FAO report highlights global growth in pellet production

From Biomass Magazine

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By Erin Voegele

In late December, the Food and Agricultural Organization of the United Nations published forest products data for 2013, reporting wood pellet production soared to an all-time high last year. The growth was driven primarily by bioenergy policies and consumption targets in Europe.
According to the FAO, global wood pellet production grew by 12 percent in 2013, reaching 22 million metric tons. More than half that volume, 13 million metric tons, was traded internationally.
The FAO report indicates markets for wood pellets are dominated by Europe and North America. Europe accounted for 62 percent of wood pellet consumption and 81 percent of consumption in 2013. North America accounted for 34 percent of production and 15 percent of consumption. The amount of pellets exported from North America to Europe in 2013 doubled when compared to 2012. Most of those pellets were shipped to the U.K.
The U.S. was the top pellet producing nation in 2013, with 5.7 million metric tons. Germany produced 2.2 million metric tons, followed by Canada with 1.8 million metric tons. Sweden and Lativia produced 1.3 million metric tons and 1.1 million metric tons, respectively. The top five countries for pellet exports were the U.S., Canada, Latvia, Portugal, and Russian Federation. The top five pellet consuming countries were the U.K., U.S., Denmark, Italy and Germany, while the top five importers were the U.K., Denmark, Italy, Belgium and Sweden.
The FAO report also includes data on wood fuel, which is roundwood used for cooking, heating or power production. It includes wood that is used to make charcoal, and wood chips made directly from roundwood. The category of wood fuel, however, does not include all types of wood used for energy. For example, the data does not include wood residues from the forest processing industry or black liquor or recovered wood waste.
According to the FAO report, global wood fuel production amounted to more than 1.85 billion cubic meters in 2013. Although the volume of wood fuel production increased slightly from 2012, the increase was let than 1 percent. When compared to 2009 production, 2013 wood fuel production increased 2 percent. Wood fuel production decreased by 4 percent in North America and Asia-Pacific from 2009 through 2013. However, it increased by 20 percent in Europe, 7 percent in Latin America and the Caribbean, and 4 percent in Africa over the same period.
The Asia-Pacific region accounted for 41 percent of global wood fuel production in 2013, with production reaching 754 million cubic meters. Africa ranked second with a 35 percent share, with Latin American and the Caribbean accounting for 14 percent, Europe accounting for 8 percent, and North America accounting for 2 percent. If current growth rates continue, the FAO said Africa will produce about the same amount of wood fuel as the Asia-Pacific region by 2025.
At the global level, the FOA report shows wood fuel production accounted for 52 percent of all roundwood produced in 2013. This has declined from 54 percent in 2009. In Africa, wood fuel production accounted for 90 percent of roundwood production in 2013, and 65 percent in the Asia-Pacific region. Woodfuel use in Latin America and the Caribbean was 54 percent of roundwood, but only 20 percent and 9 percent respectively in Europe and North America.
A full copy of the report, titled “2013 Global Forest Products Facts and Figures,” can be downloaded from the FAO website.

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USDA GAIN report addresses Canadian pellet, biogas industry

From Biomass Magazine

By Erin Voegele

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The USDA Foreign Agricultural Service’s Global Agricultural Information Network has published an annual report on the Canadian biofuels industry. The report highlights the current state of the Canadian wood pellet industry.

According to the report, the expansion of wood pellet production capacity in Canada has exceeded growth in demand for export markets. While production capacity has held relatively steady since 2011, sales have shown steady growth, increasing capacity utilization.

As of this year, the report indicates Canada has 41 pellet plants with a nameplate capacity of 3.175 million metric tons. That capacity is unchanged from 2013. Capacity use, however, is expected to increase from 56.7 percent last year to 68.7 percent in 2014.  Canadian pellet producers exported an estimated 2 million metric tons of pellets this year, up from 1.64 million tons in 2013.

The GAIN report indicates the province of British Columbia accounts for approximately 65 percent of Canadian production capacity, with Alberta, Quebec, New Brunswick, Nova Scotia accounting for approximately 35 percent of capacity.

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Obama signs short-term tax extenders legislation

On Dec. 19, President Obama signed legislation that retroactively extends several tax incentives that expired at the end of 2013 and throughout this year through the end of 2014. Included in the bill are several tax incentives that benefit the biofuels and bioenergy industries.

