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Pellet Mill Magazine
Contents »
Advertiser Index 44 2014 International Biomass Conference & Expo 4 2014 Pellet Producer Map 20 Airoflex Equipment 11 Altentech Power, Inc.
40 AMANDUS KAHL GmbH & Co. KG 2 Andritz Feed & Biofuel A/S 24 Basic Machinery Co., Inc. 7 Biomass Industry Directory 35 BRUKS Rockwood 12 Buhler Inc. 39 CPM Roskamp Champion 28 Dieffenbacher 25 Evergreen Engineering 16 FLAMEX Inc. 22 GreCon, Inc. 30 Hurst Boiler & Welding Co. Inc. 34 Industrial Bulk Lubricants 21 KEITH Manufacturing Company
Q3 2013 | VOLUME 3 | ISSUE 3
FEATURES 18 PORTS Shaping Up to Ship Out
Ports and producers are joining forces to satisfy overseas pellet demand. By Anna Simet
26 SUSTAINABILITY Reaching for Sustainability
Certification strengthens pellet producers’ role in the marketplace. By Chris Hanson
32 PRODUCER PROFILE Pellet Production in Wisconsin’s North Woods A look at Indeck Ladysmith’s operations. By Tim Portz
36 OUTLOOK Domestic, Global Outlook
Continued growth in pellet markets forecast. By Susanne Retka Schill
CONTRIBUTION 32 HARVESTING New Markets Call for New Management Practices
Forest Guild retention and harvesting guidelines fill the gap. By Michael Debonis
DEPARTMENTS 05 EDITOR’S NOTE The Table is Set By Tim Portz
31 MEGTEC Systems Inc. 23 Oxidizers, Inc. 14 Process Baron
06 INDUSTRY EVENTS 08 PELLET PLATFORM
The Case for a Wood-to-Energy Check-off By Owen Carlton
13 RUF U.S., Inc. 15 SAMSON Materials Handling Ltd.
09 TESTING GROUNDS
Quality Management to Meet Expanding Standards Requirements By Chris Wiberg
17 SCHADE Lagertechnik GmbH 29 Vecoplan LLC
10 INDUSTRIAL INSIGHT
UK Sustainability Criteria Provide Policy Certainty By Seth Ginther
41 Vecoplan Midwest, LLC 33 Wolf Material Handling Systems
12 BUSINESS BRIEFS 14 NEWS 42
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Q3 2013 | PELLET MILL MAGAZINE 3
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Editor’s Note »
The Table is Set
Tim Portz
VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR tportz@bbiinternational.com
The United Kingdom’s Department of Energy & Climate Change released its report Aug. 22 entitled “Government Response to the consultation on proposal to enhance the sustainability criteria for the use of biomass feedstocks under the Renewables Obligation.” While the report’s title is a mouthful and takes a moment to get one’s arms around, its general premise is quite clear. With the publication of the report and the decisions it outlines, the U.K. is making plain its intention to leverage the carbon sequestering attributes of healthy forests in its efforts to drive carbon dioxide out of its energy portfolio. In his page-10 column, Seth Ginther, executive director of the U.S. Industrial Pellet Association, succinctly outlines the main points of the report and draws attention to the decision by the DECC to buttress these decisions against reform until 2027, allowing some wiggle room to accommodate any changes that may take place in European Union or international law. Clearly, the policymakers and their advisors inside the DECC are well aware of the profound impact that longterm policy certainty provides to the broader investment community. And, as this issue highlights, significant investments all along the production and distribution chain will have to be made to satisfy foreign demand for pellets. In Anna Simet’s page-19 feature, “Shaping Up to Ship Out” she reports on the broad investments being made all along the Eastern Seaboard and the Gulf Coast as U.S. ports ready themselves to handle the volumes of wood pellets that will be flowing through their facilities within 12 months. To put an even finer point on this, she reports in the feature that the Port of Brunswick in Georgia deepened its channel from 30 to 36 feet so that larger vessels could be berthed and filled with pellets. Shipping channels don’t get deepened to satisfy fleeting market opportunities. Port owners, their state governments and investors are convinced that demand for U.S. wood pellets is here to stay. Finally, the DECC report also establishes that all of this demand must be met with a strict adherence to established sustainability guidelines. As this issue establishes with a page-26 feature by staff writer Chris Hanson and a page-32 contribution by Michael DeBonis, president and executive director of the Forest Guild, forestry professionals, certification bodies and auditing professionals stand ready to ensure this rapidly growing demand is met while delivering maximum environmental, social and economic benefits.
Q3 2013 | PELLET MILL MAGAZINE 5
Industry Events »
Editorial
2013 Exporting Pellets Conference OCTOBER 27-29, 2013
PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz tportz@bbiinternational.com MANAGING EDITOR Suesanne Retka-Schill sretkaschill@bbiinternational.com CONTRIBUTING EDITOR Anna Simet asimet@bbiinternational.com NEWS EDITOR Erin Vogele evoegele@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com
Fontainebleau Miami Beach Hotel Miami Beach, Florida Join us in Miami for USIPA’s 3rd Annual Exporting Pellets Conference. This is the only U.S. conference sponsored by and for the industrial wood pellet industry. The conference provides the opportunity to network with executives and professionals from across the industry. Speakers and panelists this year will include all major European utilities, major U.S. producers, and experts in all areas of the supply chain. New this year will be a technical workshop on the closing afternoon of the conference hosted by the International Energy Agency Bioenergy Task 40. Don’t miss out, register today. 804-775-5894 | www.theusipa.org/conference
International Biomass Conference & Expo
STAFF WRITER Chris Hanson chanson@bbiinternational.com
MARCH 24-26, 2014
Orange County Convention Center Orlando, Florida 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 is the world’s premier educational and networking junction for all biomass industries. 866-746-8385 | www.biomassconference.com
Art ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Elizabeth Burslie bburslie@bbiinternational.com
Publishing & Sales
International Fuel Ethanol Workshop & Expo
CHAIRMAN Mike Bryan mbryan@bbiinternational.com
JUNE 9-12, 2014
CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT, SALES & MARKETING Matthew Spoor mspoor@bbiinternational.com BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse hbrockhouse@bbiinternational.com ACCOUNT MANAGERS Kelsi Brorby kbrorby@bbiinternational.com Chip Shereck cshereck@bbiinternational.com
Indiana Convention Center Indianapolis, Indiana Now in its 30th year, the FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine. 866-746-8385 | www.fuelethanolworkshop.com
National Advanced Biofuels Conference & Expo
MARKETING DIRECTOR John Nelson jnelson@bbiinternational.com
OCTOBER 13-16, 2014
CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com ADVERTISING COORDINATOR Marla DeFoe mdefoe@bbiinternational.com
Subscriptions to Pellet Mill Magazine are free of charge—distributed twice a year—to Biomass Power & Thermal subscribers.To subscribe, visit www.BiomassMagazine.com or you can send your mailing address to Pellet Mill 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 (866) 746-8385 or service@bbiinternational.com. Advertising Pellet Mill 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 Pellet Mill Magazine advertising opportunities, please contact us at (866) 746-8385 or service@ bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Pellet Mill Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to sretkaschill@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.
