IN THE NEWS

Enviva Purchases Georgia Biomass

Enviva Partners is purchasing a wood pellet production plant (known as Georgia Biomass) in Waycross, Ga. with associated export terminal capacity in Savannah, Ga. from innogy SE. The purchase price is $175 million (US). In operation since 2011, the Georgia Biomass plant exceeded 800,000 metric tons in annual production last year.

The closing of the transaction is subject to antitrust clearance— both in the UK and in the U.S. The closing is planned for the third quarter of 2020.

Christoph Radke, COO Renewables at innogy SE, comments, “We are selling our U.S. pellet production facility as a result of a strategic realignment process that was decided already some years ago. This strategic realignment led to the decision that biomass was no longer considered a core business activity. As part of this process, we have already sold three biomass-fired power stations and a pellet production facility in Germany in addition to a biomass asset in Italy. The pellet plant in Waycross is the last biomass asset in our portfolio. We are convinced that Georgia Biomass would be better placed in a company which has pellet production as one of its key strategic pillars.”

Fabian Gaus, Managing Director of Georgia Biomass LLC, adds: “I’d like to take the opportunity to express my sincere thanks to our employees. Georgia Biomass exceeded 800,000 metric tons in annual production in 2019 and ended the previous year with setting benchmarks not only in production, but also in quality, sales and profitability. In doing so we have created a perfect basis for the future of the company under the umbrella of Enviva.”

As part of the Georgia Biomass acquisition, Enviva will acquire long-term, take-or-pay off-take contracts with an existing partnership customer for annual deliveries of approximately 500,000 MTPY through 2024. The Waycross plant exports its wood pellets through a terminal at the Port of Savannah under a long-term terminal lease and associated services agreement.

Enviva Partners also has agreed to purchase Enviva Pellets Greenwood Holdings II, LLC, which, through its wholly owned subsidiaries, owns a wood pellet production plant in Greenwood, SC from its sponsor for cash consideration of $132 million and the assumption of a $40 million third-party promissory note.

The Greenwood plant has been operating since 2016 and its wood pellets are exported through the partnership’s terminal at the Port of Wilmington, NC. The partnership plans to invest $28 million to expand the Greenwood plant’s production capacity to 600,000 MTPY by the end of 2021. The partnership expects the Greenwood acquisition to close on or about July 1, 2020.

In connection with the Greenwood acquisition, Enviva Partners will be assigned five long-term, take-or-pay off-take contracts with Japanese counterparties that have maturities between 2031 and 2041, aggregate annual deliveries of 1.4 million metric tons per year.

“The Greenwood and Georgia Biomass acquisitions are fundamentally transformative for Enviva’s scale and diversification,” says John Keppler, Chairman and CEO of Enviva. “Not only are we increasing Enviva’s fully contracted production capacity by 35 percent, but we are doing so in new fiber baskets, with new deep-water terminal infrastructure, and with new customers under new long-term, take-or-pay off-take contracts that we expect will enable us to continue our track record of generating durable cash flows and growing our distributions sustainably well into the future.” Prior to the two acquisitions, Enviva Partners owned and operated seven plants with a combined production capacity of 3.5 million

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Georgia Biomass produced more than 800,000 metric tons in 2019.

metric tons of wood pellets per year in Virginia, North Carolina, Mississippi and Florida. In addition, Enviva exported wood pellets through its marine terminals at the Port of Chesapeake, Va. and the Port of Wilmington, and from third-party marine terminals in Mobile, Ala. and Panama City, Fla. The two acquisitions will add two operating plants with a combined production capacity of 1.4 million metric tons of wood pellets per year, and third-party marine terminal in Savannah.

4FRI: Election Antics With Phase 2 Pending

An election year shuffling of candidates for Arizona’s Corporation Commission (ACC) may bring new life to the near-derailed 4 Forests Restoration Initiative (4FRI) that’s seeking to restore healthy conditions across 2.4 million acres on four national forests.

Just last year the five-member ACC voted down a proposal to require state utilities to purchase up to 90MW of biomass-fired power, a critical market expansion for the biomass and brush material produced by each individual forest restoration project.

