For the biomass pellet industry, 2023 is set to be an auspicious year. Not just on account of Russia’s relentless invasion of Ukraine or the EU Parliament’s non-sensical primary woody biomass (PWB) whim but it marks 25 years since the emergence of the global wood pellet industry as we know it today. The growing list of dedicated pellet events around the world slated to take place during 2023, is a testament to this.
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For anyone who may still be under the impression that biomass densification is some sort of new unproven technology, rest assured. Mechanical densiﬁcation technologies for biomass have been around for the best part of a century.
Indeed, forty years have passed since the Fuel Pellet seminar was held, in 1982 in Sweden, perhaps the first international event ever dedicated to biomass pellets for energy use. It is also two decades since the First World Conference on Pellets (Pellets 2002) was held, also in Sweden.
Long-runner annual international pellet events include Nordic Pellets in Sweden, the European Pellet Conference in Austria, Argus Biomass in the UK, CMT’s Biomass Trade & Power in Japan, WPAC’s and USIPA’s pellet conferences in Canada and the United States respectively.
On the technology side, apart from international animal feed events like VICTAM, there is a wide palette with some major global wood industry shows coming up in 2023 like LIGNA in Germany.
A well-proven technology
In the 1930s the American company Potlatch Mill developed its “Press-to-log” to densify sawmill residues. Briquetting has been deployed at an industrial scale for decades in the peat industry in Belarus, Estonia, Finland, Ireland, and Sweden, though it has all but disappeared since on account of peat’s classification as a fossil-like fuel.
In countries like Brazil and India briquetting has been used by the charcoal industry while the list of biomass materials that can or are being briquetted grows longer by the week – just ask any of the briquette press technology providers.
Pelletizing technology, on the other hand, has in fact been around a tad longer, in the animal feed sector. By extended definition, animal feed pellets are a form of densified biomass, the biomass “fuel” is intended for the stomachs of feathered and leathered livestock or fish rather than a boiler.
Likewise, there is a multitude of factors to take into account – feed recipes, nutrient additives, and hygiene to mention a few.
Indeed, two of the biggest names in their respective technologies – Amandus Kahl (flat die) and CPM – California Pellet Mill (ring die) – began providing pelleting solutions to the animal feed sector already in 1925 and 1931 respectively.
Arguably most if not all the major biomass pellet solution providers on the market today can trace their technology heritage or business starting point back to the animal feed sector, a heritage that in many cases is already a good five or six decades old.
The emergence of the first industrial-scale plants started with one spectacular fiasco…
Projects and plants for the production of biomass pellets for energy purposes began to appear in forest industry operations in Europe and North America during the late 1970s.
Sparked by the oil crisis in 1973 and 1979, the move to industrialize wood pellet production seems to have begun in earnest in the early 1980s. Many sawmills, pulp- and paper mills used coal or oil as fuel, yet generated large on-site volumes of residuals such as bark, sawdust, shavings, oﬀ-cuts and reject wood.
According to documentation from the 1982 Fuel Pellet seminar, there were reportedly 18 fuel pellet plants operational or under construction in the United States.
In Sweden, 70 projects had been identiﬁed but only a few were in operation at the time. These were found primarily in the pulp and paper industry using technology transferred from the peat, charcoal, and animal feed industries to produce fuel from residues.
In 1981 a major groundbreaking ceremony was held in Mora for what was then touted as Europe’s largest dedicated wood pellet plant. Designed to use forest and sawmill residues and distribute the pellets using tanker trucks, the 40 000 tonnes-per-annum (tpa) Mora Pellets plant began operating in 1982.
Stricken by technical, operational, and an overdose of political prestige, it closed in 1985 as a financial fiasco not least for the municipality of Mora that had pumped in borrowed capital. The equipment was sold years later to another pellet plant.
Reportedly, one key mistake was the business plan itself – the pellets were apparently set at a fixed price before the plant was built. However, the actual production cost turned out to be significantly higher than envisaged once the plant began producing, exacerbated by the poor quality of the product coming out and the borrowed SEK millions spent trying to remedy the problems.
…and one resounding success
The failure of Mora Pellets is by no means unique or isolated, there are a number of contemporary examples. In its defense, it was a first-of-its-kind project but as anyone in the business can testify, pelletizing wood is far from easy or straightforward, despite having well-proven pelletizing technology at hand.
Over the years, several technology providers that tried pelleting wood have since reverted back to animal feed or gone out of business – a Darwinian evolution with the survival of the fittest, for purpose, one might add.