The U.S. House of Representatives passed the bill, titled “Tax Increase Prevention Act of 2014,” or H.R. 5771, on Dec. 3 by a vote of 376 to 46. The U.S. Senate passed the measure on Dec. 16 by a vote of 76 to 16.

The legislation extends the second generation biofuel producer credit through Jan. 1, 2015. The credits for biodiesel and renewable diesel are extended through Dec. 31, 2014, while the Section 45 renewable energy tax credit has been extended through Jan. 1, 2015. The bill also extends the special allowance for second generation biofuel plant property through Jan. 1, 2015 and extends the excise tax credits relating to certain fuels through Dec. 31, 2014.

A full copy of the legislation, which also extends numerous tax incentives for individuals, businesses, and other purposes, can be downloaded from the Government Printing Office website.

Read the original article here.

Wood Resources International: U.S. pellet exports up in Q2

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By Wood Resources International LLC | December 16, 2014

Total shipments of wood pellets from North America to Europe plateaued in 2014 after almost four years of continuous increases. During the first two quarters of 2014, exportation from Canada and the U.S. were just over 1.3 million tons in each of the two quarters. This was down from the all-time-high of almost 1.4 million tons in the 4Q/13, according to the latest issue of the North American Wood Fiber Review.

Pellet volumes shipped out of Canada to Europe have actually fallen by almost 25 percent from the 4Q/13 to the 2Q/14, while volumes leaving the ports in the U.S. South did go up 10 percent during the same time period. (Note. Due to irregularities with Customs data, NAWFR collects trade data from a number of sources including Canadian and U.S. customs export data, European import data and from quarterly conversations with both pellet exporters and port contacts.)

Practically all wood pellets produced in British Columbia since the first major pellet plant was built over 15 years ago have been consumed by energy companies in Europe. However, since late last year, there has been a shift in direction for some of the pellets manufactured in the province; rather than being sent on the 16,000 kilometer long journey to the United Kingdom or the Netherlands, they are being shipped to markets in Asia, a trip that is only about half as far.
South Korea and Japan together imported about 100,000 tons of pellets from British Columbia in the 2Q/14, which accounted for 17 percent of the total exports from the province that quarter, reported the NAWFR (www.woodprices.com). This can be compared to a quarterly average of only 30,000 tons during the period 2010-2012. This shift to markets in Asia is likely to continue because demand for biomass is rising in this region. The reduced shipments to Europe from Western Canada can be expected to benefit other supplying regions to Europe, including the U.S. South, Eastern Canada and Northwestern Russia.

There are multiple factors which are likely to increase pellet shipments from the U.S. South to Europe in the second half of 2014. These factors include continued interest from governments in Europe in shifting from fossil fuels to renewable energy sources, the approaching winter, with its increased demands for fuel to heat homes, and the soaring tensions between Ukraine and Russia, which have implications for energy security for Europe.

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EPA releases updated biogenic emissions framework

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By Erin Voegele from Biomass Magazine

On Nov. 19, the U.S. EPA released a revised framework for assessing biogenic carbon dioxide (CO2) emissions from stationary sources. According to a notice published by the EPA, the second draft of the framework will undergo further review. The agency has also issued a memo providing regulatory guidance on how the updated framework will impact the Clean Power Plan and Prevention of Significant Deterioration Program.

A notice published by EPA explains that in order to continue advancing technical understanding of the role biomass can play in reducing overall greenhouse gas (GHG) emissions, the EPA has developed a second draft of its “Framework for Assessing Biogenic Carbon Dioxide for Stationary Sources” report, which will subject to additional review. “The revised report takes into account the latest information from the scientific community and other stakeholders. As a next step forward, EPA will continue to refine its technical assessment by initiating a second round of targeted peer review with the Science Advisory Board,” said the agency in a notice posted to its Climate Change website. The notice also indicates Acting Administrator Janet McCabe has issued a memorandum to the EPA’s Regional Air Division Directors describing the EPA’s current thinking pertaining to biogenic CO2 emissions in the context of the CPP and PSD program.