However, this past spring a state court judge threw multiple candidates off the ACC ballot due to irregularities in signature-gathering, including an incumbent.

The two members not facing election are split on the biomass proposal. Three seats are open, so if two candidates who support the mandate are elected, the biomass utilization effort stands a better

chance of moving forward. (Eligible candidates are on both sides of the issue, and some haven’t taken a position.)

Such election year antics may affect the 4FRI’s success: Increasing utilization of and expanded markets for biomass are critical to forest health in Arizona, and most involved with 4FRI agree that lack of biomass markets is severely hampering restoration progress.

Awarded in 2012, the first 4FRI contract (Phase 1) to treat 300,000 acres in 10 years has woefully underperformed, treating roughly 15,000 acres total compared to its goal of 30,000 acres a year, with lack of biomass markets a big reason for coming up short.

Meanwhile, national forest officials in Arizona are hoping to award 4FRI Phase 2 contracts in September following several contract modifications. Most notable, the contract time frame has been doubled, to 20 years, with several years of “ramp up” time to develop forest products infrastructure included.

The Phase 2 contract also more than doubled the acreage to treat to more than 800,000 acres. A five-year timber harvest plan included in Phase 2 solicitation materials identified 101 projects on 203,000 acres estimated to produce 1.097 billion BF in logs and 152 million cubic feet of biomass that must be removed or handled and reduced on site.

Results of this year’s ACC election will have a definite bearing on the development of biomass markets in the state.

Drax, Mitsubishi Team Up On Carbon Capture

Drax Group and Mitsubishi Heavy Industries Engineering, Ltd., part of Mitsubishi Heavy Industries Group (MHI), announce a new bioenergy with carbon capture and storage (BECCS) pilot project at Drax Power Station in the UK, which will get underway this autumn. The pilot will test MHI’s carbon capture technology—marking

This massive pipe would transport flue gas from the Drax boilers to the carbon capture and storage (CCS) plant for CO 2 removal of between 90-95%.

another step on Drax’s journey toward achieving its ambition to be a carbon negative company by 2030.

MHI’s 12-month pilot will capture around 300kg of CO 2 a day for the purpose of confirming its technology’s suitability for use with biomass flue gases at Drax.

Will Gardiner, Drax Group CEO, comments, “Our plans to develop BECCS at the power station in North Yorkshire will help to boost the UK’s economy following the COVID crisis and support the development of a zero carbon industrial cluster in the Humber region.

Two of MHI’s proprietary solvents will be tested, one of which—KS-1 Solvent—is already being used at 13 commercial plants delivered by MHI, including Petra Nova in Texas, USA, the world’s largest post combustion carbon capture facility, capturing 1.4 million tonnes of CO 2 a year. The other is the newly developed KS-21 Solvent, designed to achieve significant performance improvements and cost savings.

Kenji Terasawa, President & CEO, Mitsubishi Heavy Industries Engineering, adds, “We firmly believe that our carbon capture technology would be able to contribute to the UK’s zero carbon targets in a material way.”

Implementing BECCS at Drax

could deliver 16 million tonnes of negative emissions a year—a third of the negative emissions the UK needs from BECCS to reach its zero carbon targets by 2050 and anchor a zero carbon industrial cluster in the Humber region, delivering clean growth while protecting 55,000 jobs.

MHI, together with Kansai Electric Power Co., Inc. (KEPCO), started the development of the Kansai Mitsubishi Carbon Dioxide Recovery (KM CDR) Process, a post-combustion carbon capture technology, in 1990.

Alaska Coal Firm Acquires Pellet Mill

Officials with Alaska-based Usibelli Mines, Inc. announced the company has acquired Superior Pellet Fuels of Fairbanks, which produces wood pellets and briquettes for local markets. New Usibelli subsidiary Aurora Energy Solutions is also installing a new generation wood kiln that will utilize waste heat from a nearby Aurora coal-fired power plant.

The project is part of an overall effort to improve air quality in Fairbanks, where firewood is a primary mode of heating but the market is mostly green wood, leading to higher emissions. Fairbanks has been out of compliance for years with U.S. Environmental Protection Agency air quality standards because of local temperature inversions during cold winter weather that concentrate pollutants at low levels in the community, creating health hazards.

