Iceland would seem way off the map when it comes to biomass pellets. Yet rumour had it that there was a wood pellet facility operating on the east coast. What’s more, the said plant was producing pellets for space heating. Bioenergy International headed out to Eskifjörður in the Land of Fire and Ice and found a pair of entrepreneurial pioneers at the epicentre of a rapidly evolving value chain.
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With almost two percent forest- and woodland cover or about 1 906 km2, this remote and sparsely populated Nordic country is better known for its spectacular land- and seascapes, everchanging weather, fishing industry, alumina smelters, Northern Lights, volcanos, glaciers, ponies, and puffins – a truly rugged, barren, and at times, otherworldly, wilderness.
Little wonder that Iceland has in recent years exploded as a tourist destination. Indeed, tourism provided 39 percent of Iceland’s annual export revenue and contributed about 10 percent to the country’s GDP in 2022 according to a report from Islandsbanki (Bank of Iceland).
With a population of just over 387 000, a mixed blessing for Icelanders no doubt as the country anticipates welcoming 2.3 million tourists in 2023, bringing it back to pre-COVID volumes.
“Ilmur”, as the pellet brand is called, is manufactured in Eskifjörður, a large quayside village on the northern shore of Eskifjörður, part of Reydarfjörður (Reydar fjord), and located around 50 km from the town of Egilsstaðir which is served by an airport.
The plant is sited in an industrial zone close to the quay housed in an otherwise inconspicuous building were it not for a high plank wall and wooden facade shingles.
Einar Birgir Kristjánsson is the co-founder and co-owner of Tandrabretti, the company producing the pellets.
As the day progresses it becomes very clear that Einar epitomizes a serial entrepreneur borne out of both necessity and opportunity.
Like many, I’ve done my time on a trawler, and have tried my hand with a mussel farm out in the fjord here but that failed. The mussels grew alright but slowly and not in any viable quantities compared to other parts of the country. I started Tandraberg back in 2001 as a stevedoring, and port services company in a shed in Neskaupstað, a village about 25 km from here, recounted Einar Birgir Kristjánsson.
Pallets and pellets
Today, Tandraberg Group has several businesses under its wing including pallet manufacturing, and with Tandrabretti, pellet manufacturing.
The former started up in Neskaupstað in 2016, and the latter together with partner Magnus Thorsteinsson started up in Eskifjörður almost ﬁve years ago.
Soon upon arrival, it was straight oﬀ to the production hall as pellet production was in full motion.
We recently installed a new press but suddenly ran into some problems that we haven’t ﬁgured out properly yet. Unlike most of the equipment around here, the press is actually new, not a used piece of kit, said Einar as we quick-footed it toward the production hall.
Starting with the receiving yard, it becomes immediately apparent what two percent forest cover means in feedstock terms – recycled wood.
Our primary feedstock is made up of discarded wood pallets and wood packaging. We collect this ourselves from local industries here in the region as a recycling service, said Einar.
This includes two of the country’s largest alumina smelters that are located in close proximity.
In Neskaupstað we produce wood pallets from imported wood components primarily for the ﬁsh processing plant located there and the smelters. Electrodes and other consumables for the smelters are shipped in wooden packages cases, and these we collect while we supply pallets for the outgoing products explained Einar Birgir Kristjánsson.
The material is shredded onsite using either a well-worn Haas or newer Hammel shredder with a magnetic separator to remove nails, fastenings, and the like.
The shredded material is stored indoors and using a wheeled loader fed into a grinder to reduce the particle size further.
This material passes a second magnetic separator to remove residual metal contaminants such as staples, a screen to remove oversized particles, and an eddy current sifter to remove light contaminants such as paper, foil, and plastics.
It is quite an eﬀort to remove these contaminants, especially metals but we don’t want these ending up in the die, let alone the pellets, said Einar.
The sized material is then fed into a rotary drum dryer to bring the moisture content down from about 18-20 percent to around 10 percent.
The dryer is currently oil-ﬁred but this will be switched to a biomass-ﬁred unit during the summer to utilize reject pellets and waste wood from production, Einar said.
From the dryer, the material enters a conditioning silo located outside the building from which it is fed to a new Salmatec Maxima 700 pellet press. The 6 mm pellets are then cooled, sieved, and packed into 550 kg big bags or 18 kg sacks.
At the moment we’re producing animal bedding pellets, and these go into big bags. In total, we’re aiming to produce around 5 000 tonnes of pellets in 2023, Einar Birgir Kristjánsson said.
Developing a market base
Since first venturing into pellets ﬁve years ago, Einar, and his partner Magnus, have found themselves not only having to learn how to produce pellets but also develop a market for pellet usage.
Until about two years ago we were focused on how to produce pellets, and in the process have discovered innumerable ways of how not to make them. At the same time, we have had to develop a market and distribution system for them, remarked Einar Birgir Kristjánsson.