Hyatt Minneapolis Minneapolis, Minnesota Produced by BBI International, this event will feature the world of advanced biofuels and biobased chemicals—technology scale-up, project finance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry. With a vertically integrated program and audience, the conference is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, 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
Please recycle this magazine and remove inserts or samples before recycling TM
6 PELLET MILL MAGAZINE | Q3 2013
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Q3 2013 | PELLET MILL MAGAZINE 7
« Pellet Platform
Presenting the Case for a Wood-to-Energy Check-off BY CARLTON OWEN
Divide and conquer is a great military or political strategy when used against an enemy. Not surprisingly, when we divide ourselves, it makes it much easier for our enemies to prevail. When I think about the forest sector, I’m reminded of a line from that great sage Pogo: “We have met the enemy and he is us!” Is the forest sector, and the pellet industry segment in particular, dividing itself and therefore vulnerable? As the fastest emerging segment of the broader forest industry sector, pellet fuels have attracted a great deal of attention…from supporters and detractors. I’m no longer caught short by attacks that come from those who make their careers by skewering any who harvest trees. What is concerning, though, is that the wood-to-energy industry segment may be following the path of dividing itself into ever smaller subsegments with too few resources and thus highly vulnerable Since its inception, the U.S. Endowment for Forestry and Communities has invested its effort to forge a brighter future for the forests and rural communities nested within them. We often try to emulate programs that have succeeded for others wishing to grow their markets and expand support. For example, we’ve focused much attention on agriculture and its use of “commodity check-offs”—what, in U.S. Department of Agriculture lingo, are termed “research and promotion programs.” From milk to mushrooms these programs have proven to be powerful and sustainable vehicles to help producer segments coalesce around common objectives. It is this con8 PELLET MILL MAGAZINE | Q3 2013
cept—focusing on what a segment has in common rather than spotlighting differences—that has served well. If a benevolent dictator for a day, I would lump all those who depend upon forests as the source of raw materials into a single entity. There wouldn’t be a Pellet Fuels Institute, U.S. Industrial Pellet Association, Biomass Power Association or Biomass Thermal Energy Council. Instead there would be a single group representing “renewable energy users of wood.” Even that group would be a division of a singular Forest Landowners & Forest Products Producers Association that included forest owners as well as wood and paper makers and more. One voice from the broader forest industry sector, well-funded and focused, would be far more effective than many poorly funded voices, each delivering a different message. But, it’s too late for that. So, what’s the next best thing? In my mind, it would be to have each industry segment—all those who produce a similar product—collaborate to create a commodity check-off. For instance, producers of wood-for-fuels, or green energy, would be included in a “Wood-to-Energy Check-off.” (Pulp mills and sawmills would not be included as their resources are already covered by other check-offs.). The benefits of such an approach are many. Among them, a long-term, well-funded vehicle to address important research and development needs (e.g. real answers to the carbon balance question; development of advanced products such as densified, torrefied pellets, etc.), as well as science-based information that helps all—consumers
and decision makers—operate from a base of sound facts. Unlike public relations campaigns that suffer from too little funding and too limited duration that are all too often undermined by free riders (those who don’t pay their fair share), a check-off would be fair, equitable, flexible and durable. As we’ve discussed this idea with leaders in the wood-to-energy segment, we’ve heard the same responses we got when we launched the idea for the softwood lumber check-off that is now in place and making a difference. Among the tried-and-true initial responses: Now is not the right time. Others in the segment will gain an advantage over my interests. We can’t afford it. Funds can’t be used for lobbying. There is an old proverb about the best time to plant an oak. While the perfect time was 80 years ago, today is the best option available. We can’t do anything about yesterday and waiting for a perfect tomorrow won’t do it. For the wood-to-energy segment to have a bright future, today is the best time to start building an approach to research and promotion that will serve for years to come. As a “retired benevolent dictator,” my request would be that all factions of this sector gather to craft a brighter future that included a check-off as a foundational tool. In the meantime, to learn more about the power of these tools visit the USDA website with this shortened link: http://tinyurl.com/ checkoffPrograms. Author: Carlton Owen President, CEO, U.S. Endowment for Forestry and Communities 864-233-7646 carlton@usendowment.org
Testing Grounds »
Quality Management to Meet Expanding Standards Requirements BY CHRIS WIBERG
Quality management of the pellet production process is essential for assuring that the end product conforms to the intended product quality requirements. Going back 20, 10 or even five years, those for the pellet industry have been relatively loosely defined. As a result, quality management systems commonly in place at pellet production sites have historically not been as robust as the quality processes commonly used by industries with strict standards such as the automotive or pharmaceutical industries, where accreditation to quality management standards such as ISO 9001 are the industry norm. The game changer for the pellet industry is that over the past five to 10 years pellet quality requirements have been defined by the Pellet Fuels Institute, the European Pellet Council, the European Union’s standardization body CEN, the International Standards Organization, the International Wood Pellet Buyers and several large-scale European utilities that have developed their own quality requirements. With these new standards, it is essential that pellet production facilities, both newly constructed and those that have been in operation for many years, adopt quality management systems that assure conformance. Two standards provide guidance for the development of quality management systems: the PFI’s Residential/Commercial Densified Fuel QA/QC Handbook and the EPC’s ENplus handbook. These quality management schemes outline how producers can certify their produc-
tion and include a quality mark that is placed on product packaging or shipping documents to signify compliant product. Through my work to help facilitate the adoption of the PFI and ENplus quality management schemes at several production sites within the U.S. and Canada over the past several months, I now have a much better feel for what pellet production facilities commonly have in place to manage their product quality and what is required to convert these practices into quality management systems that comply with these standards. In several facilities, the quality management system is already quite robust. At the most advanced level, some producers have used standards such as ISO 9001 as a guide for their quality management systems and have developed highly detailed quality manuals, standard operating procedures, work instructions, data tracking systems, etc. It is actually more common for production facilities to not have a written quality manual. It is not that quality isn’t considered important or that quality processes are not in place, but rather that the quality management system is a relatively loose system of practices that at the end of the day works for the facility. What I find is that most of the components required in the PFI or ENplus quality management schemes are already in place, but are not well-documented. As with any formal quality management standard, the PFI and ENplus schemes require a written quality manual and quality practices to be documented. Documentation is usu-
ally the biggest job that production facilities have in converting existing quality management systems into ones that qualify under the PFI or ENplus schemes. In addition to the manual, setting up an internal laboratory can be a large undertaking. An internal lab is not required under the PFI standard, but is highly advised and most often necessary. ENplus does require an internal lab. Operating an internal lab can be a challenge. It involves purchasing special equipment, setting up a lab layout, learning testing procedures, calibrating equipment and training staff. These tasks are not that difficult, but are usually poorly understood. As a result, most of the deficiencies I note when performing PFI or ENplus compliance audits are related to the lab. Pellet quality standards are now in place. Because we are on the leading edge of the standard adoption, there is still time to convert old systems into new ones. But as I have seen firsthand, many producers who seek assistance in developing and implementing a quality management system do so with a sense of urgency because a potential opportunity requires the system. I encourage a proactive approach. Developing or converting a quality management system takes time. Author: Chris Wiberg Manager, Biomass Energy Laboratory 218-428-3583 cwiberg@tpinspection.com
Q3 2013 | PELLET MILL MAGAZINE 9
ÂŤ Industrial Insight
UK Sustainability Criteria Provide Policy Certainty BY SETH GINTHER
The recently released U.K. Department of Energy & Climate Change criteria for the sourcing of sustainable biomass recognize the robust sustainability practices of U.S. industrial wood pellet manufacturers and provide much needed policy certainty that will help grow U.S. manufacturing. U.S. producers will be able to use a number of long-standing forestry certifications, as well as techniques such as regional risk assessments to prove sustainability. Implementation of the new DECC criteria begins with reporting in April 2014, becoming mandatory a year later for electrical generators with capacities of 1 MW and above. Generators must demonstrate they are meeting the criteria for the U.K. Renewables Obligation and independent audits of the sustainability report are required. To ensure that biomass power delivers genuine greenhouse gas (GHG) savings and to promote good practice and innovation across the supply chain, the U.K. will bring in tightening GHG life-cycle trajectories. In a series of steps over time, it will require industry to achieve larger savings than the current 60 percent emission reduction compared to the EU fossil electricity average. Before April 2020, existing biomass power, cofiring and conversions, with and without combined heat and power will remain on the current target of 285 kilograms of CO2 equivalent per megawatt hour (kg CO2eq per MWh) to reflect long-term contracts already in place. New dedicated biomass facilities, however, will be subject to a 240 kg CO2eq per MWh target (a 66 percent
10 PELLET MILL MAGAZINE | Q3 2013
saving) to reflect the higher cost of carbon savings. After April 2020, all biomass power generators will be placed on the same GHG trajectory with a 73 percent savings target of 200 kg CO2eq per MWh in 2020 and a 75 percent savings target of 180 kg CO2eq per MWh in 2025. The tougher GHG targets will be applied as an annual average (subject to a ceiling) to allow generators to better manage procurement risks. Currently, RO land criteria are designed with sustainable agriculture in mind, rather than forests. The new sustainable forest management criteria are based on the U.K. timber procurement policy (UK-TPP) which draws on established sustainable forest certification schemes that cover a range of social, environmental and economic issues relating to forests. To enable investment in new biomass power generation and biomass feedstock supply-chains, the U.K. will not change the sustainability criteria before 2027. It reserves the right to make changes in response to European Commission recommendations on bioenergy, or to EU and international law. The final DECC sustainability criteria for solid biomass reaffirm that industrial wood pellets sourced from the U.S. will play a key role in providing the U.K. (and the EU) with an abundant, sustainable and carbon beneficial energy source that provides consistent base-load renewable power. The criteria recognize that forest cover and carbon sequestration are steadily increasing in the United States. The U.S. has more than 750 million
acres of forest and the net volume of trees per acre has increased in all regions for more than 50 years. Moreover, the total acreage of forestland in the U.S. is within 1 percent of what it was 100 years ago. In the Southeast, where the largest supply of wood pellets shipped to Europe is produced, the net volume of trees per acre has increased 94 percent since 1953, meaning net growth has exceeded removals on a consistent and long-term basis. Forest carbon sequestration in the U.S. has increased 31 percent in two decades, from 701 million metric tons in 1990 to 922 million metric tons in 2010. U.S. forests capture more carbon than the annual emissions produced by the United Kingdom and Spain combined. These impressive statistics are made possible because forests remain working in the U.S. Robust markets incentivize landowners in the U.S. to not convert forests into real estate developments, golf courses and the like. The industrial wood pellet industry provides landowners with a much-needed market for low-grade fiber and contributes to continuing to keep U.S. forests working, which in turn guarantees greater carbon sequestration. That is inarguably a net positive in the global battle against climate change. With policy certainty now in place in the U.K., the U.S. industrial wood pellet market is poised for growth. Author: Seth Ginther Executive Director U.S. Industrial Pellet Association 804-771-9540 sginther@hf-law.com
Business Briefs
PEOPLE, PRODUCTS & PARTNERSHIPS
ments with Timber Products Inspection to provide auditing and third-party laboratory testing.