The kiln, supplied by SII Dry Kilns, will produce dry firewood that burns much cleaner, up to 7,000 cords annually. Officials with Superior Pellet Fuels say the acquisition will also allow financing for long-needed expansion and a move to year-round production. The projects will provide regional residents with more local options for low-emissions wood fuel.

Seedling Program Continues To Grow

On June 13 Pacific BioEnergy Corp. (PacBio) achieved another milestone when planting crews with Strategic Natural Resource Consultants planted the half-millionth seedling as part of a PacBio planting program. The seedling was planted in a block near the Norman Lake West Forest Service Road, west of Prince George.

PacBio concluded its Spring Plant with the planting of 680,000 seedings. The Summer Plant is scheduled to begin on July 4 with another 450,000 seedlings to be planted.

PacBio CEO John Stirling planted PacBio’s first seedling on May 8 in the Bobtail Fire Biomass Recovery Area. “This year’s planting program is our first experience with replanting forests that were burned by an early season wildfire in 2015,” Stirling says. “We determined that we could salvage a lot of the burned wood and truck it to our plant in Prince George to make wood pellets. We’ve created economic opportunity and accelerated the reforestation in the fire damaged areas without piling and burning before replanting. I want to thank the planting crews for their work this spring and our Woodlands team for leading this project. We look forward to celebrating the planting of our One Millionth Seedling.”

In 2015, the Bobtail area west of Prince George was hit by a major wildfire which burned an area covering 25,533 hectares. The extent of the fire damage prevented salvage by the traditional forest industry.

In 2019, PacBio reached agreement with one of the major licensees in the area to salvage some of the burned fiber utilizing

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the licensee’s bioenergy license. PacBio proceeded to complete forest development planning and harvest unit layout while taking into account all the resource values that are present such as wildlife habitat, visual quality objectives, fisheries, and archeological resources.

FortisBC Will Provide Renewable Natural Gas

FortisBC is teaming up with REN Energy International Corp. (REN Energy) to offer Renewable Natural Gas (RNG) produced from wood waste to its customers. The innovative project features technology being used for the first time in North America and represents exciting new opportunities to reduce emissions using British Columbia (BC)’s expansive forestry sector, according to FortisBC. The production facility will be owned and operated by REN Energy and located near Fruitvale, BC.

Renewable Natural Gas is a carbon-neutral energy that is typically made from capturing the methane released from decomposing organic waste. This project will make use of waste from forestry operations, sawmills and other wood product manufacturers and, rather than collecting the methane from decomposition, would create syngas through gasification. The syngas is further converted to methane and then purified to meet natural gas line specifications. Once operational, the technology will create a use for forestry waste in BC and unlock the potential for significant new volumes of RNG in BC. This will also assist the forestry industry with cleaning up bush residuals, thereby assisting in provincial forest fire mitigation.

Advancing carbon-neutral energies such as RNG is a crucial element of FortisBC’s 30BY30 target—the organization’s goal to reduce customers’ greenhouse gas emissions by 30% by 2030. FortisBC is also working toward having 15% of its natural gas supply be renewable by 2030, which is in line with commitments outlined in the Province’s CleanBC promise.

The project received regulatory approval from the British Columbia Utilities Commission last month and is expected to be in service in the summer of 2021. It is anticipated to produce over one million gigajoules of RNG annually, which would make it the largest source of RNG in the province to date. RNG blends seamlessly with conventional natural gas in FortisBC’s existing infrastructure, which includes approximately 49,000 km of natural gas lines, safely delivering energy throughout the province.

Coal FIRST Initiative Could Include Biomass

The U.S. Dept. of Energy’s (DOE) Office of Fossil Energy (FE) has announced its intention to commit $81 million in federal funding for cost-shared research and development projects through the release of the draft funding opportunity announcement entitled Design Development and System Integration Design Studies for Coal FIRST Concepts. The draft Funding Opportunity Announcement has been issued so that interested parties are aware of DOE’s intention to issue the finalized FOA later this summer.

