The production of wood pellets has increased dramatically in recent years due in large part to aggressive emissions policy in the European Union (EU); however, the market is still small and fraught with uncertainty as the international trade of wood pellets increases.
Advantages of wood pellets include (1) the main feedstock, which is wood waste from primary and secondary saw mills, and (2) the high energy density and consistency of the fuel, which allows international trade to be feasible. Concerns about greenhouse gas (GHG) emissions have piqued interest in the use of wood pellets as an alternative to fossil fuel sources for boilers as well as electricity generation.
Currently, the majority of demand for wood pellets originates from the EU, with particular interest in Nordic countries. Major exporters are the United States and Canada, although Russia and parts of Asia and South America have potential to become exporting markets. In addition to the possibility of other exporters, policy and economic factors have a large impact on the trade of wood pellets. Historically, wood waste, such as pulp and sawdust, has been(1) used for energy within the wood product plants or for local municipalities, (2) disposed of in landfills, or (3) exported, especially to Japan. The supply of wood waste is driven by the demand for wood-based products, such as paper and lumber, rather than the demand for wood pellets). In times of low wood-waste supplies, as was the case in 2008, some facilities have resorted to using round wood and other higher-quality wood sources to produce wood pellets. Tracking the trade of wood pellets internationally is cumbersome; trade statistics combine sawdust, wood waste, and wood scrap, whether or not agglomerated in logs, briquettes, pellets, or similar forms, into one category. Fortunately, a new code for wood pellets was added in 2012 to the Harmonized Commodity Description and Coding System, which is the international standard for trade nomenclature administered by the World Customs Organization; this change may lead to more consistency in international trade data for pellets among the United States and other countries’ trade agencies. Quantities of biomass traded for energy use are also obscured by countries that export forest products or agricultural products, which could be used for energy production, but the final end use is unknown at the time of export.
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