The revised 69-page framework describes the factors that are to be considered when assessing biogenic CO2 emissions. It also presents an equation that could be used to calculate the extent to which use of biogenic materials at stationary sources results in a net atmospheric contribution of biogenic CO2 emissions.

The EPA released the first draft of its biogenic emissions framework in September 2011. That report was reviewed by member of a Biogenic Carbon Emissions Panel appointed by the EPA’s Scientific Advisory Board. In its review, the SAB Panel said “Carbon neutrality cannot be assumed for all biomass energy a priori. There are circumstances in which biomass is grown, harvested and combusted in a carbon neutral fashion but carbon neutrality is not an appropriate a priori assumption; it is a conclusion that should be reached only after considering a particular feedstock’s production and consumption cycle. There is considerable heterogeneity in feedstock types, sources and production methods and thus net biogenic carbon emissions will vary considerably. Carbon neutrality cannot be assumed for all biomass energy a priori.” According to the EPA, the majority of the panel also said it is not appropriate to use Intergovernmental Panel on Climate Change national accounting methodologies to evaluate biogenic CO2 emissions from individual stationary sources. The EPA also indicated that although the SAB Panel did agree with some basic tenets of the first draft of the framework, they also indicated it lacked some technical elements. The panel recommended more consideration of different spatial and temporal scales, different baselines, broader discussions on leakage and soil carbon implications, and the concept of regional feedstock-specific calculations and default assessment factor values.

The updated framework addresses the SAB Panel recommendations and those made by stakeholders. According to the EPA, the updated draft includes more comprehensive discussion and analysis of baseline approaches, spatial and temporal scale decisions and implications, inclusion of alternative fate analysis for certain feedstocks and methane, leakage, and illustrative regional feedstock-specific calculations using existing data sources and models and resulting example regional biogenic assessment factor values.

The memo issued by McCabe notes that the EPA expects many states and stakeholders to look to the updated framework draft for indications of how biogenic CO2 emissions will be treated under the CPP and PSD program going forward. As such, the memo describes the EPA’s current thinking with respect to those programs and their treatment of biogenic emissions.
Within the memo, McCabe said that information considered by the EPA in preparing the second draft of the framework supports the finding that the use of waste-derived feedstocks and certain forest-derived industrial byproducts are likely to have minimal or no net atmospheric contributions of biogenic CO2 emissions. Rather, the use of those materials may even reduce such impacts when compared to the alternate fate of disposal. “The EPA intends to apply this preliminary finding further with the policy contexts and regulatory actions described below,” wrote McCabe.

 “While we continue the development of the Framework to reflect ongoing technical and scientific work, we believe that our approach to the treatment of biomass in the CPP and PSD program should be determined by policy and programmatic objectives, goals and considerations, based on and supported by technical information – an outlook that the SAB peer reviewers acknowledged in their review of the initial draft Framework,” McCabe wrote. “In light of those considerations, we believe that it is appropriate for the EPA to take additional actions to implement the policies described below in the CPP and the PSD program in parallel with our intended further work on the Framework.”

“In the implementation of the CPP, the EPA anticipates that some states will wish to include the use of biogenic feedstocks in their compliance plans. When considering state compliance plans, the Agency expects to recognize the biogenic C02 emissions and climate policy benefits of waste-derived and certain forest-derived industrial byproduct feedstocks, based on the conclusions supported by a variety of technical studies, including the revised Framework,” McCabe continued. “In addition, given the importance of sustainable land management in achieving the carbon reduction goals of the President’s Climate Action Plan, the EPA expects that states’ reliance specifically on sustainably-derived agricultural- and forest-derived feedstocks may also be an approvable element of their compliance plans. This approach is consistent with the EPA’s recognition in the proposal that every state has different energy systems and available fuel mixes. Many states already recognize the importance of forests and other lands for climate resilience and mitigation, and have developed a variety of sustainable forestry and land use management policies and programs to address these concerns. Some states also encourage participation in sustainable forest management programs developed by third-party forestry and/or environmental entities.”