Projects resulting from the finalized FOA will support DOE’s Coal FIRST initiative. DOE’s Coal FIRST (Flexible, Innovative, Resilient, Small, Transformative) initiative wants to develop the coal plant of the future, capable of flexible operations to meet the emerging needs of the grid and transportation sector; use innovative and cutting-edge components that improve efficiency and reduce emissions; provide resilient energy to Americans; be small compared to today’s conventional utilityscale coal-fired plants; and transform how coal technologies are designed and manufactured. Some designs will also provide hydrogen to support transportation and in

dustrial applications.

The projects will complete (1) design development; (2) host site evaluation and environmental information volume; (3) an investment case analysis; and (4) a system integration design study for an engineering-scale prototype of one of the following Coal FIRST power plant concepts: 1) Flexible Ultra Supercritical (USC) Coal-Fired Power Plant 2) Pressurized Fluidized Bed Combustor with Supercritical Steam Cycle Power Plant 3) Hybrid Natural Gas Tur

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/ August 2020 bine/USC Coal Boiler Power Plant 4) Flexible Gasification of Coal & Biomass to Generate Electric Power and a Carbon-Free Hydrogen Co-Product

Projects will be managed by the National Energy Technology Laboratory.

Loggers Seek Aid From Congress

On behalf of its members throughout the country, American Loggers Council (ALC) is requesting $2.5 billion from Congress to directly support American loggers whose businesses have been negatively impacted by the coronavirus pandemic. ALC Executive Director Danny Dructor was working with a lobbying/PR firm in early June to introduce a “COVID 19 Economic Damage Relief Package for Logging and Trucking Companies in the Forest Products Industry” bill, or “Logger Relief Fund” for short.

Joining the ALC in this effort are associations representing several states, including California, Florida, Georgia, Idaho, Louisiana, Maine, Minnesota, Mississippi, Montana, New Hampshire, North Carolina, South Carolina, Oregon, Texas, Virginia, West Virginia, Wisconsin, Washington and Northeastern Loggers Assn.

Congress has already granted financial aid to assist farmers, fishermen and other producers of agricultural commodities through this crisis. America needs loggers, too, and as providers of another essential commodity, loggers also need America’s help.

As wood fiber consumption has been reduced due to the market impact of the COVID-19 pandemic, the nation’s small, familyowned logging and log trucking businesses have not escaped the fallout. Matthew Pellki, Professor at the College of Forestry, Agriculture and Natural Resources at the University of Arkansas at Monticello comments: “The Assn. of General Contractors (AGC) has re-

ported that 40% of the construction workforce in the United States has been laid off due to project delays and cancellations. No construction means orders for lumber fall, mills saw fewer logs, and less standing timber is bought and harvested.” Pellki predicts that even if the reopening of the economy is successful this summer, followed by a consistent relatively normal economy, it will still be two years before pine timber markets strengthen.

It would be a significant challenge for logging and log trucking businesses to survive such a long recovery, and the nation’s essential wood fiber supply chain could be severely disrupted. In order to sustain the supply chain, the proposed Logger Relief Package would provide a loan program for contractors through the U.S. Department of Agriculture to assist them in keeping business operational for the next 12 months while their markets attempt to recover.

Loan funds could be used for business operating expenses such as equipment loan payments, maintenance costs, fuel and oil expenses, insurance payments and other fixed and variable costs not already covered in existing federal payment programs.

To receive the loan, a contracting company would have to provide evidence of gross revenue and/or volume produced in 2019, through payment statements or a copy of 2019 business tax return forms that have been submitted to the Internal Revenue Service. A company could receive up to 10% of its gross revenue for operations in 2019 in the form of a loan. Over the next year, as long as the company can prove that revenues or volume delivered were down 10% or more from 2019, the funds will be treated as a grant and will be forgiven. If, however, the company revenues are down less than 10%, the funds will become a low interest loan not to exceed 5% and will need to be repaid.

In its announcement, the ALC states, “This is not a state or regional issue, but a national issue that needs to be addressed to sustain the essential service providers of the timber harvesting and hauling industry. Members of the American Loggers Council stand ready and able to assist members of Congress and the Department of Agriculture.” Log on to the ALC web site: amloggers.com/news/supportthe-logger-relief-package and fill out the form that will automatically generate an email to your representatives.

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