In parallel in 1982, a company that got it right from the start was Svensk BrikettEnergi AB (SBE). Founded by Jarl Mared, it was the first company (in Sweden) to begin industrial-scale production of solid woody biomass fuels such as briquettes, pellets, and wood powder.
By the time Jarl Mared retired as CEO in 2005, succeeded by the then CEO of SCA Bionorr Kent Johansson, the company had grown to nine production facilities including one in Latvia.
Now wholly owned by Lantmännen Group, the company is the largest pellet producer in the Nordics – some 550 000 tpa in total from six plants including one in Latvia.
There are of course examples of pellet production in the 1980s and 1990s from other countries than Canada, the United States, and Sweden. For instance, in Japan where the first pellet plants also appeared in 1982.
Milestone coal to pellet conversion and shipment
In light of the development of the industrial use of pellets and coal-ﬁred plant conversions, 1991 marks the first deﬁning milestone, at least in the Nordics.
That is when Stockholm Energi (now Stockholm Exergi) began looking at converting its coal-fired Hässelbyverket combined heat and power (CHP) plant which is located on the northern shores of Lake Mälaren in northwest Stockholm.
The company went in as a majority shareholder in the start-up of Bionorr, a 40 000 tpa wood pellet plant in Härnosand on the Baltic Sea coast in northeastern Sweden.
Commissioned in 1992, the ﬁrst pellets were transported by a coaster vessel in 1993 to Hässelbyverket.
By 1997, three of the plant’s four 100 MW units were converted while the fourth oil-fired power-only unit has remained under “long-term conservation” since 1999.
Still operational, Stockholm Exergi and the City of Stockholm have advanced plans to close Hässelbyverket once the planned Lövsta waste-fired CHP plant comes into operation. The attractive lakeside site is to be redeveloped for residential purposes.
Bionorr too is still operational and owned by SCA Energy AB, a subsidiary of forest industry major SCA and one of the original investors. The pellet plant has since undergone capacity expansions and environmental improvements to its current 180 000 tpa capacity, a large industrial-scale pellet plant by European standards.
The significance of the Hässelbyverket and Bionorr venture is that it pioneered industrial-scale pellet production, logistics (shipping, handling- and storage), and usage with power plant cofiring- and conversion proving the technical and economic feasibility in the Nordics.
It is worth bearing in mind that Sweden imports all the fossil fuels it consumes, and 1991 saw a fiscal overhaul of the energy tax system with the introduction of three polluter-pays principle (PPP) components – carbon dioxide tax (CO2), sulphur tax (SOx), and nitrous oxide (NOx) levy.
Landmark transatlantic pellet shipment
Shipping pellets from Bionorr in Härnosand to Hässelbyverket in Stockholm by coaster demonstrated that one could use dry bulk vessels to transport volumes.
While it was a milestone achievement in itself, opening up the possibility of pellet import from the Baltic Sea region, 1998 marks the second deﬁning landmark, when the ﬁrst ever transatlantic shipment of wood pellets took place, from Canada to Sweden.
A larger volume over a longer distance and longer time span.
The “how, who, and why” backstory with FutureMetric’s John Swaan, the Canadian counterparty who at the time was with Pacific BioEnergy (a pellet company he co-founded in 1994) is worthy of an article of its own.
The very short version is on February 19, 1998, the “Mandarin Moon” loaded with 15 000 tonnes of pellets sailed out of Prince Rupert, British Columbia (BC), and arrived at Öresundkraft’s CHP plant in Helsingborg, Sweden on April 6, 1998.
In other words, that landmark shipment took place just 25 years ago.
Growth of a global industry
Arguably, these two landmark events along with favorable framework policies and incentives, and the ISO standardization of pellet quality that ensued laid the foundation for the growth and globalization of the industrial wood pellet industry.
The first decade of this Millenium saw accelerated wood pellet production and consumption. An industry that has grown in parallel with local and regional pellet producers serving local and regional markets, often seasonal residential heating markets.
By 1998, Bionorr had a doubled capacity to 80 000 tpa. Already a decade later, in 2008 when Green Circle BioEnergy in Florida opened, it was with its nameplate 560 000 tpa the world’s largest pellet plant passing the 1/2 million tpa mark.
Green Circle is now part of Enviva (Enviva Cottondale) which acquired the plant from JCE Group in 2015 and, despite its current 750 000 tpa capacity, has relinquished its “world’s largest” title to other Enviva plants.
