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The Great Canadian Pellet Coup

A trip to Tokyo, Japan to attend the 9th CMT Biomass Pellet Trade & Power is at an end. Being the third consecutive conference, the decision to attend was not taken lightly. With IFAT in Munich, Germany and EUBCE in Copenhagen, Denmark in the balance, it had better be good. That was the thinking while being awestruck over the Siberian sunset on the northern flight route – incidentally the shortest route from Sweden via Finland's HEL, a clear advantage from a carbon flight print perspective.

A spectacular “flag of Sápmi” coloured Siberian sunset seen en route to the Land of the Rising Sun.

Attempted wittiness aside, the two-day conference event, which also had an optional pre-conference workshop on biomass sourcing as well as an optional post-conference tour – this year to Akita to a 20 MW domestic woodchip and palm kernel shell (PKS) fired power plant, was as in previous editions well attended.

In fact, very well attended. It’s easy to gauge as the conference was held at the same up-market hotel venue close to Shinagawa train station, in the same “ballroom” and it had the same layout as the previous two editions. Nothing wrong with that though a little jazzing up wouldn’t hurt in terms of backdrop décor – as an avid but very amateur photographer one cannot help but swear over oversized water bottles that steal focus and the lack of event branding behind speaker podium that make for boring photo shots.

Two years ago, I’d suggested in my review of the 7th edition that (primarily) North American pellet producers had “hopes pinned on that Japan will soon emerge as the new go-to-market” and at the close of last year’s edition I postulated that it seemed “almost more like a call for last orders”.

If those were indeed calls for last orders then it would seem that at this year’s edition, with the exception of Enviva, US producers have been “coup’ed” out by their northern neighbours to become the last player with influence in the game as it were. Thus far one should add.

Dr Ha-Yan Lee, Executive Vice President Global Business Development Renova Inc., outlining the company’s renewable power ambitions in Japan and elsewhere.

It was the first major notable difference between the editions. A guesstimated 300 qualified attendees from Japan and across Asia, notably South Korea, Thailand, Malaysia, Myanmar, Taiwan, Hong Kong, Singapore, and Vietnam along with Australia and Canada converged in Tokyo. Yet the absence of US pellet producer representatives at the conference was apparent –  apart from Enviva that along with USIPA’s Executive Director Seth Ginther attended.

An apparent absence since it is of course entirely possible that said producers were elsewhere in the venue, in Tokyo or in Japan. A similar reference was made by a speaker that lamented the apparent absence of Vietnamese pellet producers in the conference room but who were present and staying at the venue. A dilemma no doubt for the organisers that is difficult to address.

Taking questions from the floor about Thai bagasse pellets from, Suwat Kamolpanus, Managing Director Power Business Mitrphol Sugar Co Ltd seen with Fiona Matthews, Research Manager, Hawkins Wright.

Be that as it may, compared to last year, Indonesian oil palm industry representatives were also seemingly absent despite Japan being a significant market for PKS. However, as noted last year, this should not be so surprising.

As expected, Japan is pushing sustainability issues such as the Clean Wood Act although, as gleaned from the conference, agricultural biomass such as PKS and oil palm trunk (OPT) pellets are in limbo with the Roundtable on Sustainable Palm Oil (RSPO) certification seen as the best bet pending eventual further clarification.

It makes perfect sense. After all, if the plantation supplying the palm oil mill is RSPO certified, then the fresh fruit bunches (FFB) along with the palm fronds and OPT on the plantation are too. If the crude palm oil (CPO) from the palm oil mill is RSPO certified, then it stands to reason that the empty fruit bunches (EFB) and PKS are certifiable by default. As well as other derivatives such as palm kernel oil (PKO and palm fatty acid distillate (PFAD).

Miyuki Tomari, President, Biomass Industrial Society Network (BIN) discussed the Clean Wood Act and fuel traceability implications for the feed-in tariff (FIT).

It’s an interesting administrative sticking point – although a tree, rubberwood (Hevea brasiliensis) is classed as an agro-product since it is grown in plantations for latex production. A rubberwood tree much like an oil palm or Southern Yellow Pine (SYP) – which actually consists of four pine species; Shortleaf Pine (Pinus echinata), Slash Pine (Pinus ellioti), Longleaf Pine (Pinus palustris), and Loblolly Pine (Pinus taeda) in the US southeast – in that all three have about a 27 to 33-year rotational lifespan.

Ironically, just like oil palm – oil palm is native to West Africa and rubberwood native to Brazil – Thailand, Indonesia, Malaysia, India, and Vietnam where rubberwood has been introduced accounts for 75 percent of global latex production. For oil palm which has more stringent growth criteria, Indonesia and Malaysia dominate totally with Thailand in at a shy third spot.

According to the Forest Stewardship Council (FSC) of the around 11 million ha global rubberwood plantation estate, only 4 percent of the area is currently FSC certified which could have implications as far as importing rubberwood pellets to Japan is concerned as PEFC and/or FSC forest certification would seem a requirement.

Close of day and time to get the party started – Gordon Murray, WPAC makes a memorable entrance.

Enter Canada. Clear is that on paper western Canada, ie British Columbia (BC) is well poised to service Japan and other Asian wood pellet consumers. Several pellet producers already do and have done so for a number of years, a not so unimportant factor in a market that builds on human relationships and values stability and longevity.

And while the Wood Pellet Association of Canada (WPAC) may wonder if it burnt a few bucks too many as conference partners and reception hosts, one thing is sure – the entrance Gordon Murray, WPAC, Executive Director made at the close of day one to usher delegates into the following “Canadian Pellet Day” reception was priceless and a very shrewd statement indeed.

The reception? It went down a treat with almost all present and accounted for at 9.00 am conference day two.

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