Currant, AWF achieve PFI certification The Pellet Fuels Institute has announced Massena, N.Y.-based Curran Renewable Energy and American Wood Fibers, with locations in Circleville, Ohio, and Marion, Va., have officially qualified under the PFI pellet fuel standards program, which is a third-party certification program that provides standard specifications for residential- and commercial-grade fuel. The qualification is the result of work that Curran and AWF have done in conjunction with PFI, the American Lumber Standard Committee and Timber Products Inspection Inc. Both pellet producers have agree-
St. Joe Company, Enova sign LOI The St. Joe Company has announced it signed a letter of intent (LOI) with Enova Energy Group. Enova has expressed an interest in transporting 1 million or more metric tons of wood pellets using the AN Railway to the Port of Port St. Joe for further shipment to overseas markets. The project could also result in the development of port site facilities, provided that the port is capable of accepting vessels of adequate size for the shipment of commercial wood pellets. FutureMetrics paper highlights phase-zero analyses FutureMetrics LLC has published a white paper outlining how its prefeasibility,
“phase-zero” analyses for prospective pellet export projects can provide assistance in defining whether a project is feasible before significant financial resources are spent. As part of its phase-zero services, FutureMetrics’ partner, Innovative Natural Resources Solutions LLC, conducts a site wood study. The FutureMetrics team also completes a high-level site analysis that incorporates permitting, zoning and other siting issues. The team also addresses factors related to transportation, port storage and ship loading, and produces a financial analysis that identifies and quantifies critical risks and estimates project development costs and timelines. Drax, partners unveil scaled-up biomass railcar The Drax Group plc, Lloyd’s Register Rail and WH Davis have unveiled a biomass rail-car that features a capacity of more
Maximum production. Low operating cost. The Bühler RWPR-900 is the ideal pellet mill for your biomass applications. The RWPR was designed with massive roll bearings to withstand the extreme pressures of biomass pelleting. To ensure ease of operation the pellet mill is equipped with a simple V-belt drive system with minimal moving parts. This top of the line pellet mill provides an effective and efficient pelleting solution. For more information please visit www.buhlergroup.com.
Bühler Inc., PO Box 9497, Minneapolis, MN 55440, 763-847-9900 buhler.minneapolis@buhlergroup.com, www.buhlergroup.com
Heavy Duty Pellet Mill Maximum Production. Flexible controls optimize process Low operating costs. Rollers, dies and other wear parts are designed for maximum performance and longevity to increase uptime and profi tability. Safe operation. A combined overload shear pin and belt slip monitor protect the pellet mill from overloads or foreign material entering the die.
Innovations for a better world.
than 2,500 cubic feet, 30 percent larger than traditional U.K. railcars. The car is able to transport up to 71.6 metric tons of biomass. In addition to larger hauling capacity, the car features automatic magnetic door operation and efficient flow control to manage biomass loading and unloading. Drax has ordered 200 of the units to contribute to its coal to biomass conversion. The product was unveiled in July at the National Railway Museum in York, U.K. Viridis enters agreement with Ekman & Co. Viridis Energy Inc. has announced that its wholly owned subsidiary Scotia Atlantic Biomass Co. Ltd. has entered into an agreement with Ekman & Co. AB. Under the agreement, Ekman will serve as Scotia’s exclusive worldwide agent to market its entire wood pellet production. Ekman will provide Scotia with sales opportunities including
sales into different markets and market segments. The initial agreement spans 24 months and an aggregate projected wood pellet production of up to 240,000 metric tons.
vs. U.S. EPA, vacating the agency’s Deferral Rule. The court said the EPA provided insufficient legal justification to defer greenhouse gas regulation of biogenic emissions.
EPA administrator takes office The U.S. Senate voted to approve Gina McCarthy’s nomination to lead the U.S. EPA. Prior to her nomination, McCarthy served as assistant administrator for the EPA’s Office of Air and Radiation. She replaced former Administrator Lisa Jackson, who resigned in December 2012. Court vacates EPA Deferral Rule The U.S. Court of Appeals for the District of Columbia Circuit has ruled in the case of Center for Biological Diversity
C AT C H T H E
MARKET SHARE
EcoFuels plans port facility EcoFuels Pellet Storage LLC, a wholly owned subsidiary of ecoFuels LLC, plans to build a new pellet facility at the deepwater Portsmouth Marine Terminal in Porthsmouth, Va. The facility is expected to include two or more 50,000 metric-ton storage domes that will provide annual throughput of 1.5 to 2 million tons on a commingled basis. The company has a 20year lease on the port sites and expects to begin construction during the third quarter of this year. SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if available) to Business Briefs, Pellet Mill Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also email information to evoegele@bbiinternational.com. Please include your name and telephone number in all correspondence.
The Total U.S. Wood-Burning Appliance Market (including fireplaces, freestanding stoves, and inserts)
13% Market Share Pellet Appliances*
87% Market Share Briquette-Friendly Appliances*
YO U ’ V E B E E N M I SS I N G
Versati wood and biomass briquettes are quickly becoming Versatile a go g go-to -to biofuel for consumers all over the U.S. They are cclean, lea eaan, af affordable, and can be used in any wood-burning device ffrom fr rom mfi fireplaces replace and stoves to fire pits. Briquettes will open doors to new markets and d growth oppo opportunities for your business, and because they can be made from materials you already process (and then some), it’s simple to get started. Plus, with substantial savings on energy, maintenance, and labor, briquettes are cheaper to make per ton than pellets! What are you waiting for? For more information call 440-779-2747 or visit www.ruf-briquetter.com and catch the market share you’ve been missing! *Source: Hearth, Patio, & Barbecue Association – based on appliance shipments from 1998-2011.
Q3 2013 | PELLET MILL MAGAZINE 13
Pellet News U.K. pellet demand (in million metric tons) Consumption
Imports
Imports from U.S
2010
1.99
2011
2.72
1.015
0.274
2012
3.38
1.47
0.475
2013 (projected)
4.54
SOURCE: USDA FAS GAIN, EU BIOFUELS ANNUAL 2013
UK sets solid biomass sustainability standards The U.K. Department of Energy & Climate Change has announced that starting in 2015, the biomass industry must show its fuel is sustainable to receive financial support under the Renewables Obligation. According to the DECC, all electricity generators of 1 megawatt (MW) capacity or higher that use solid biomass or biogas feedstock will be required to demonstrate they are meeting prescribed sustainability criteria to claim support under the RO. The DECC estimates the 1 MW
threshold will cover approximately 98 percent of all biomass power generation in the U.K. Power producers covered by the sustainability standards will also be required to provide an independent sustainability audit with their annual sustainability report. In order to provide certainty to investors and developers, the DECC has indicated that there will be no additional unilateral change to sustainability criteria before April 2027.
Green Circle Bio Energy plans second plant Cottondale, Fla.-based Green Circle Bio Energy Inc. has announced plans to locate a $115 million wood pellet manufacturing facility at the George County Industrial Park in Lucedale, Miss., a community located approximately 40 miles northwest of Mobile, Ala. The 500,000-ton-per-year plant is expected to be operational in the spring of 2015. It will produce pellets for shipment from the Port of Pascagoula near the Mississippi-Alabama border to European markets. The Mississippi Development Authority provided assistance in support of the project for infrastructure need at the project site. George County also provided assistance to the facility. “We are looking forward to being a part of George County and its future economic growth. The Industrial Park is the ideal location for our expansion,� said Morten Neraas, CEO of Green Circle Bio Energy. The company also operates a pellet plant in Cottondale, Fla. The 560,000-ton-per-year facility began operations in 2008.
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14 PELLET MILL MAGAZINE | Q3 2013
Pellet News Âť Vertically designed plant breaks ground in Illinois MSW pellet operation planned in Maryland Goodfield, Ill.-based
PHOTO: CHIP ENERGY
Chip Energy recently broke ground on a biomass recycling and pelletizing plant. Once complete, the prototype plant will be capable of producing 100 tons per day of condensed biomass in the form of pellet, briquette and log products. The plant is designed to take in a variety of feedstock A PROTOTYPE FOR POTENTIAL Chip Energy’s pellet plant is sources, including wood configured in a highly efficient vertical design. waste, energy crops and In addition to owning Chip Energy, agricultural residues. According to Paul Wever also operates a construction Wever, president of Chip Energy, the plant equipment company that prototypes is expected to be operational during the and constructs specialized tools for the third quarter of this year. off-highway equipment industry. He has The plant is being constructed using leveraged that experience to design and recycled shipping containers configured in a develop the pellet plant, with the goal of vertical fashion. The footprint of the plant supplying the equipment and technology to spans only 70 feet by 104 feet, but reaches a range of customers, particularly those in 70 feet high. Wever said the design increases the power and cellulosic fuels industries. the efficiency of the facility.