2008 also saw global forest industry major Stora Enso invest in its first five pellet plants – in Sweden, Russia, and the Czech Republic –all integrated with existing sawmill operations.
This feedstock and/or energy integration is a concept that seems to have become the norm for European plants as well as in the US northeast and Canada.
In 2009, Drax Power in the UK began co-firing tests. The same year global market intelligence and commodity price assessment provider Argus Media launched its industrial wood pellet index.
In 2011, two decades after Stockholm Energi looked into the feasibility of co-firing pellets in Hässelbyverket, the Industrial Wood Pellet Buyers initiative (IWPB), a precursor to Sustainable Biomass Program (SBP), began looking into incorporating standardized sustainability criteria.
Fast forward to today, and the result is nothing short of remarkable.
Industrial-scale pellet production in the United States now means annual plant capacities in the 400 000+ tpa range – tenfold that of the ill-fated Mora Pellets – while “Enviva” scale is 800 000+ tpa.
Russia’s Vyborgskaya facility never got off the ground in terms of nameplate production while Enviva was the first to reach 800 000 tpa nameplate production thereof the arbitrary designation.
A glocal industry
Shipments from North America today go transatlantic to Europe and transpacific to South East Asia in Panamax-sized vessels taking 60 000 tonnes or more per shipment.
Öresundetskraft still uses some imported pellets although shipments tend to come from across the Baltic Sea rather than across the Atlantic Ocean while Pacific BioEnergy (PacBio), threw in the towel early last year.
According to our World of Pellets 2022 figures, there were 1 179 biomass pellet plants with an installed production capacity of 10 000 tpa or more and operational in 2021. Located across 62 countries they had a combined annual installed capacity to produce almost 66.6 million tonnes.
Notable too is that of this installed capacity volume, 21.4 million tonnes are in facilities that are ENplus certified that cater to the residential and commercial sectors.
In total, 465 ENplus-certified plants excluding those located in Belarus and Russia as these had certification suspended in April 2022.
For clarity, it should be stated that installed or nameplate capacity is not the same as actual production. Furthermore, there are hundreds if not thousands of pellet plants that have nameplate capacities of less than 10 000 tpa – typically found at small- and medium-sized businesses such as joineries, cabinet makers, and small sawmills that use process residuals for their own waste management and heat purposes or supply a local market.
Compared to the 2004 edition, the first to include figures from outside of Sweden and listed 195 plants including plants with up to 10 000 tpa capacity. In total plants were found in 25 European countries with an estimated installed capacity of approximately 4.8 million tonnes.
The US and Canada combined had an estimated 1.5 million tonnes of annual production capacity, though the number of plants was not given while Japan had 18 plants operational in 2004 that perhaps had 20 000 tpa combined.
Including smaller plants that were not listed but were operational at the time, there were perhaps 250-300 operational pellet plants in 2004 located in 28 countries with a combined installed capacity of approximately 6.3 million tpa with a few plants over 100 000 tpa.
The emergence of industrial “prousers”
In just over a decade, powerhouses like the UK’s Drax Group have morphed to become the single largest consumer of wood pellets. Not only has it converted all four 600 MWe units from coal to wood pellets, but it has also developed port unloading, handling, and rail logistics including bespoke railcars and storage facilities to serve the power station in North Yorkshire.
Drax has also become the second-largest producer of wood pellets not least via its acquisition of Canada’s Pinnacle Renewable Energy which added significant capacity to its existing portfolio in the United States.
Estonia-headed Graanul Invest, Europe’s largest pellet producer, comes in at a good third after picking up a US asset of the defunct German Pellets, and it is the first to acquire a vessel of its own.
While it has biomass-fired CHP plants at its production facilities, Graanul too had ambitions to convert a coal-fired power plant, the Langerlo plant in Belgium, to pellets.
Improving health and safety
For the record, it should also be acknowledged that there have been technology gains, operational improvements, increased energy efficiency, and lower environmental footprint along the way as well as industry standards and administrative harmonization works to facilitate trade.
Most importantly some hard lessons have been learned along the value chain when it comes to operational health and safety, especially fire and dust.
In this respect, the Wood Pellet Association of Canada (WPAC) and RISE Research Institutes of Sweden are to be commended for taking industry-wide leads on developing best practices for the entire value chain, including households.
2023 sees the shift to Pellets 3.0?