According to McCabe, the EPA will evaluate the biogenic components of proposed state plans as part of the compliance plan review and approval process, and will provide clarification as needed on the basis on which it will make such biomass-related evaluations.
McCabe also indicated the EPA plans to propose revisions to the PSD rules to include an exemption from the best available control technology (BACT) requirement for GHGs from waste-derived feedstocks and from non-waste biogenic feedstocks derived from sustainable forest or agricultural practices. For waste-derived feedstocks, McCabe said the EPA intends to propose exempting biogenic CO2 emissions from GHG BACT analyses based on the rationale that those emissions are likely to have minimal or no net atmospheric contributions of biogenic CO2 emissions when compared with an alternate fate of disposal. For sustainable non-waste feedstocks, McCabe said the EPA intends to propose exempting biogenic emissions from GHG BACT analyses if the applicant can demonstrate that these feedstocks come from sustainably managed lands. For all other biogenic feedstsocks, the memo indicates the EPA intends to propose biogenic CO2 emissions would remain subject to the GHG BACT requirement at this time. According to McCabe, the EPA also anticipates providing additional guidance to sources undergoing BACT analyses involving biogenic feedstocks.

Within the memo, McCabe also noted the EPA is working through the legal process to respond to the Supreme Court’s decision in Utility Air Regulatory Group v. EPA and the current proceedings in appeals court. “When developing the PSD regulations described above, the EPA intends to consider the outcome of this process and coordinate its PSD regulations specific to biogenic C02 emissions with other rule revisions that may be necessary to address application of PSD permitting requirements to GHGs. Our goal would also be to enable permitting authorities and sources to implement the permitting requirements in a practical manner that is consistent with the policy objectives articulated above for the CPP,” McCabe wrote.

The memo also specifies that a second round of targeted peer review through the SAB will begin this month. That review will include public comment.

Full copies of the revised framework and McCabe memo can be downloaded from the EPA’s Climate Change website.

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LA County adopts sustainable waste management roadmap

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By Katie Fletcher from Biomass Magazine

On Oct. 21, the Los Angeles County Board of Supervisors unanimously voted to adopt a Roadmap to a Sustainable Waste Management Future. This roadmap has been developed by the L.A. County Department of Public Works in coordination with several other entities since April. The roadmap lays out a general framework for strategies and initiatives aimed at decreasing reliance on landfills in the Los Angeles County region.
“We are currently drafting implementation plans for those initiatives identified as our first priorities in the roadmap, including an Organics Management Plan,” said Bob Spencer, chief of public affairs at L.A. County Department of Public Works.
The four strategies set forth in the roadmap are programs and services, measuring results, facilities and infrastructure, and outreach and education. Currently about 2.8 million tons of trash is generated annually in the unincorporated communities of the county, approximately 70 percent of which is diverted from disposal through a number of existing waste reduction, reuse and recycling programs.
Landmark environmental laws have significantly impacted this waste management system. These include, Assembly Bill 32, California’s landmark greenhouse gas reduction law, and AB 341, which requires 75 percent of waste generated in California to be source reduced, recycled or composted by 2020. By 2025 the county has the long-term disposal reduction target of 80 percent, and by 2045 the goal is 95 percent or more, which is equivalent to disposing of no more than 0.75 pounds of waste per person per day.
Another piece of impactful legislation is AB 1826, which requires a business that generates a certain threshold of organic waste per week to separate the organic waste to divert it from landfills by processing it another way.
One of these processing options is anaerobic digestion. There are currently no AD facilities in L.A. County that are open to the public. One of the challenges is siting, primarily due to permitting regulations and ensuring favorable economics, but legislation like AB 1826 can help overcome these challenges.
Two other pieces of related California Legislation the Governor signed into law this year, include Senate Bill 498, which provides equity for biomass conversion projects that use noncombustion technologies to make energy or fuel from biomass waste, and AB 1594, which phases out the diversion credit for green waste used as alternative daily cover at landfills in California.
According to the California Energy Commission, there are 22 digesters and 27 thermal biomass facilities in the state. “For materials that are not reduced, reused or recycled, conversion technologies, including anaerobic digestion, are important options for recovering energy, fuels, chemicals and other useful products from materials that might otherwise be disposed,” Spencer said. “The roadmap includes program and policy options that can help promote these environmentally preferable alternatives for reducing landfill disposal.”
An initial assessment was conducted by the working group that prepared the roadmap that showed the county as a whole will need as many as 35 facilities the size of the digester in San Jose, a 250 ton-per-day facility, in order to manage the organic waste in L.A. County currently being sent to landfills.
Locations of 16 proposed conversion technologies sites are identified for L.A. County. One project is proposed to be located in the City of Carson at the Joint Water Pollution Control Plant owned by the County Sanitation District. CSD and Waste Management have partnered on the proposed project to roll out a food waste digestion project at the plant. The project began as a pilot project utilizing CSD’s existing wastewater treatment digesters and 84 tons per day of preconsumer food waste supplied by WM. After two to three years of demonstration, CSD and WM will determine if continued partnership will be pursued. Another potential AD opportunity for organic waste management is being explored at the City of Avalon’s Pebbly Beach Landfill on Catalina Island. The City of Avalon is currently pursuing a major renovation of their wastewater treatment system and secondary water supply system. AD could be part of this new system. The city has yet to make a decision regarding the development of a Request for Proposal for a small conversion technology facility at the landfill.
“The roadmap provides a lot of advantages in organizing an approach to shifting our waste management system towards a sustainable future,” Spencer said. “We have made many great strides in advancing waste reduction, recycling and other diversion practices, and this roadmap will build on those successes. The key challenges are effectively communicating the roadmap strategies, ensuring buy in as the roadmap is implemented and directing the right resources to make the effort a success.”
The “Roadmap to a Sustainable Waste Management Future” can be found here