Washington County, Md., recently announced it is forming a public-private partnership with American First In. to launch a waste-to-renewable-energy initiative, which will be implemented in two phases. During phase one, a facility will be constructed to convert municipal solid waste (MSW) into refuse-derived fuel pellets. The second phase will include the construction of a gasification plant to process a portion of those pellets into drop-in biofuels. According to Julie Pippel, Washington County director for environmental management, construction on the pellet plant is expected to begin next year, once all permitting requirements have been met. Construction on the second phase would begin 18 months after phase one. The facility developed under phase one will include recycling, sorting, shredding and pelletizing operations. All nonrecyclable components of MSW will be processed into fuel pellets. Washington County will provide MSW feedstock to the plant. The existing landfill will also eventually be mined to recover MSW.
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« Pellet News North American pellet exports set record
Canadian pellet capacity, production Capacity (million metric tons)
Production
2010
2
1.32
2011
2.931
1.934
2012
3
2
2012 (estimated)
3.707
2.54
2013 (projected)
3.707
3.226
SOURCE: USDA FAS GAIN, CANADA BIOFUELS ANNUAL 2013
Canadian pellet production, consumption grows rapidly An annual Canadian biofuels report filed with the USDA Foreign Agricultural Service’s Global Information Network provides an overview of the rapidly expanding Canadian pellet industry. Citing data provided by the Canadian Wood Pellet Association, the GAIN report notes that Canada was home to 42 pellet plants in 2012, with a combined capacity of 3 million metric tons. Approximately 65 percent of that capacity is located in British Columbia. In 2010, the country had only 33 plants with a combined production capacity of 2 million tons. Capacity is expected to reach 46 plants and 3.707 million tons this year. Canadian pellet producers have utilized
approximately 66 percent of capacity in recent years, producing 2 million tons of pellets in 2012. Production is expected to reach 2.54 million tons this year, and increase to 3.226 million metric tons in 2014. Last year, Canadian producers exported 1.37 million metric tons of pellets. Exports are expected to increase to 1.739 million tons this year, and 2.209 million metric tons next year. Domestic consumption of pellets in Canada has also increased in recent years, rising from 65,000 metric tons in 2011 to 233,000 metric tons last year. Consumption is expected to reach 690,000 metric tons by next year.
North American wood pellet exports reached a new record of over 1 million tons during the first quarter of the year, according to Wood Resources International LLC’s North American Wood Fiber Review. According to the review, pellet exports from the two primary pelletproducing regions in North America— the U.S. South and British Columbia— showed no signs of slowing in early 2013, with growth likely to accelerate during the second half of the year. Export volumes from the U.S. South to Europe in 2012 are estimated to be in excess of 1.7 million tons. Canadian exports for the year equaled approximately 1.5 million tons. According Wood Resources International, the U.K. continues to be the primary destination for North American pellet exports. More than two-thirds of export volumes from the U.S. and Canada went to the U.K. during the first quarter of this year.
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Pellet News » Irish plant to produce 50/50 renewable content briquette
Zilkha closes on financing package for Alabama plant
U.K.-based CPL Ecoal50 specifications Industries has anRenewable content 50% nounced plans to build CO2 emissions 40% lower a new Ecoal50 producHeat output 38% hotter tion facility at the Port Smoke production 80% less of Foynes near LimerApplication Open fires, glass front stoves ick, Ireland. Ecoal50 is a blended home heating SOURCE: CPL FUELS IRELAND fuel that contains 33 percent biomass, 17 The company’s board has elected percent molasses and 50 percent fossil to make the €20 million ($26.54 million) fuels. According to the company, it has investment in the facility due to a recent been selling the briquette fuel in Ireland announcement by Ireland’s Environfor more than a year. ment Minister Phil Hogan that the sale The proposed facility will have an of smoky coal would be banned in the initial production facility of 200,000 future. CPL has specified that investmetric tons, but will be designed to enment in the new plant is subject to planable an expansion to 300,000 metric tons. ning, suitable implementation of the When fully operational, the plant will take proposed ban, and appropriate governin approximately 80,000 tons of biomass ment support for biofuels. per year. The plant is currently expected to begin operations in 2015.
Zilkha Biomass Fuels closed on an $18.8 million finance package in August to convert the former Dixie Pellet plant in Selma, Ala., to produce its waterproof Zilhka Black Pellets. The company acquired the idle facility in 2010 and will use the financing to renovate and retrofit the plant to produce 275,000 tons of Black Pellets per year. The Dixie Pellet plant operated for less than two years before closing. The plant features 15 pellet mills, as well as coolers, dryers, conveyers and loading facilities. Amcref Community Capital announced the closing. As the project’s sole federal and Alabama State New Markets Tax Credit allocate, Amcref was able to raise investments from U.S. bank and Stonehedge and attract other funding for the project. Unlike traditional compressed pellets, the Zilkha Biomass Pellet is waterproof and can be transported and stored outside like coal. The company’s first Black Pellet plant is located in Crockett, Texas. The 40,000-ton per-year facility began operations in 2010.
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ÂŤ Ports
PELLET LOADOUT: The cargo vessel Koningsborg is loaded with wood pellets at Georgia's East River Terminal at the Port of Brunswick.
18 PELLET MILL MAGAZINE | Q3 2013
Ports Âť
Shaping Up to Ship Out
Ambitious efforts of U.S. ports and pellet producers are keeping pace with soaring international wood pellet demand. BY ANNA SIMET
Q3 2013 | PELLET MILL MAGAZINE 19
« Ports In just a few years, wood pellet exports from the southeast U.S. to Europe have exploded, reaching nearly 2 million tons in 2012. In the first quarter of 2013 alone, export volumes were over 1 million tons, compared to total annual shipments of 750,000 tons only four years ago, according to a report by Wood Resources International. Existing pellet plants, as well as those under expansion, construction or proposed, have prompted multiple port improvements and upgrades to accommodate and capitalize on opportunities offered by the pellet industry buildout in the Southeast. From Florida to Georgia to Louisiana, ports and producers are joining forces to satisfy overseas pellet demand, largely prompted by foreign environmental policy and renewable energy incentives. Port of Port St. Joe Port of Port St. Joe • Offers direct access to the Intracoastal Waterway. Enova Energy Group, which has pro• Adjacent to more than 5,000 acres of developable real estate. posed multiple projects in the Southeast and • Existing navigational channel depths between 25 and 35 feet; plans to break ground on its first project by the federally approved between 35 and 37 feet. end of the year, has signed a letter of intent • Two separate bulkheads featuring nearly 2,800 linear feet. with the Port of Port St. Joe in Florida to trans• Barge access to inland rivers and waterways system. port a minimum of 1 million metric tons of • Served by AN Railway and connects with the CSX Transportation Class I wood pellets to the port via the AN Railway. mainline. That deal, however, is contingent on the port receiving funding to complete maintenance dredging of the port’s shipping channel to the velopment. “The PSJ Port Authority is the applicant and St. Joe is authorized depth. putting in the matching funds and spearheading the process, 75 to So far, things are progressing well. “Presently, the process of 25 percent.” application for the dredging funds is going through the normal proEasterlin says there’s been success in obtaining a $1 million grant cess,” says Ben Easterlin, Enova Energy senior vice president of de- from the Florida Department of Transportation, and the FDOT and
20 PELLET MILL MAGAZINE | Q3 2013
Ports » to disposal sites are big, cost variables will be determined as part of the permit process.” Enova is continuing to work through other due diligence related to the design and construction of rail and storage facilities and will enter discussions with the port’s planning department as they become final for local input, Easterlin adds. “All in all, I think it is proceeding on a normal course of plan and we haven’t encountered any issues to date.” Port of Pascagoula In April, the Mississippi legislature earmarked $10 million toward wood pellet export infrastructure that will be built at the deepwater Port of Pascagoula, plans for which have long been in the works. The facility will look similar to a grain elevator, consisting of silos, a truck unloading facility, rail cars and a conveyor delivery system to the wharf. It will be built at terminals E and F at Bayou Casotte Harbor. Port of Pascagoula Though $10 million won’t even cover half • Comprised of public and private terminals handling over 35 million tons of the cost of the facility, which will be up to of cargo annually. $30 million, the port and private sector termi• Consistently ranks as No. 20 in top ports in the nation for foreign cargo nal operators will also be investing in the projvolume. ect. The company that will primarily use the • Channel depths of 42 and 38 feet. port facility, Green Circle Bio Energy, operates • Rail service begins at the terminals of the Pascagoula River and Bayou a 560,000-ton pellet plant in Cottondale, Fla., Casotte Harbors, affording efficient port-rail connections. and is developing a $115 million, 500,000-met• Easy access to Interstate 10 and U.S. highway systems. ric-ton plant in George County, Miss., near the Port of Pascagoula. St. Joe are sharing the cost to perform a dredge-management plan and Deputy Port Director Allen Moeller says the port is hoping to fiobtain the state and federal permits to dredge. “This step is needed not just for the obvious—permits are needed to dredge— but more nalize its agreement with Green Circle and complete financing in the importantly, this step will give us a more precise cost estimate for fall. Besides the $10 million state bond, the project is being funded the dredging,” he says. “Since the method of disposal and distance with $15 million contributed by the port and $5 million from existing
Q3 2013 | PELLET MILL MAGAZINE 21
« Ports terminal operators. “We should be in position to go to construction some time during the first quarter of next year,” says Moeller. Though the Port of Pascagoula is the largest seaport in Mississippi and over 35 million tons of cargo move through the port annually, wood pellets have not been part of that load, he adds. “It’s a new project, and we’re excited and looking forward to getting it off the ground.” Port of Greater Baton Rouge • 230 miles from the Gulf of Mexico on the Mississippi River at the junction of the Gulf Intracoastal Waterway. • Ranks No. 13 among the top ports in the nation; 32nd in the world in total tonnage annually. • Channel depth of 45 feet. • Overall annual tonnage of 83.1 million. • Five berths, 3,000 feet of wharf frontage.