From humble beginnings in the early 1980s, wood pellets and the wood pellet industry has over the last four decades seen at least two remarkable and parallel growth periods – Pellets 1.0 and Pellets 2.0 – to become a global solid biomass fuel commodity with local, regional, and international reach and scale – residential, commercial, and utility.
2023 seems set to usher the industry into a new period of growth and end-use expansion – Pellets 3.0.
What the industry will look like by 2050 is anyone’s guess but a few things seem reasonable to be expecting over the coming years:
- Wood fibre baskets in other geographies in Africa, Asia, and South America have yet to blossom, and it would seem likely to expect a number of “Enviva” scale plants though not necessarily Enviva that thus far has stayed within the US southeast and Gulf coast fibre baskets;
- Biomass pellets i.e. not just wood will continue to find a place in other industrial end uses either as fuel or as feedstock in the hard-to-abate carbon-intensive sectors such as cement, chemicals, and advanced biofuels;
- Biomass pellets will take a sizeable share of the clean cooking market in emerging economies. Here the economies of scale would seem to work in the opposite direction with decentralized village-scale production and consumption;
- Densification as technology will find increasingly more industrial applications in other sectors with organic and inorganic residual flows such as biogas, wastewater treatment, and waste management/recycling in which the end use (of the densified material) may or may not be energy.
Packed 2023 pellet conference schedule
These and other topics such as the residential- and commercial space heating markets aka the ENplus markets – another remarkable part of the global wood pellet story – will no doubt be up for discussion at the numerous dedicated pellet conferences already slated for 2023.
- First up later this month is the newly launched European Pellet Forum (EPF) which will have its inaugural conference in Graz, Austria in conjunction with the Central European Biomass Conference. Initiated by the European Pellet Council (EPC), this premier edition is being organized by proPellets, the Austrian Pellet Association, and the idea is that national pellet associations will take turns in organizing and hosting the event which is to be an annual affair.
- A fortnight later at the beginning of February is the annual Nordic Pellets conference that this year will be held in Gothenburg, Sweden. With a study tour option, one should add looking at municipal and industrial heat applications of switching from fossil fuel to pellets.
- The following week it is just across the Öresund strait to Copenhagen, Denmark for CMT’s Biomass Trade & Power Europe where some of the industrial pellet producers, traders, and utility end-users will hold court.
- At the beginning of March, it is back to Austria and Wels for the annual European Pellet Conference as part of World Sustainable Energy Days (WSED). As ever, a packed program with topical speakers and an insight into up-and-coming R&D.
- Then in mid-April its London, UK for the annual Argus Biomass conference which is the European biggie for industrial-scale production, utility consumption, and shipload trading of pellets.
- Moving out of Europe to Japan, in mid-May sees CMT’s Biomass Pellets Trade & Power in Tokyo that apart from industrial pellets also covers regional biomass sources such as palm kernel shells (PKS), and also so-called “black pellets” for which Japan is the go to market.
- Continuing east to the United States, to Austin, Texas for Pellet Fuel Institute’s (PFI) annual conference in early June, the place to be if residential- and commercial space heating in North America and/or barbecue pellets are your thing.
- Moving on to the latter half of 2023 is WPAC AGM & Conference which is to be held in the Canadian capital Ottawa, in late September.
- Following on down south, although not announced yet, the US Industrial Pellets Association (USIPA) Annual Exporting Pellets conference, which usually is held in Miami Beach, Florida in early October.
Acknowledging the pioneers
Finally, as previously mentioned, John Swaan is the person to ask about the landmark Mandarin Moon backstory and is a frequent participant at pellet conferences. No doubt he will be in attendance at several of the above events – including the Nordic Pellets conference in Gothenburg where he is slated to speak during the sourcing, storage, and trade session.
Bear in mind that there probably wouldn’t be much of an international pellet trade conference to go to let alone a global pellet industry like there is today had it not been for the successful outcome of that pioneering transatlantic shipment from Canada to Sweden.
Nor would there have been much reason to ship anything anywhere if the Hässelbyverket conversion and Bionorr venture had failed. It is really down to quite a small number of pioneering people and bold companies that laid the foundations in 1991 and 1998 for the global pellet industry enabling others that have since built it into Pellets 2.0 as we know it today.
As most of those who were involved in these landmark events back then are most likely retired from their professional lives or retired from life itself, it is only fitting that their legacy is acknowledged and their contribution formally recognized by industry peers, ideally at one of the above-mentioned events.