmill, pulp mill, and pellet mill business models require good forestry practices that yield a sustainable outcome. But beyond that, particularly for industrial wood pellets being exported from the U.S. and Canada into the U.K. and other nations, there are rigorous certification schemes that demand auditing to prove that the forests are not being depleted, and that the stock of carbon held in the forests is not being reduced. The millions of hectares of working forests in North America that supply the forest products industries are like the mil-

lions of hectares of cropland in North America. The trees, whether grown on large plantations in the southeast U.S. or in the immense managed hardwood and softwood stands in the northern states and Canada, are being grown to be harvested. These forests are dynamic systems that are in many stages of growth. There are mature trees that are ready to harvest, areas of new growth, and many plots that are in stages of growth between seedlings and mature trees. The purpose of tree farming is to supply wood fiber and its many byproducts to industry. Privately-owned forests in the U.S., which make up about 60 percent of all U.S. forestland, are managed to continuously produce the raw materials for making lumber, paper, pellets, and other products derived from wood, and hold billions of tons of carbon. The landowners of those

private forests and the workers who manage and harvest trees get paid for growing and producing wood fiber, not for sequestering carbon. However, the inherent sustainability of the resource that accrues from good forest management practices means that the aggregate carbon stock held in private forests are not being depleted. In fact, quite the contrary. Figure 1 shows the annual carbon sequestered in U.S. forests. The larger the negative number, the more carbon that is being captured in U.S. forests, whose carbon sequestration has increased by 13.6 percent over the past 25 years. Figure 2 shows the total carbon held in privately owned U.S. forests by state, and the percentage of U.S. forests that are privately owned. Most privately owned forests are working forests growing trees for the forest products industries.

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Contrary to the either-or implications by the Chatham House study regarding harvesting trees versus carbon sequestration, a steady supply of raw materials for the forest products industries, including pellet production, does not mean reducing carbon stocks. But if the landowners stopped tree harvesting altogether? Would the Chatham House counterfactual be true? Would carbon stocks grow? Private owners of working forests are farmers who depend on the forest products industries for income. As long as there is demand for lumber, paper, chemicals derived from wood fiber, and other end products made from wood, forests will be grown to be harvested. Sustainable tree farming, i.e., continuously renewing forests, does not degrade the carbon sink function of working forests. For any forest, there are diminishing returns to carbon sequestration as trees in

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the forest age. For many years, the growth rates and carbon sequestration rates increase as the trees in each plot age. But all forests reach an inflection point, and then an equilibrium at which the growth rate and the mortality rate equalize and the stock of carbon held in the forest stabilizes. There is very little added carbon benefit after a plot in the Figure 3 model reaches about 35 years old. The model also illustrates why there is no net new carbon added to the atmosphere if the stock of new growth on the landscape equals the stock of the harvested plot (i.e., the harvest rate does not exceed the growth rate). Suppose the tree farmer has 35 plots across the landscape of her forest in different stages of growth. In Figure 3, the carbon sequestered by each of the younger plots equals the carbon held by plot 35. If all of plot 35 were made into pellets, which is highly unlikely, and the carbon was released from the combustion of the

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pellets made from that harvest, that carbon would be sequestered by plots 1 through 34 over the next year. In the real world, the harvest, conversion to pellets, and combustion of those pellets is continuous throughout the year, across many landscapes. The CO2 released in combustion is absorbed contemporaneously by the new growth in the many younger plots that match or exceed the removals from mature plots. Sustainable forestry practices, mandated by the sustainability criteria that qualifies wood pellets for use in U.K. power stations, assure that the biogenic carbon cycle continuously sequesters at least as much carbon as is released by the combustion of pellets. There is no such thing as a carbon debt if the stock of carbon held in the forest is not reduced. Further undermining the Chatham House study is another false premise. The studyâ&#x20AC;&#x2122;s author does not seem to understand that harvested trees have more than one purpose. For the most part, mature trees are not harvested just to make lumber or just to make wood pellets. The landowners, foresters, and loggers work together to maximize