22 PELLET MILL MAGAZINE | Q3 2013
Port of Greater Baton Rouge At the end of 2012, Drax Biomass announced intentions to build two pellet manufacturing plants in Louisiana and Mississippi, as well as a port storage and loading facility at the Port of Greater Baton Rouge. The combined capacity of the new manufacturing facilities, Amite BioEnergy in Gloster, Miss., and Morehouse BioEnergy in Morehouse Parish, La., will equate to 900,000 metric tons of biomass pellets annually. Drax is locating its port-side storage and loading facility on property leased from the Port of Greater Baton Rouge, which will have the capacity to store approximately 80,000 metric tons of biomass pellets. The facility will be designed to accommodate delivery of pellets by rail and truck and is expected to be operational in 2014. Construction contracts have been concluded for the pellet plants, according to Drax public affairs specialist Melanie Wedgbury. “We have now broken ground and construction is now underway at both sites,” she says. “Construction of the port facility is also now underway.” Wedgbury says Drax is targeting the first quarter of 2015 for the start of commercial operations at Amite and Baton Rouge and the second quarter for Morehouse, with full capacity reached six months later. Also focusing on the Port of Greater Baton Rouge and moving forward with plans to build a plant in Port Allen, La., is Biomass Secure Power. CEO Jim Carroll says the detailed engineering scopes for the bidding process are expected to be released in early October, with construction commencing in December. “Phase 1 of the Baton Rouge project will consist of three operating lines capable of producing 340,000 metric tons of wood pellets each,” he says. BSP also plans to build a chipping plant on 50-acre site at the Port of Natchitoches. Wood chips from the plant will be transferred by barge to
Ports » the plant at Port Allen for processing. According to Carroll, the new facility will be designed with the flexibility to accept logs, wood chips, and residual materials by barge, and logs by rail during Phase 1. Phase 2 will add chip handling at the rail terminal. “The business model that has been developed for the Baton Rouge plant takes advantage of the avoided cost of transshipment of pellets from the plant to a port of departure,” Carroll says. “A comprehensive onsite storage facility and ship loading equipment rated at 2,000 metric-tons-perhour is planned, designed to service Handimax and Panamax bulk carriers. The avoided transshipment cost and port fees will be applied to the raw material delivery network, effectively extending the reach of the new plant.” BPL expects production of pellets to commence first quarter of 2015. Keystone Jacksonville Terminal In 2009, Keystone Industries began developing the Keystone Jacksonville Terminal from scratch on a brownfield site on the St. Johns River in Jacksonville, Fla. The terminal received its first Panamax vessel July 5, 2011, according to Phil Hetzner, director of project finance for Keystone Industries. The terminal currently receives aggregate, iron oxide, chips and fly ash on incoming vessels, and ships out scrap metal and wood chips. And, no surprise, given the characteristics of the deep-water port, wood pellets may soon be added to that list. Keystone is about 60 percent done building a unit train rail loop, to be completed this year. A rail dump will be installed by next April. “We’re in discussions with the railroad, and we’re quite confident that pellets can be hauled from a fair distance economically and come into our terminal for shipment.” According to Hetzner, interest has not been lacking. “We’ve been in multiple conversations with pellet producers, project developers and European utilities for years,” he says. He has worked on pellet projects for about five years, he adds, and things have drastically changed over that time frame. “The people in the business today are so much more sophisticated and knowledgeable, and what they’re trying to do is much better founded. However, the issues still are who you are going to sell pellets to, and how the plants will get financed. As more pel-
Keystone Terminal • Channel depth of 42 feet. • Draft of 40 feet. • 1 berth, 1,100 linear feet of wharf frontage. • Panamax ship capable. • Installation of unit train rail loop and dump underway.
Q3 2013 | PELLET MILL MAGAZINE 23
« Ports
Port of Wilmington • Navigational channel depth of 42 feet. • Nine berths, 6,768 wharf frontage. • 150 nearby acres for development. • Within 700 miles of 70 percent of U.S. industrial base. • Rail service by CSX Transportation.
let plants come on line, we’ll continue the build-out of our facility.” Port of Virginia, Portsmouth Marine Terminal A soon-to-be-revived cargo port at the Virginia Port Authority’s Portsmouth Marine Terminal will host a wood pellet storage facility, a project that the VPA has contracted with ecoFuels Pellet Storage LLC, a joint venture between Capital Management International and multiFuels LP, to take on. The joint venture includes a 20-year lease on a 15-acre site where two pellet storage domes are to be constructed for a combined storage capacity of about 1.2 million tons. EcoFuels Pellet Storage opened a nonbinding Offering for Capacity July 15, and the company anticipates construction to begin later this year, with an in-service date during the last quarter of 2014. EcoFuels design will allow customers to deliver pellets via road or rail, and the terminal is conveniently located at the off-
ramp of major interstate highways. The terminal also accommodates rail service via CSX, NS and Norfolk & Portsmouth Belt Line railroads. "As the northern-most deepwater port in the mid-Atlantic region, PMT is an excellent location for pellet export to Europe,” says ecoFuels partner Peter O’Keefe. “We’re delighted with the interest manufacturers have shown in our offering.” Port of Wilmington, N.C. The North Carolina Council of State recently approved a lease agreement that gives the North Carolina State Ports Authority the go-ahead to enter the wood pellet industry. According to the agreement, Enviva LP may construct a wood pellet export facility at the Port of Wilmington, which could bring an estimated $2 million annual investment and at least $1.25 million in annual revenue. Per the agreement, Enviva will finance, construct and operate a facility that will consist of two storage domes, a railcar un-
Portsmouth Marine Terminal • Direct transfer capability from truck and rail receiving to ship. • 3 berths, 3,540 feet of wharf frontage. • Convenient rail access for both NS, via NPBL and CSX. • Channel depth of 43 feet. • Shipping system designed to load Panamax vessels. 24 PELLET MILL MAGAZINE | Q3 2013
Ports »
Port of Brunswick • Channel depth of 36 feet. • Three berths, 2,415 linear feet of wharf frontage. • Located 5 miles from Interstate 95. • Interchange and line-haul services are provided by CSX Transportation and Norfolk Southern Railroad.
