Market Prediction and Potential Supply of Biomass Pellets

According to the statistics, biomass currently provides almost 10 percent of the world’s energy supply, two-thirds of which is used for cooking and heating in developing countries. However, in developed countries, biomass is often used as a replacement for fossil fuels. According to the International Energy Agency’s August 2014 Renewable Energy Market Report, global renewable generation will rise by 45 percent and is expected to make up nearly 26 percent of electricity generation by 2020. As an important form of biomass, biomass pellets made by pellet plant are now used widely around the world that promotes the development of pellet plant in return.

Several  studies  recently  performed  by  renowned  and  acknowledged  organizations  have  investigated the  potential  demand  for  wood  pellets in  the  years  to  come.  There is no denying that the increasing demands for pellets will also bring in good chances of pellet mill marketing. Existing  analyses  include  forecasts  by Ekman & Co., AEBIOM and NewEnergy Finance. All projections are based on Europe, but estimates are for different years. According to such estimates, EU demand could range between 20 and 50 million  tons by 2020, depending to a large extent on: 

1. the policies on co‐firing in a.o. the UK, Netherlands, Belgium, Germany, Poland, as well as the combination of market dynamics for coal plus CO2 emission allowances; 

2. the continuity of support measures for the uptake of the market for pellet stoves and boilers, as  well  as  the  price  of  fossil  fuels  for  heating  and  the  related  attractiveness  to  switch  to  wood pellets for small‐scale users (households and medium‐sized residential buildings).  By extrapolating the demand exponentially, based on current consumption levels as they have grown in the past, a consumption a little lower than 35 million tons could be reached in EU by 2020. 
 

Therefore, the huge demands for biomass pellets raises a challenge for pellet mill manufacture for progress in design and production of pellet mills.


Read:How to start a pellet plant
 

 The  demand  in East  Asia  will depend strongly on developments in  Japan, South  Korea and China,  but can be assessed in the range between 5‐10 million tons by 2020. The demand in the U.S. will be probably limited to small‐scale use in households and main imports will come from Central and Eastern Canada. The  demand  in  Canada  and  the  country’s  subsequent  export  capacity  will  be  correlated  to  the  actual implementation  of  co‐firing  plans  announced  by  the  Ontario  Power  Generation  to  phase  out  coal; depending on the extent of OPG fuel switch projects, the domestic biomass demand might increase of several  hundred  thousand  tons  per  year.  However,  the  export  capacity  of  Canada  is  likely  to  remain strong in the future. 
 

 In a “business as usual scenario” the total potential available for import to EU may increase drastically from about 42 PJ in 2010  to over 280 PJ in 2020 (almost 16 million tons) as shown in figure 1.9. This scenario is based on past and current import trends, industry expectations, press releases of individual companies,  expert  opinions  and  on  scenario  studies  by  Schouwenberg  and  de  Wolff  (2011),  through which a number of main future sourcing areas was identified. 


 

A  “high  import”  scenario  was  also  developed,  based  on  the  assumptions  that  the  rapid  growth  of  biomass demand in EU would trigger investments in additional pellet plants and a strong development of  short  rotation  crops  and  energy  plantations  (i.e.  Eucalyptus)  in  some  areas  of  the  world  such  as Brazil, Uruguay, West Africa, Mozambique and Russia. These assumptions lead to an additional amount of 17 million tons of wood pellets in 2020 compared to the  business  as  usual  scenario,  bringing  the  total  to  almost  33  million  tons  or  600  PJ  by  2020.  Such  assumptions are to some extent arbitrary, but reflect the current dominant position of Latin America, the expected rise of Sub‐Saharan production potential, and the large existing potential from forests in North‐West Russia. While all developments are not deemed unrealistic, they are highly speculative, and would depend amongst others on a strong demand for solid biomass in the EU and elsewhere and on very rapid investments in the sourcing areas. 

Pellet plant offered by Kingman are characterized with compact structure, continuous running and high efficiency. Customers can choose according to your own conditions. If you need any pellet plant, please contact us and get more information about our pellet plant. As an professional manufacture of pellet processing equipment, KMEC can provide you with first-rate pellet plant and services.
---------------------------------------------------------------------------------------------------------------------------------------------------