Once again, the US Industrial Pellet Association’s (USIPA) annual Exporting Pellets Conference is about to get underway in Miami Beach, Florida (FL), a location where USIPA has held the conference on numerous occasions previously and roughly at the same time of year.
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It is also hurricane season in the Caribbean and US Gulf coast, and while Miami and eastern Florida remained unscathed, Hurricane Ian caused severe devastation in the southwestern part of the state.
USIPA’s annual Exporting Pellets Conference is a must-attend for all those involved in the industrial wood pellet value chain – producers, traders, shippers, energy utilities, certification bodies, and tech providers to mention a few. Given that the largest volume of industrial wood pellets is produced in the United States and Canada of which practically the entire volume is destined for export markets in Europe, the Caribbean, and South East Asia, it is as the conference name “Exporting Pellets” suggests, a very international affair.
With close to 300 pax registered to come to Miami Beach a fortnight in advance of the conference, it is bound to be a record-breaking event in terms of attendance. It ought not to be such a surprise considering the dilemma Europe finds itself in on account of Russia’s (or rather Putin’s) invasion and war of attrition in Ukraine.
Economic sanctions imposed by the EU have amongst other things stopped the import of roundwood, woodchips, and pellets from Belarus and Russia which in turn has led to increasing prices as available volumes become short. Though Belarussian and Russian pellets are primarily destined for residential and space heating markets, the shortfall is in the region of 3 million tonnes on an annual basis and is against a backdrop of a growing market.
Heating is a keyword as Europe heads into the annual heating season. Gas flows to southern Europe such as Italy, a gas-dependent member state, via Ukraine have been curtailed. Although gas supplies to Germany, another major gas user, had already been stopped for “extended unscheduled maintenance” on the Russian end, both NordStream I and II pipelines have since been rendered technically inoperable by persons or entities yet unknown.
This is causing what could be the single largest anthropogenic methane slip in modern times as an estimated 800 million Nm3 of methane, a potent greenhouse gas (GHG), contained in the pipelines erupt from the surface of the Baltic Sea to the atmosphere. And while it is not possible to attribute a specific weather event such as Hurricane Ian directly to climate change, warming oceans make conditions more favorable for such extreme weather events.
With electricity prices already through the roof prior to the suspected pipeline sabotage, it is clear that gas supplies to northern Europe will not be back anytime soon. Authorities, households, industries, and utilities are frantically looking to alternatives while bracing themselves for even tougher times ahead – Danish authorities ordering Ørsted to ready its remaining oil- and coal-fired units the most recent example.
So, can North American producers ramp up existing facilities to nameplate or above nameplate capacities? Will European buyers be able to secure additional volumes? Can North American residential pellet producers aggregate additional volumes and collaborate on supply chains to supply the European residential sector?
With these and other questions in mind, USIPA Exporting Pellets Conference 2022, which kicks off later this afternoon in Miami Beach, is set to be a watershed event.