the value and productivity of the working forests. The study is correct in stating that the preferred raw material for wood pellet production is sawmill residuals (sawdust, chips and shavings). What was sawmill waste becomes a valued feedstock for pellet production. In many locations, sawmill residuals from structural lumber production are abundant, and they supply much of the raw material needed to produce wood pellets. In other locations, there are insufficient sawmill residuals. In those locations, the pellet mills, just like the pulp mills, use of the nonsawlog portions of the tree. Just as sawdust is a byproduct of sawmilling, pulp or pellet grade wood chips are a byproduct of growing and harvesting trees for lumber production. The highest value for tree farmers from a harvested tree is the sawlog. This is the lower portion of the tree that is large in diameter, and free from defects that would preclude producing lumber. The upper portion of the harvested tree is either too low in diameter, or is not straight and defect free, and therefore cannot be sawn into boards. That portion of the tree typically

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has been debarked and chipped for use in pulp and paper mills. Thinnings occur once or twice over the growth period of the mature trees. Imagine trying to grow food crops without managing how many stems per acre are planted. If the plants are too crowded, productivity would be very low. That same logic applies to working forests. Selective thinning improves the growth rate and health of the remaining trees. The stands are thinned to allow the remaining trees to grow straight and tall, in order to maximize the production of sawlog quality timber. The thinnings typically have stems that are too small in diameter or are not straight enough for sawlogs, but they are suitable for producing wood chips for the pulp and paper industry or for wood pellets. There is no black or white, mutually exclusive decision making to either use the wood for lumber or for pellets. The same tree provides both. The Chatham House studyâ&#x20AC;&#x2122;s thesis that there are two distinct alternatives for the use of harvested trees is wrong. Recognizing that error in their logic leads us to conclude that if they are okay with harvesting

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CONTRIBUTION ¦

wood to make lumber, they should be okay with using the upper portion of the tree and the thinnings for making pellets. Some pellet plants, under specific circumstances during which there are no higher and better use for the wood, use whole logs from mature trees to make pellets. The Chatham House study mentions the Vyborgskaya pellet mill in Russia, and implies that there is a false labeling of the wood as “waste.” The study lumps Enviva, the largest wood pellet producer in the U.S., into the same accusation. If the reader only depends on the information in the report, he or she would have the impression that these pellet mills are sourcing wood that could have been used for lumber production, or worse, are using wood that was harvested with no regard for the health of the forests. The study presents incomplete information that allows the reader to make incorrect conclusions. The procurement of wood must be put into the context of the forest products industry in the region, and on the suitability of the logs used in that pellet mill for other purposes. About 80 percent of the whole logs going into the Vyborgskaya plant are

aspen. Aspen is a relatively soft, nonconiferous tree that is not suitable for structural lumber, and thus has very limited demand for sawmilling. Using aspen for pellet production is helping to improve the health and future productivity of the forest, and is providing a paying market for an otherwise unwanted species. Regarding Enviva, several peer-reviewed studies examining areas from which Enviva pellet plants procure wood have shown that the wood procurement practices used by Enviva provide a valued end use to otherwise nonmerchantable trees. The studies show that providing a market for otherwise nonmerchantable wood allows private forests that have deteriorated into nonmerchantable states to be managed into plots that will sustainably yield valued timber in the future for their owners and provide better habitat for wildlife. The Chatham House study does not tell that side of the story. There is certainly a place for independent and critical oversight of the industrial wood pellet sector. There are some areas of the world where industrial wood pellets are produced from questionable feedstocks.

There are some end users of industrial wood pellets who are less than rigorous in certifying the credentials of the producers. But the U.S. and Canada are not one of those places in the world, and the U.K.’s end users do engage in rigorous certification (as do those in most other jurisdictions). The Chatham House study is misguided in its focus. Finally, the forest products industry in evolving. As the demand for paper declines, the opportunity for pellet mills to use the raw materials that would have otherwise gone to pulp and paper mills increases. In just one U.S. state, Maine, there have been six pulp mill closures in the past two and a half years. Those pulp mills used more than 2 million tons per year of biomass that could be made into pellets. The pellet industry will replace much of what is being lost. That is an alternative future that does not depend on alternative facts. Author: William Strauss President, FutureMetrics williamstrauss@futuremetrics.com 207 824-6702

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