status update: canadian wood pellet industry · ¡the global wood pellet industry is growing ¡in...

GordonMurray,ExecutiveDirector

StatusUpdate:CanadianWoodPelletIndustry

¡ Woodpellets101¡ Wherepelletsfitinthebioenergysector¡ Wherepelletsfitintheforestrysector¡ Pelletfibresources¡ Productionandconsumptionstatistics¡ Exportmarkets¡ Canadianmarketopportunity

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¡ Renewablefuel¡ Madefromcompressedwoodfibre.¡ Ligninbindsthefibre.Noadhesivesneeded.

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Powergeneration

Efficiency~35%

Heat,&hotwater

Residential/commercial/institutio

nal

Efficiency~90%

Animalbedding&oil

patchabsorbent

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¡ Ethanol– 1.6bn litresperyear.Netimporter.Madefromcornandwheat.Nationalmandate– 5%.

¡ Biodiesel– 350mn litresperyear– mostexportedtoUSA,thenre-importedasblendeddiesel.Canola,animalfats,recycledcookingoils.Mandate- 2%.

¡ Woodpellets– 2.7millionTPY,90%exported.

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¡ Annuallogharvest:130milliontonnes¡ Fibre usedforpellets:5milliontonnes (4%)¡ Annualforestproductsrevenue:$60bn¡ Annualrevenuefrompellets:$0.3bn (0.5%)

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• 44pelletplantsinCanada• 4 milliontonnes annualcapacity• 1milliontonnes newcapacity2015-16

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1 PinnacleRenewableEnergy2 PinnacleRenewableEnergy3 PinnacleRenewableEnergy4 PacificBioEnergy5 PremiumPellet6 PinnacleRenewableEnergy7 Canfor/PinnaclePellet8 Tolko/Pinnacle9 Canfor/PacificBioEnergy10 Canfor/PacificBioEnergy

PlanningStage: Newproannouncedconversionofaparticleboardplanttoproduce80,000TPYofpelletsinSmithers

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LoggingresiduesSawmillresidues

- sawdustandshavings- Typicallynotwoodchips

Pelletproducersoftentradewithpulpmills– barkinexchangeforsawdust/shavings

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Sources:HawkinsWright,REN21,FutureMetrics

1.7 2.2 2.64.0 5.2

7.69.7

11.714.5 15.7

18.3

22.4 23.626.1 27.0

0.0

5.0

10.0

15.0

20.0

25.0

30.02010to2015averageannualgrowth– 14%

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Sources:REN21GlobalStatusReport2016,HawkinsWright

TopEuropeanProducers:

GermanySwedenLatviaEstoniaFrancePortugal

Total– 27mn tonnes

USA,7.4

Canada,1.9Europe,

14.3

Russia,1.0

Vietnam,

1.1

ROW,1.4

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Source:HawkinsWright

• Europecontinuestodominate

• Europe’sheatsectorexceedsindustrialsector

NA

21% Asia

2% Europe73%

Russia4%

NA

1% Asia

13%

Europe86%

NA

12% Asia

8% Europe78%

Russia2%

Heating– 14mn tonnes

Total– 27mn tonnes

Industial – 13mn tonnes

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¡ 2009:RenewableEnergyDirective– 20-20-20targets

¡ 2010:NationalActionPlans¡ Nationalsupportschemes:greencertificates,contractsfordifference,renewableheatincentive

¡ 2014:ClimateandEnergyFrameworkfor2030– 40%GHGcutfrom1990,27%renewableenergy,27%improvementinenergyefficiency

DataSource:FutureMetrics

0

10

20

30

40

50

60

70

2016 2017 2018 2019 2020 2021 2022 2023 2024Industrial Heat Total

Average4.8 mn tonnes peryearofgrowthAssumessomeco-firinginCanadaandUSAAfter2018,mostgrowthoccursinAsia

¡ EPHLynemouth,UK:645MW,2.5mn TPY¡ MGTTeeside,UK:299MW,1.6mn TPY¡ Langerlo,Belgium:420MW,1.0mn TPY¡ RWEAmer,NL:600MW,1.2mn TPY¡ Engie Maaslavke,NL,800MW,0.2mn TPY