loading station and a ship loader and conveyor system. The initial lease term is 21 years, with two additional five-year renewal options. It calls for the facility to be operational by January 2015. Elizabeth Woodworth, spokeswoman for Enviva, says that the company is evaluating a number of opportunities for growth throughout the southeastern U.S., including potential operations in the Wilmington region. However, plans with the port are still tentative. “Although [Enviva] has engaged in discussions with the Port of Wilmington, no final agreements have been signed at this time,” she says. Woodworth adds that Enviva’s Port of Chesapeake in Virginia is fully operational and facilitates the company’s mid-Atlantic wood pellet manufacturing facilities. The company’s two, state-of-the-art wood pellet storage domes there have a combined capacity of approximately 90,000 metric tons. Port of Brunswick, Ga. In August 2011, the Georgia Ports Authority and Logistec, a Montreal-based stevedoring and terminal operations company, announced a shared investment in the East River Terminal in order to expand its wood pellet export capabilities, which have contributed to the highest cargo levels the GPA has ever experienced. In April, 2.4
million tons of cargo passed through Georgia’s ports, a new record. Tonnage moving through the East River Terminal increased 14 percent over the same time frame in the previous year, reaching nearly 670,000 tons, led by biomass fuels. A critical component of the investments was a deepening of the shipping channel from 30 to 36 feet. Expounding on the ramifications of that improvement, David Proctor, Logistec terminal manager, says the GPA also dredged from 30 to 36 feet, which will increase the terminal’s capability of bringing in larger vessels for pellet exports. “With a 30-foot-depth, you can only get maybe 15,000 or 16,000 tons of any kind of cargo into the Port of Brunswick,” he says. “With the expansion and the deepening of the channel down to 36 feet, we are capable at this time of moving close to anywhere from 35,000 to 40,000 tons of wood pellets in a vessel. There are economies of scale with the larger-size vessels, and this additional draft allows us to attract a new target market when serving the largesize utility companies overseas.” Author: Anna Simet Managing Editor, Biomass Magazine asimet@bbiinternational.com 701-751-2756
Q3 2013 | PELLET MILL MAGAZINE 25
« Sustainability
Sustainable Harvests: Common forest management practices of thinning and sustainable rotational harvesting mean there is a continuous cycle of new growth in the forest, according to USIPA’s Seth Ginther. PHOTO: JOHN DEERE
26 PELLET MILL MAGAZINE | Q3 2013
Sustainability Âť
Reaching for Sustainability Pellet producers find customers want proof forest management best practices are being followed. BY CHRIS HANSON
Q3 2013 | PELLET MILL MAGAZINE 27
« Sustainability U.S. pellet producers, land owners and other forestry organizations are heeding the call of international customers and local citizens to demonstrate how the pellet industry is addressing sustainable land management concerns. “Biomass-fired renewable energy is endorsed by environmentalists, utilities and governments as a low-carbon alternative to fossil fuels,” says Seth Ginther, executive director of the U.S. Industrial Pellet Association. “Here in the U.S., biomass from forests in the Southeast has unified elected officials from both parties who see the economic and environmental value of working forests.” Georgia Gov. Nathan Deal is one of those officials. In a letter to the U.K.’s Department of Energy & Climate Change, which recently published a favorable report on proposals to enhance the sustainability criteria for biomass feedstocks, Deal credits the state’s regulations, sustainable forest management practices and existing infrastructure as being responsible for Georgia growing 30 percent more wood annually than what is being harvested. Although the surge in the demand for biomass feedstocks overseas is still relatively recent, sustainable practices have been in place much longer. “It’s important to note that best management practices have been established by the forest industry and these have been in place for decades,” Ginther says. “Common forest management practices of thinning and sustainable rotational harvesting mean there is a continuous cycle of new growth in the forest. Bioenergy, specifically wood pellets, uses the same standards as every other product coming from U.S. forests.”
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With the rising demand and a robust market, woody biomass production can become a way to sustain working forests. “Strong markets for forest products keep working forests working, providing essential environmental and economic benefits to society,” says Gretchen Schaefer, vice president of communications for the National Alliance of Forest Owners. “In addition to the standards the forestry industry has in place,” Ginther says, “pellet producers ensure that their product is sustainable and emissions are low during sourcing, production and transport. Every step from the forest to the furnace is environmentally friendly.” By demonstrating sustainable pellet production and forestry management, the woody biomass industry can only strengthen its cause and role in the energy marketplace. Ginther says although current laws, such as the Clean Water Act and Clean Air Act, are already ensuring sustainable methods are used, many USIPA producers are also certified by internationally recognized forest certification programs, such as the Forest Stewardship Council, Green Gold Label and the Sustainable Forestry Initiative.
Demonstrating Sustainability At the core of the SFI system are 14 principles, including: provisions for forest productivity and health, protection of water resources and biological diversity, managing aesthetics and recreation, protection of any ecologically or culturally special sites, compliance with applicable laws and regulations, public involvement in sustainable forestry, and more.
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Sustainability Âť
Forest Management Planning Expanding upon those principles are 20 objectives that use indicators or performance measures to show compliance. Under Forest Management Planning, for example, the indicators include documents showing a long-term resource analysis, periodic forest inventory, land classification and soils inventory, recommended sustainable harvest levels and a review of nontimber issues such as recreation or tourism. The planning objectives also call for documentation of annual harvest trends and a method to calculate growth and
yield, plus a system to recalculate planned harvests that can account for productivity changes due to factors such as long-term drought, fertilization, climate change, land ownership changes or improved data. Reforestation, best management practices, use of trained loggers, water quality monitoring, and more, are also detailed. In the 123-page document, the SFI also lays out a chain-of-custody system to track wood fiber through the stages of production, enabling the use of material from certified and uncertified forest and specifying how to calculate certified content percentages. The appen-
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« Standards dices offer additional resources, plus specifications on how to use the label and seal that come with SFI certification. “The SFI standard and the requirements apply regardless of the final product that is produced from that forest, whether it’s building materials, pellets or paper,” says Nadine Block, SFI vice president of government affairs. To certify sustainable forest products, SFI utilizes third-party audits to assess a land owner’s forest management practices or a company’s supply chain. The process be-
gins with submitting a participation application to SFI. If approved, SFI then contacts one of 10 certification entities to begin the audit. The forest owner must demonstrate that the SFI’s principles and objectives have been implemented into his operation. To determine SFI standard conformance, the auditor examines operating procedures and other forestry practice materials, monitors field performance onsite, interviews employees and contractors and contacts other interested parties such as government agencies, community groups and conservation
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organizations. If a minor nonconformity is discovered, a conformance certificate can be issued, but only after the lead auditor approves an action plan to address the issue within a set time not to exceed a year. More serious infractions result in the denial of the conformance certificate until approved corrective action has been implemented and a possible site revisit completed.
Maintaining Certification If a site is approved, the certified participant provides SFI with a summary report from the auditor to post on the company’s website for public review. The audit report includes a description of the audit process, a general description of the participant’s forest land and manufacturing operations, name of the certification body, dates the audit was conducted, summary of the findings and the certification decision. To maintain certification, SFI requires participants to complete annual surveillance audits in addition to recertification every three years. Although the process may sound intimidating to some producers, the benefits may have a strong impact on its business and customers. For instance, during the audit, a certifying auditor might be able to validate more than one standard, saving both time and money for the producer. One challenge in demonstrating sustainable wood procurement and production may lie with smaller, private forest owners. Steven Meyers, procurement manager for Fram Renewable Fuels LLC, says less than 20 percent of forest land in the Southeast is certified. Of that percentage, a notable portion is held by large forestry companies, he says, whereas small land owners may not have the market incentive or capital to become certified. “There really needs to be something done at the state level,” Meyers says. Some states have even addressed the issue by developing certification programs for small private land owners at low cost and providing the manpower to run the program, he says. By promoting sustainable forest practices through certification standards and working together, pellet producers may see themselves in a beneficial position to address growing demand and sustainability concerns
Standards » from their international and domestic customers. “Our standard is in a good position to help pellet manufacturers demonstrate their sustainability and demonstrate how they are meeting European sustainability requirements,” Block says. “What we’ve seen is a lot of pellet manufacturers are certified to the SFI standard and that is being driven primarily by demand from Europe.”
that focuses more on sustainable agriculture stability, and says there will be no unilateral than forest land use. Additionally, the UK- changes to the policy until 2027, although it TPP already recognizes certification strategies reserves the option to make changes as biothat meet its principles and builds upon exist- mass power generation improves after April ing U.K. guidelines to promote consistency, 2019 or to comply with EU or international while avoiding costs for both wood produc- regulations. ers and customers. The DECC states the Author: Chris Hanson policy’s criteria can be met by using certified Staff Writer, Pellet Mill Magazine wood from an approved forest that has been chanson@bbiinternational.com approved by the Forest Stewardship Council 701-738-4970 UK, EU Approval or the Program for the Endorsement of For“The United Kingdom and European est Certification methods, or the equivalent. Union recognize that bioenergy is a vital part DECC also responded to calls for policy of the energy mix that is helping them meet its climate change commitments and renewable energy targets,” Ginther says. Wood pellets are the only readily available renewable energy alternative capable of providing consistent energy to meet consumer demands. ENGINEERED SYSTEMS AND SERVICES It is a complementary technology intended to work alongside other energy sources like Translating Ideas into Sustainable Solutions wind and solar to balance the grid. “It is with this in mind that the regulatory bodies in the U.K. and EU approach the use of wood pellets. While we can’t predict what the future holds, European regulators have expressed to us they are comfortable with the U.S. regulations, laws and oversight that govern our forests—they are some of the most robust internationally. We expect the industry to continue to grow and thrive in the coming years.” Looking toward Europe’s expanding markets, the U.S. pellet industry got some RTOs Gas Scrubbers WESPs good news in August when the U.K. Department of Energy & Climate Change released its report addressing feedstock sustainability requirements for power producers to meet MEGTEC Systems is pleased to announce the acquisition of the country’s renewables obligation using TurboSonic Technologies, Inc. solid biomass and biogas fuel sources. The response was crafted using input from 73 respondents, including Sustainable Forestry MEGTEC has the complete system for your application. From VOC to Initiative Inc., the U.S. Industrial Pellet Asparticulate abatement, MEGTEC has the turnkey solution to fit your sociation and Drax Power Ltd. It indicates needs. the DECC still considers biomass an attractive fossil fuel replacement and addresses the Regenerative Thermal Oxidizers (RTOs) government’s desire to manage sustainabil Gas Scrubbers ity concerns in addition to curtailing green Wet Electrostatic Precipitators (WESPs) house gas emissions. The new DECC criteria, to be finalized Contact us! We’re your single source for environmental solutions. later this year, are based on the U.K. timber procurement policy (UK-TPP), considered by forest industry respondents to be a better concept to follow than the current system
MEGTEC Systems Inc. | MEGTEC TurboSonic Inc. | info@megtec.com | www.megtec.com Q3 2013 | PELLET MILL MAGAZINE 31
« Producer Profile
PELLET PRODUCTION IN PAUL BUNYAN LAND: Situated just south of Ladysmith, Wis., in the state’s heavily forested Rusk County, the Indeck pellet facility enjoys direct access to an active rail line.