Iceland has geothermal district heating and an abundance of hydroelectricity.
This region is the oldest part of Iceland geologically speaking with few geothermal sources. It has cooled oﬀ so to say. You may be surprised to learn that we do in fact experience local power shortages during the winter with so much electric heating not to mention vulnerability in the event of storms. The peak load and backup for heating is usually oil, and this is a market we want to address explained Magnus Thorsteinsson.
A key demonstration project in this respect is to be found in Neskaupstað. Here the company installed a 500-kW pellet boiler from Greece, setting it up as a containerized unit complete with pellet storage in the car park next to the council oﬃces to replace an existing oil-ﬁred peak and backup heat plant.
It is a watershed project for us. Maintaining clean air quality is a primary public concern, and public perception of biomass combustion is of dirty smoke from open ﬁreplaces. There are simply no contemporary references like in Austria or Sweden. I had a resident from across the street one day when I was on site, pointing at the ﬂue while complaining bitterly that the boiler should never have been allowed with all the smoke it would produce when ﬁred up. I told him that it was actually running full belt and showed him inside. It totally changed his attitude, remarked Einar Birgir Kristjánsson.
Several pellet boilers in the 100 to 500 kW range have since been installed, and more are in the pipeline.
To enable more eﬃcient pellet delivery, the company is developing its own bulk delivery solution with a converted drop-hook bulk tank, and a used feed blower in tow.
Securing a wider feedstock base
While clean recycled wood from pallets, and packaging is one feedstock source, there is limited local availability.
The capital Reykjavik is by far the country’s largest population centre but Eskifjörður is about as far from Reykjavik as one can get. Road transportation is both costly and winter-time not seldom impossible.
Also, there are no railways in Iceland, bar a 5-metre stretch of historic track in the harbour of downtown Reykjavik.
Road logistics is always a challenge here but shipping by sea is an option, remarked Einar adding that he’d just had a conversation with a large recycling company in Reykjavik that had heard about the pelleting plant, so there might be a way forward.
As it happens, a sizeable share of Iceland’s public- and private forest estate is found in eastern Iceland including the Hallormsstaður National Forest, the country’s largest forest.
We have about 2 000 tonnes of forest thinning waiting at roadsides in the forests around Egilsstaðir, and have some oﬀ cuts from our pallet manufacturing facility in Neskaupstað that we can use, explained Einar.
While 2 000 tonnes of wood may not sound much, it represents 15 to 20 percent of the national woodchip harvest according to Skógræktin, the Icelandic Forest Service, which incidentally is also located in Egilsstaðir, one of few government agencies not located in Reykjavik.
This is why we bought this used timber haulage truck from Germany which just arrived before you did, commented Einar with Magnus adding that word amongst forest owners of its very existence has already spread.
The truck hasn’t been in the country for 24 hours and that was a caller wondering if we could collect some timber for him. Our gamble on the truck would seem to be oﬀ to a good start, remarked Magnus after having excused himself to take the call.
The logic is simple. If Tandrabretti is to grow its pellet production in the medium to long term, then it needs to provide for infrastructure that doesn’t yet exist. And building this infrastructure while providing a market for thinning wood, encourages landowners to invest in aﬀorestation on their land.
An investment that in previous years was eligible for a generous farm aﬀorestation grant that covered 97 percent of establishment costs, including fencing, roads, site preparation, planting, and the ﬁrst thinning.
Building and operating a pellet plant in say Germany or Sweden is so much easier in that you just need to focus on the plant and supplying the market because all the necessary upstream and downstream infrastructure is already in place. Here we have to develop each link of the entire value chain ourselves – from the forestry operations to heat as a service – to become a fully vertically integrated business. And that includes practically all O&M, repairs, and replacements for each link along the way, Magnus Thorsteinsson pointed out.
Exploring biochar and ash recycling
The duo also has their eye on producing biochar from logging residues for the barbecue market as well as use as a soil enhancer.
The company is a partner in a newly started biochar project with several stakeholders in the value chain including the Ministry of Agriculture.
It’s a natural progression for us. Providing a useful outlet for forest owners including ourselves but also for use by farmers. Soils here are poor and thin and biochar has useful soil enhancement properties as well as carbon storage attributes. And we have the ash from the pellet boilers that we supply which at the moment is not used. So, if we can close the loop by combining these in some way, then we can push the dial to become a carbon-negative pellet producer, concluded Magnus Thorsteinsson.
Clear is that the Icelandic bioenergy landscape is evolving fast, almost as rapidly as the weather changes, thanks to a pair of persistent entrepreneurial pellet pioneers.
And “Ilmur”? It’s an Icelandic expression for the physical and psychological sense of well-being that a pleasant fragrance or aroma conjures up.
Now that is an expression that ought to be adopted by the wider pellet stove community.
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!