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¡ KOSEPYeongdong,SK,125MW,0.6mn TPY¡ KOSPOSamcheok,SK,2,000MW,0.4mn TPY¡ NakayamaNagoya2,JPN,110MW,0.1mnTPY

¡ SomaKyodoJikahatsu,JPN,112MW,0.02mnTPY

¡ Orix Hibikinada,JPN112MW,0.1mn TPY

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983

107 62218 205 150

1,206

22880

205

86 49

1,820

230230 220

70 200

200400600800

1,0001,2001,4001,6001,8002,000

UK Belgium Japan US Italy SKorea

2014 2015 2016(F)

¡ DemandinJapanandKoreaisgrowing¡ Policyuncertaintyremains.¡ Asia-PacificandRussianpelletproducershavetransportationadvantageoverNA

¡ Canadianshavequalityandreliabilityadvantage

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¡ Primarilyanindustrialmarket¡ Feed-in-tariffforIPPs– manyunderdevelopment

¡ Replacementofnuclearpowerbythermalcoalplantsandbiomassco-firing

¡ Consumeschips,PKS,andpellets¡ Preferenceforquality,reliabilityandlongtermcontracts= advantageforCanada

¡ Primarilyanindustrialmarket¡ Renewableportfoliostandard¡ Marketisgrowing¡ Priceisnumberoneconcern¡ Purchasesdominatedbytendering¡ ConsumebiomassSRFpellets¡ DominatedbyVietnam

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Vietnamese Production Plant

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Threat and Opportunity

¡ “Pan-CanadianFrameworkonCleanGrowthandClimateChange"

¡ Agreedtoin2016byfederalgovernment,provincesandterritories

¡ 2030target:30%GHGreductionfrom2005level

¡ Pricingcarbonpollution- $10pertonnein2018risingto$50pertonne in2022

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PDF version Cat. No.: En4-294/2016E-PDF ISBN: 978-0-660-07023-0

Photos: © Thinkstock, 2016

Aussi disponible en français

¡ Increaserenewableandnon-emittingelectricity(currently80%,ranked4th inworld)

¡ Phaseoutcoalpowerby2030(35milliontonnesofcoalperyear)

¡ Eliminatedieselpowergenerationinremotecommunities

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OPG’s240MWATkokanOntarioPlant

FullfiringonindustrialwoodpelletsConvertedfromcoal,nowfiringon100%woodpellets

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916PJ

766PJ

183PJ

60PJ 12PJ 12PJ

NaturalGas

Electricity

Oil

Firewood

WoodPellets

Propane&Other

ResidentialandCommercialHeatandHotWater

Total:2688PJ

¡ Heatingoil– 86centsperlitre,85%efficiency¡ Naturalgas– 27centspercubicmetre,85%efficiency

¡ Woodpellets- $300perton,85%efficiency¡ Electricity– 15.4centsperkWh,100%efficiency

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Source:Enbridgewebsite

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Sources:Enbridge,NationalEnergyBoard,WPACresearch

$8.52

$20.76

$27.55

$42.78

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

NaturalGas WoodPellets HeatingOil Electricity

$/GJ,adjustedforefficiency

¡ Canadianannualnon-gascommercialandresidentialheatandhotwaterenergyconsumptionis1,033,000,000gigajoules

¡ 1,033,000,000gigajoulesisequivalentto71milliontonsofwoodpellets.

¡ Canadacurrentlyproducesabout2.7milliontonsofwoodpellets

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¡ Theglobalwoodpelletindustryisgrowing¡ Intheshortterm,productioncapacityhasoutpaceddemand,thiswillbecorrectedby2018

¡ WillseecontinuedgrowthinEuropeandAsia¡ JapanismostinterestingAsianmarket¡ Significantpotentialdomesticpotential¡ Limitedcompetitionwithpulpsector¡ Jobsfromwoodwaste!

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Formoreinformation:

ContactGordonMurray

gord@pellet.org

(250)837-8821

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