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EmergingPelletMarketsinAsia
GordonMurray, ExecutiveDirector
¡ ShortintroductiontoWPAC¡ Industryprioritiesfor2015¡ Globaloverviewofpellettrade¡ BCpelletsector¡ Koreanpelletmarket¡ Japanesepelletmarket¡ China
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¡ AdvocateonbehalfofCanadianpelletindustry
¡ 65members:pelletproducers,ports,stevedoringcompanies,traders,equipmentmanufacturers,engineersandconsultants,insuranceindustry&universities.
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¡ PromotingCanadianpelletsustainabilitytoEurope
¡ GettingmembersSBPcertified¡ Improvingfibreaccessandsecurity¡ Safety¡ AdvocacyinUKandNetherlands¡ Pelletqualitycertification¡ Datacollection:boilers,stoves,pelletprices
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Sources:HawkinsWright, REN21
HAWKINS WRIGHT
Global wood pellet production About 28Mt in 2015… (Heating = 15Mt, Industrial = 13Mt)
Source:(REN21,(FAO(and(Hawkins(Wright(
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Sources:ArgusMedia,HawkinsWright
NorthAmerica,4
EuropeDomesticHeat,11
EuropeIndustrial,10
KoreaandJapan,2
Total:27milliontonnes
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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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Company LocationCapacity(000tons) Comments
1 PinnacleRenewableEnergy WilliamsLake 2002 PinnacleRenewableEnergy Quesnel 1003 PinnacleRenewableEnergy Strathnaver 2204 PacificBioEnergy PrinceGeorge 3605 PremiumPellet Vanderhoof 1906 PinnacleRenewableEnergy BurnsLake 4407 Canfor/PinnaclePellet Houston 2208 Tolko/Pinnacle Lavington 250 Newlycommissioned9 Canfor/PacificBioEnergy FortSt.John 75 Commissioning Q11610 Canfor/PacificBioEnergy Chetwynd 100 Newly commissioned
2155
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Company Location Capacity Comments1 VeoliaEnvironmentalServices FortSt.James 40MW Underconstruction2 VeoliaEnvironmentalServices Merritt 40MW Underconstruction
Eachplantwillconsume200,000ODTperyear.,competingwithregionalpelletplants.Thisisasorepointwithourindustry.
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LoggingresiduesSawmillresidues
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• Globalconsumption: ~28mn tonnes• Canadianexports:1.6mn tonnes• USAexports:4.4mn tonnes
UnitedKingdom,74%
UnitedStates,12%
Italy,6%Japan,5%
Korea,South,3%
CanadianExports2015
UnitedKingdom,84%
Belgium,13%
AllOthers,3%
USAExports2015
Source:GlobalTradeAtlas(note:2015estimatedasNovYTDx12/11)
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743
168
344
35 63
497
1,030
144 86 79 61 560
200
400
600
800
1,000
1,200
Vietnam Malaysia Canada Russia Indonesia Allothers
Thousandsoftonnes
2014 2015
Totals:2014:1.850mn tonnes2015:1.456mn tonnes
Source:GlobalTradeAtlas(note:2015estimatedasNovYTDx12/11)
¡ Coal:41%ofpowermix¡ PelletdemandisdrivenbyRPS:2012– 0%,2024– 10%
¡ Biomassco-firingischeapestbutcappedat30%ofrenewablemix
¡ Fivestate-controlledutilities– 85%ofpelletmarket(KOSEP,KOMIPO,KOWEPO,KOSPO,EWP)
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¡ Allpurchasesbytender– totallypricedriven¡ Vietnamhas70%ofthemarket¡ Canadaprice2014:$193pertonne¡ Vietnamprice2015:$95pertonne¡ VietnamtoSouthKoreashipping:$1pertonne
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¡ USAatadisadvantageduetodistanceandvalueofUSD
¡ Canadaatadisadvantageduetoshippingcost¡ 2016Q1:ninetenderstotaling368,000tonnes
¡ 2016All:likelysimilarto2015,i.e.1.5mntonnes
¡ Priceslikelytostaylow¡ Demandforecast~2.7mn tonnes by2020
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Source:GlobalTradeAtlas(note:2015estimatedasNovYTDx12/11)
Totals:2014:97,000tonnes2015:197,000tonnes
91
0 2 1 4
124
51
21
0 10
20
40
60
80
100
120
140
Canada China Vietnam UnitedStates Allothers
Thousandsoftonnes
2014 2015
¡ BeforeFukushima:nuclearwas29%,now2%¡ Renewableenergywas1.2%now1.6%,increasewasmainlysolarpower
¡ InterestinsolarpowerisdecliningbecausetheJapanesegovernmentwantsmorevarietyintherenewableenergymix.
¡ Thegovernmentwantstorapidlyincreaserenewablesby2030sothatsolarmakesupabout15%andothers(biomassandhydro)makeupabout10%.
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¡ SupportedbytheJapaneseFeed-in-TariffAct2011
¡ FITlevelsaresetannually¡ FITobligationtoplantoperator:20years¡ FITlevelsarehigherfordomesticforestresidue(32-40Yen/kWh)thanforsawmillresidue(24Yen/kWh).
¡ Thereareabout1.45millionkWofapprovedprojects,roughlyequally29milliontonnesofbiomassannuallyinthepipeline.Notlikelythatallwillgetbuilt.
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¡ 2012– 2015:340MWbiomasspoweradded.¡ 2016– 2017:585MWexpectedtobeadded.¡ 2018&beyond:361MWco-firing¡ ShowaShell(49MW)– operational2015,100%biomass
¡ OsakaGas(110MW)– operational2015,30%pellets
¡ Sumitomo(50MW)– operational2018,100%pellets
¡ Distributionbetweenlocalchips,PKS,andwoodpelletsisuncertain.
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¡ NoN.A.tradetodate¡ Commitmenttoreduceemissionsfrompowersectorby60%by2020duringCOP21
¡ China'sdomesticdemandforwoodpelletsisgrowing,largelyintheeastandinGuangdongprovince,wherethelocalgovernmenthasprohibitedcoal-firedboilersandthecostofpelletsislowerthanelsewhereinthecountry.
¡ NotanactivemarketforN.A.producers
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¡ Koreanmarket:volatile,notdependable.¡ JapanesebuyersaremorelikelytoenterlongtermcontractswithNAproducers(e.g.recent10-yearcontractSumitomo/Engie for100kt/y)
¡ Manynewbiomassplantssettocomeonlinewithin2years
¡ Mixbetweenchips,PKS&pelletisstilluncertain
¡ Japannotlikelytoreturntonuclearpower¡ Goodopportunityforwoodpellets
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