Pellet Production in Wisconsin’s North Woods Indeck Ladysmith provides not only vital jobs, but a market for forest products and sawmill residuals in Wisconsin’s Rusk county. BY TIM PORTZ
A
bit more than an hour north of the college town of Eau Claire, Wis., sits Ladysmith, the county seat of Wisconsin’s Rusk county. Nearly 30 percent of the county’s workforce of about 8,000 people makes a living in the manufacturing sector and, with 80,000 acres of forest land in the county, the forest products industry plays a vital role in the area’s economy. In 2009, looking to maximize on the area’s significant wood fiber assets, Illinoisbased Indeck Energy Services Inc. broke
32 PELLET MILL MAGAZINE | Q3 2013
ground on a pellet facility sized to produce nearly 90,000 tons of wood pellets annually when running at maximum capacity. Initially eyeing the area for the development of a biomass power plant, Indeck Energy Services and minority equity partner and feedstock aggregator Midwest Forest Products Co. pivoted their plans and brought this facility online to begin producing pellets in July 2009. Utilizing about equal portions of the area’s abundant sawmill residuals and whole round logs, the facility operates largely on hard-
wood fiber streams. “Predominantly what we are using is mixed hardwoods. The majority is medium- to high-density hardwoods. That includes red oak, hard maple, soft maple, ash and birch,” notes Darren Winchester, quality control manager at the plant. Feedstocks drive the facility’s final product quality, Winchester continues. “One good way to look at quality is consistency and the consistency does start on the front end. For us, we maintain a product recipe that calls for a certain percentage of our various wood species.”
Producer Profile »
LOCALLY HARVESTED: Darren Winchester and Ron Jacobson, Indeck Ladysmith employees, stand in front of an assortment of hardwoods in the facility’s woodyard that includes red oak, maple, ash and birch.
RECEIVING RESIDUALS: About 50 percent of the feedstock the Indeck Ladysmith facilty receives and converts into pellets is sawmill residuals. Here, a load is emptied from a trailer with the plant’s truck dumper.
The facility’s wood yard is arranged into logical zones—evidence of its ability to accept and process both whole round logs and sawmill residuals. Whole round logs are received, debarked and fed into the facility’s 600 horsepower chipper. The chips are sorted by species by the yard’s radial stacker and the bark is sold to nearby boiler operators. While the Btu from the bark could be put to use on the premises to power the dryer, the air permit required to burn this higher moisture content material makes that option impractical. Instead, the plant utilizes about 10 percent of its dried furnish (wood fines) to run the dryer. Pellets are bagged and stacked on pallets for delivery to the plant’s significant roster of dealers. “There are more than several hundred outlets in the Midwest that carry our product, from various big boxes to a lot of independent and private dealers like wood yards and small mom and pop hardware stores. So there is a myriad of outlets for our product and we’re certainly always looking to increase that number,” reports
Q3 2013 | PELLET MILL MAGAZINE 33
ÂŤ Producer Profile
PILED NOW, MIXED LATER: The hardwood chips are distributed into radial piles, and later sorted by species and introduced into production in specific portions to ensure the finished pellets have the desired performance characteristics.
ROUTINE MAINTENANCE: Plant crews work on one of the facility’s three Andritz pellet mills. The facility typically expects to get more than 3,000 hours of use from their dies before they need maintenance.
34 PELLET MILL MAGAZINE | Q3 2013
Producer Profile »
Nunzio Maniaci, business development manager. The plant covets the growth opportunity afforded by landing critical bulk delivery customers. “Our bulk customers are some schools and municipal buildings that have pellet appliances that allow them to heat their facility by burning pellets. There aren’t too many of those and it is not growing fast enough, probably, to suit us,” Nunzio says. The plant is well-positioned to service bulk customers, being unique among Midwestern pellet facilities in boasting onsite rail access. Ideally, the facility would locate a utility deploying biomass cofiring to drive some major demand. The plant had some early traction in this effort and, Nunzio reports, “we had one test two years ago with a large utility here in Wisconsin that burned a large number of tons of pellets.” Those tests, however, never progressed beyond test fires and Nunzio is skeptical of nearterm domestic utility demand for wood pellets saying, “That market just doesn’t seem to be maturing right now.” Not surprisingly, the entire management and operations team at Indeck are closely watching the maturing market for wood pellets in Western Europe, led by the demand from power plants in the United Kingdom. Moreover, foreign pellet buyers are reaching out to Indeck. “We get requests daily from them for large amounts of pellets to go different places: Italy, Germany, Sweden, and the U.K., specifically,” Nunzio says. “But we haven’t been able to get over the price hurdle, yet. Demand keeps going up and we think that will drive the price up and eventually we are going to get there.” Until that day, the team at Indeck Ladysmith LLC will continue to produce high quality pellets for their domestic buyers. Author: Tim Portz Executive Editor, Pellet Mill Magazine 651-398-9154 tportz@bbiinternational.com
SOURCE: 2013 REN 21
ÂŤ Outlook
Wood Pellet Global Trade, 2012
Domestic, Global Outlook Speakers at PFI conference forecast continued market growth. BY SUSANNE RETKA SCHILL
T
he outlook for growth in the fuel pellet market is still positive, although it has been tempered some from earlier overly optimistic projections, attendees learned from several speakers at the Pellet Fuels Institute annual conference held July 29-30 in Asheville, N.C. The U.S. domestic pellet market has tracked the natural gas market relatively closely, Seth Walker, an associate economist with RISI Inc., told attendees. When natural gas prices were trending higher a few years ago, interest in pellets grew, with pellet stove sales peaking at 140,000 per year in 2008. When the natural gas market nosedived the following year, pellet stove sales dropped by more than half, where the market has held. Given that correlation, natural gas price forecasts indicate a positive outlook for the pellet industry as well, Walker said. Natural gas prices appear to have bottomed out and 36 PELLET MILL MAGAZINE | Q3 2013
are forecast to steadily rise. He estimated the U.S. currently has about 845,000 wood pellet stoves that create demand for about 2.33 million tons of product annually. He also projected that 50,000 to 60,000 stoves would be added annually in the next few years. The global market for pellet fuel in 2012 is estimated at 22.4 million metric tons, said Gordon Murray, executive director of the Wood Pellet Association of Canada. Europe is almost self-sufficient in pellet production at about 12 million tons with North American production coming in at half that of Europe and Russia, the next largest. In Europe, the United Kingdom is the No. 1 importer bringing in 855,000 metric tons from Canada last year and another 475,000 metric tons from the U.S. While Canadian pellets dominate the U.K. market, the U.S. is the biggest supplier to the
Netherlands and Belgium. Denmark and Sweden receive the most pellets from Russia. He predicted that there will be a new surge for industrial pellets when several power conversions come online in 2015 including Drax and Eggborough in the U.K., EON Langerlo in Belgium and Delta in the Netherlands. While the EU power market has gotten much attention, Murray pointed out that the heating market comprises 40 percent of the EU pellet market, with no subsidy required. “Pellets are 30 percent cheaper than heating oil,� he said. Currently, 90 percent of Canadian exports are being shipped from western ports and going through the Panama Canal, but an effort is underway to organize the smaller pellet producers in eastern Canada to pool resources and product to develop export facilities in the East. Arnold Dale with Sweden-based Ekman & Co., said such cooperative efforts
Outlook »
SOURCE: WOOD PELLET ASSOC. OF CANADA/FOREST ENERGY MONITOR
Imports by Selected Countries 2012
among smaller producers is also one way for them to handle the sustainability and ENplus standards requirement to move product into the EU. He explained that Ekman, with its main business in pulp trading, started working in the bioenergy space in 2008, supplying both industrial and retail markets. The sustainability requirements for the industrial markets has some questioning
whether to focus more on the consumer side, he explained. “The consumer market in the EU has grown into a very stable market, it is no longer seasonal. People prefer to buy pellets in the summer months.” The annual increase each year in the EU has hovered around 700,000 tons of pellets for the past few years, Dale said, but is projected to exceed 1 million tons in 2013,
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based on the sales of boilers and stoves. Italy is showing the most rapid growth currently, having added more than 1 million pellet stoves in recent years. Consumption is expected to exceed production in both Austria and Germany this year, which will add to import demand. Amanda Lang, senior consultant with Forisk Consulting LLC, closed out the twoday conference with an analysis of projected demand from announced bioenergy projects in the U.S. No advanced biofuels were included as yet, she said, because none had met the company’s criteria for viability, as did only half of the proposed pellet facilities. The criteria included such factors as the use of known technology and project financing, among others. When potential demand is totaled, she said, “the forest products industry will continue to be the vast majority of the forestry market and bioenergy will comprise about 9 percent.” Author: Susanne Retka Schill Managing Editor, Pellet Mill Magazine sretkaschill@bbiinternational.com 701-738-4922
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/BiomassMag Q3 2013 | PELLET MILL MAGAZINE 37
« Harvesting
PHOTO: FOREST GUILD
CONTRIBUTION
New Markets Call for New Management Practices Forest Guild offers voluntary guidelines for forest harvesting and biomass retention. BY MICHAEL DEBONIS
F
or several centuries, America’s forests served as one of the single largest sources of energy for this growing nation. Wood heated homes and fired the boilers of America’s industrial revolution. With the discovery of fossil fuels, however, and more efficient ways to extract and transport them to population centers, the use of wood as a source of energy rapidly declined. This new source of energy, fossil fuels, took pressure off America’s forests, allowing them to grow back to the forests we see today. America’s forests are once again being seen as an energy source as both the U.S. 38 PELLET MILL MAGAZINE | Q3 2013
and Europe begin working to reduce the use of fossil fuels. The difference between today’s use of wood as an energy source and the past is that new technologies allow for much more efficient means of extracting valuable Btu from every ton of wood harvested. From heating single homes, to firing boilers in hospitals, to 20,000-ton cargo ships bound for European electric generating facilities, the use of wood for energy is resurging. In just five years, the U.S. has seen wood pellet and other woody biomass production climb from 1.8 million tons in 2008 to nearly 6 million tons in 2012. Dramatic growth of pellet and woody
biomass facilities in the U.S. Southeast will bring even greater increases as more facilities come on line by 2015. The U.S. Forest Service forecasts forest bioenergy harvesting can increase anywhere from 54 to 113 percent by 2050. This emerging industry could not have come at a better time. With reductions in production demands and capacities in the pulp and paper and sawmill industries brought on by the still-lingering global recession, the new surge in pellet production has been a shot in the arm to rural forestbased economies and forest owners.
