Canada's largest and the world's second largest wood pellet producer, Pinnacle Renewable Holdings Inc (Pinnacle) has disclosed that it has entered into a new long-term so-called "take-or-pay" off-take contract with Hanwa Co., Ltd. (Hanwa), a large, diversified trading company in Japan.
According to a statement May 22, under the terms of the contract, Pinnacle will supply 75 000 tonnes per annum of industrial wood pellets to Hanwa beginning in early 2022 for an undisclosed number of years. The industrial wood pellets will be used by an unnamed biomass power generation plant in Japan.
We are pleased to enter into this long-term relationship with Hanwa, as it continues to contribute to Japan’s strong commitment to decarbonization. With the addition of the fourth contract of 2018 with Japanese customers, our contracted backlog is now CA$3.8 billion, said Robert McCurdy, Chief Executive Officer of Pinnacle.
Demand for industrial wood pellets in Japan is supported by the government’s Feed-in Tariff (FIT) system. Pinnacle currently operates seven industrial wood pellet production facilities in western Canada, a port terminal in Prince Rupert, British Columbia (BC), and has a new production facility under construction in Smithers, BC.
The company has entered into long-term take-or-pay contracts with utilities in the UK, Europe and Asia that it says represents 102 percent of its production capacity through 2021 and nearly 83 percent of its production capacity through 2026.