On October 18, 2022, Suzhou Honeycomb Biotechnology Co., Ltd (Honeycomb) made wood pellet history. With ENplus certification ID CN 001, it achieved ENplus A1 certification making it the first ENplus-certified pellet producer in China. Xinyi Shen met up with Enerver Ye, CEO of Honeycomb to learn more.
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ENplus certification was established in 2011. Originally designed by the Deutsches Pelletinstitut in Germany, it introduced quality classes and stronger technical requirements to those set by European and international standards.
Thanks in part to the active support from European partners, ENplus has quickly become a renowned certification in both Europe and beyond. Its success has largely contributed to a much-needed harmonization and standardization of the residential pellet market.
Today, ENplus is the world-leading certification scheme for wood pellet quality with over 1 200 certified companies.
Honeycomb is headquartered in Taicang County of Suzhou City in Jiangsu Province on the east coast of China. Taicang is a natural port. The city is located in the south of the Yangtze River estuary, bordered by Shanghai proper to the south.
The Taicang port is in the east of the city, and south of the Yangtze exit into the East China Sea. Under the Ming Dynasty, Taicang’s Liuhe Harbor was the departure point for Zheng He’s treasure fleets.
Fast-track to 2014, Taicang Port has emerged to become the largest seaborne timber import port in China. Here, roundwood imports from countries such as Canada, Germany, and New Zealand, are landed.
As a major wood processing base, Taicang Port has gathered more than 100 wood processing companies with a combined annual processing capacity of more than 10 million m3 of roundwood.
Current annual capacity 300 000 tonnes
Honeycomb’s current annual wood pellet-producing capacity is 300 000 tonnes. Surrounded by wood processing plants, Honeycomb has secured 40 000 – 50 000 tonnes per month of sawdust and shavings from the regional processing of imported softwoods – pine and spruce.
Suppliers are contracted from within a 100 km radius to ensure high-quality and stable-supply raw material for pellet production.
ENplus certification opens the European market
Beginning operations in 2013, Honeycomb’s original target market was Asia. After a number of years of supplying the domestic and other Asian markets, the company recognized the importance of standardizing its production and getting products certified.
Thus, they began to investigate ENplus certification, the most widely used pellet standard, in early 2022.
We applied for the ENplus certification all by ourselves without any service from an agency. The ENplus certification is beyond a product certification. It also standardizes the whole production, said Enerver Ye, CEO of Honeycomb.
Russia’s ongoing invasion of Ukraine, which began in February 2022, resulted in trade embargos and ENplus suspension on pellets from producers in Belarus and Russia.
As such the European market feared significant shortages of ENplus- certified pellets for the 2022/2023 heating season well evidenced by the flood of inquiries that arrived in Honeycomb’s email inbox.
Thanks to ENplus certification, Honeycomb’s pellets are currently exported to Italy, Slovenia, France, Germany, and other European countries at a “competitive price based on market demand and timely delivery.”
Focus on self-driven research and development
Honeycomb is keen to enhance its own research and development (R&D) capacity. They established an in-house lab to test their products and do quality control.
They bought the main equipment from a domestic supplier in Shandong province. There are 14 flat-die pelletizers in the plant, each one has a capacity of 2-2.5 tonnes per hour.
The production is highly automated with very few on-site workers, even by Chinese standards.
We improved the design of the production chain and also could deal with most of the function errors ourselves, which ensures continuous smooth production, explained Enerver Ye.
A positive outlook on China’s domestic market
China has made its carbon peaking and carbon neutrality goals by 2030 and 2060 respectively. Bioenergy will play an essential role in China’s long-term energy transition.
However, Chinese customs authorities have classified biomass fuels such as wood pellets and palm kernel shells (PKS) as being fuels derived from “waste” and, as such, imposed a ban on their imports in 2017.
Recently, small-scale “test” imports of such biomass fuels are being allowed. According to some industry observers, China is preparing to reopen for biomass-fuel imports, especially for use by power plants.
We expect the reopening of China’s biomass-fuels imports. If China’s biomass power plants and coal power plants sign long-term contracts with pellet suppliers in the domestic and international markets, it will keep this industry growing in a more healthy and stable way. Power plants will consume huge amounts of biomass fuels, thus long-term contracts from power plants will keep the market stable. We estimate the global price will increase about 10 percent if China re-opens for biomass-fuel imports, remarked Enerver Ye.
Honeycomb also expects their successful application experience on ENplus and Forest Stewardship Council (FSC) certification could contribute to domestic pellet industry development and standardized management.
After we got ENplus certification in October 2022, we soon also got FSC certification in November 2022. We trust that these international certificates could help to establish our reputation in the global market, said Enerver Ye.
Build a second pellet mill in Yangzhou City
The scale of the wood processing industry in Taicang City is however shrinking due to two factors.
Firstly, the majority of the wood imported and processed is used in the property sector and downstream industries such as building construction, along with home- and office furnishings. China’s central government is making an effort to restructure its economy and the property industry with its high carbon intensity is declining.
Secondly, Taicang City is taking measures to improve the management of its local wood processing industry. Small and polluting facilities are facing a “clean-up or close down” reprimand from local authorities.
Honeycomb has secured a factory site in nearby Yangzhou city, which too has a sizeable wood processing industry within a 50 km radius and convenient transport infrastructure.
The planned pellet production capacity for the Yangzhou plant is 500 000 tonnes-per-annum, which could possibly make it the largest of its kind in China.
Exploring heat, power, and metallurgical applications
Honeycomb has multiple development strategies for its mid- and long-term development.
For the domestic market, the company aims to establish pellet supply to industrial clients within a 150 km radius distance of its facilities as 150 km is a reasonable profit threshold according to Honeycomb’s estimation. It also monitors international market trends and is active in promoting its products on professional social media, such as LinkedIn.
Moreover, the company is actively working with academic research institutes in China, as the value of biomass for carbon reduction purposes could be further explored in the metallurgical industry.
For example, biomass has the potential to replace a share of the coal used in the domestic iron and steel industry.
Accounting for half of the global iron and steel industry’s carbon emissions, the sector accounts for an estimated 15-17 percent of China’s total annual carbon emissions, second only to China’s power sector.
In short, biomass pellets and companies like Honeycomb will have a key role to play in China’s decarbonization efforts.
This article was first published in Bioenergy International no. 2-2023. Note that as a magazine subscriber, you get access to the e-magazine and articles like this before the print edition reaches your desk!