Harvesting » New Markets, Challenges With the recent improvements in catalytic converter technologies, both New England and the Pacific Northwest are seeing increases in residential wood stove heating. Simultaneously, those regions are witnessing an increase in heating conversions at large municipal facilities such as hospitals and prisons as they add pellets and chips to their energy menu. The Southeast has found new markets filling European demand for wood pellets as an alternative to fossil fuels in electricity generation. U.K. electricity generating facilities are substituting pellets for coal in order to meet the U.K. Renewable Energy Directive, which calls for substituting 20 percent of current fossil fuel use with renewable sources by 2020. The European Union 2020 RED demands much the same from other member countries. While forest-based economies can benefit from new demand for wood, this presents a new set of challenges. In many cases, biomass harvesting techniques vary little from other traditional harvesting techniques. Nevertheless, these quickly emerging markets have the capability of causing ecological degradation, if not handled properly. The woody biomass industry is new
in the U.S. compared to traditional forestry industries such sawmilling, pulp and paper, and even oriented-strand board. For the past several decades, these industries have operated their forest harvesting practices in accordance with best management practices (BMPs) designed by state forestry agencies to help maintain the quality of our lakes, streams and waterways. The woody biomass industry, however, postdates these BMPs. It may be some time before state forestry agencies will be able to address biomass harvesting and amend their BMPs, if they so choose, thereby leaving potential gaps in existing BMPs.
Forest Biomass Guide Recognizing this gap, the Forest Guild, a U.S. nonprofit organization of nearly 1,000 foresters, has published a set of voluntary biomass harvesting guidelines (BHGs) for several regions of the country: New England, the Pacific Northwest and the Southeast. Titled “Forest Biomass Retention and Harvesting Guidelines,” the goal is to identify how expanding markets for forest bioenergy can enhance forests while at the same time meeting the economic and social needs of today’s population. The guidelines were developed to assist several audiences—foresters, landowners,
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Goals for Southeast Forests Forest Type
Snags (Standing dead or dying trees)
Downed Woody Material
Southern Appalachian Hardwoods
At least 17 snags per acre greater than 4" diameter at breast height (DBH)
At least 3 tons per acre
Upland Hardwoods and Mixed PineHardwoods
At least 11 snags per acre greater than 4" DBH
At least 3 tons per acre
Bottomland Hardwoods
At least 6 snags per acre greater than 10" DBH
At least 3 tons per acre
Piedmont and Coastal Plain Pinelands
At least 5 snags per acre greater than 4" DBH
At least 1 ton per acre
SOURCE: FOREST GUILD
Q3 2013 | PELLET MILL MAGAZINE 39
« Harvesting Goals for Northeast Forests Structure
Minimum Target (per acre) Number
Basal area (ft2)
Live decaying trees 12-18" DBH
4
4
Live decaying trees >18" DBH
1
Considerations
Where suitable trees for retention in these size classes are not present or may not reach these targets due to species or site conditions, leave the largest trees possible that will contribute toward these targets.
in all places, but rather as guideposts for foresters, companies, harvesters and landowners concerned with sustaining their communities’ forests.
Ecological Value
Commercially, woody biomass has had little economic value in the U.S. This is changing. With the world’s concern regarding fossil fuel carbon in our atmosphere, technologies are changing, making wood a Worker safety is top priority. Snags>10" DBH 5 5 Retain as many standing snags preferred source of energy. as possible, but if individual Ecologically speaking, downed snags must be felled for safety woody material plays a critical role reasons, leave them in the forest. in the forest. For instance, downed SOURCE: FOREST GUILD and dead wood can play an essential role in wildlife habitat, acting as the home for nearly 55 mammal species, harvesters and biomass facilities—demonstrate to their communities their commitment to the importance of forest sustainability. While 20 bird species and numerous reptilian and amphibian species just developing the guidelines, the guild recognized that harvest technolo- in the Southeast. It also serves as seedbeds for tree and other plant gies and biomass markets will change over time. With that in mind, species, and slash has been found to be beneficial to seedling regenthe guidelines take a precautionary tack in order to avoid future issues eration after harvest. Downed and dead woody material is just as valuable with rethat may arise around woody biomass removal. Also, the guild does not present guidelines as static targets to be maintained at all times gard to soil productivity and water quality. It helps prevent soil ero1
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40 PELLET MILL MAGAZINE | Q3 2013
Harvesting » sion by impairing and reducing surface water flow and substantially improves water-holding capacity. Additionally, downed and dead wood represents a large pool of nutrients, functioning as a significant contributor to soil organic matter. A significant attribute of the guild’s voluntary retention and harvest guidelines is taking the guesswork out of how much woody biomass to retain. Synthesizing a large body of existing science and research, the voluntary guidelines provide foresters, landowners and harvesters tools to retain the right amount of standing dead trees and woody material on the forest floor. The guidelines include quantitative guidance charts for region forest types for snag (standing dead or dying trees) retention and downed woody biomass in tons per acre. This helps take a lot of the guesswork out of adequate retention rates. The accompanying tables show retention goals for both snags and downed woody material by forest type in the Southeast and Northeast. The Forest Guild’s “Biomass Retention and Harvesting Guidelines” offer several benefits to foresters, landowners, harvesters and pellet manufacturing facilities. First, because the current wood-to-energy, biomass harvesting taking place today postdates state BMPs and forest certification criteria, these guidelines can bridge that gap until state forestry agencies and certification systems decide to address this harvest activity. Second, the guild’s voluntary BHGs take the guesswork out of how much post-harvest woody debris retention is enough.
The guidelines’ charts provide scientifically On The Web: To learn more about based volumes to aim for. the Forest Guild’s Third, woody biomass harvesting, es- Biomass Retention pecially post-harvest retention, is coming and Harvesting under the scrutiny of national, regional and Guidelines, visit www.forestguild.org/ local stakeholders and raising the public’s biomass.html. concern over long-term soil fertility and productivity. If adopted and properly implemented, these guidelines can go a long way toward addressing these concerns. Fourth, the guidelines dovetail with existing third-party forest certification systems. Most certification systems require adequate retention of snags and dead wood, but do not provide specific bench marks. The guild guidelines fill this gap. Finally, the Forest Guild’s “Biomass Retention and Harvesting Guidelines,” carries the benefit of being developed by third-party experts using best available science. This can carry a great deal of weight and credibility with the public, conservation groups and legislators. Author: Michael DeBonis President and Executive Director, Forest Guild mike@forestguild.org 505-983-8992
Q3 2013 | PELLET MILL MAGAZINE 41
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