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Perfect Storm for a Pellet and Firewood Shortage

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By John Ackerly | November 01, 2014

From Biomass Magazine

As winter approaches, the groundwork is being laid for a perfect storm of unprecedented firewood shortages in the Northeast and Great Lake states.

As winter approaches, the groundwork is being laid for a perfect storm of unprecedented firewood shortages in the Northeast and Great Lake states.  This may result in the impression that biomass is taxing our forests too heavily, when it’s almost entirely due to other factors.

Like last year’s pellet “shortage,” this year’s shortages are mostly a supply chain issue.  Industry has been waiting for the consumers, and now that they’re here, is playing catch-up. As far south as Maryland, people couldn’t even find pellets in late September.

So far, coverage of the firewood shortage has been good, and scores of articles typically cite the causes as: last year’s cold winter, a wet spring and summer kept loggers out of the woods, a declining number of loggers, competition with other biomass users, new restrictions from transporting wood over state lines to combat invasive species, and more people heating with wood and and pellets.

There is one thing none of the articles mention: the shortage is likely to result in far more smoke because more people will be using unseasoned wood. The shortage began as a shortage of seasoned wood.  Now it’s a shortage of any wood.

Also, coverage rarely mentions that about half of American homes that heat with cordwood—5 million—obtain their own wood and will not be affected by this shortage.

The real seasoned wood heaters have a two-year supply of wood in storage, because even wood purchased in the spring is not necessarily ready in the late fall.  It’s many of the people new to heating with wood who are the least prepared this winter and don’t have enough seasoned wood.

If we have another cold winter like last year, this shortage will be far worse than it’s already shaping up to be. And if there is also another pellet shortage, it may shake the confidence of potential wood and pellet stove customers and lead to more concern over how the U.S. can sell millions of tons of pellets to heat European homes instead of serving the American market.  Generous European subsidies, particularly in the U.K., make pellets an economical choice to make electricity at only 30 percent efficiency, instead of using this resource at 70 to 80 percent efficiency for heat.

The market is definitely giving signals that higher demand for both pellets and cordwood is not just short-term. More pellet mills are being built, and hopefully, more customers will learn to order early in the year. Pellet mills are making sure to first take care of their bulk customers: residential, commercial and institutional.  What’s left over gets bagged.

The cordwood industry is, for better or worse, incredibly decentralized and unregulated.  Each state has hundreds of retailers who source wood from a variety of ways, some buying it and others cutting it themselves.  This shortage could help expand operations that kiln-dry wood and sell by the cord, not just in small, shrink-wrapped bundles. Operations with robust kilns that can get green wood one week and deliver it seasoned the next week command $400 and higher, instead of the normal $225 to $275 per cord.  Regardless, this winter, normal prices will move moving upwards of $300 for any cord of wood.
 Unlike most cordwood, kiln-dried wood can cross state lines or be transported further than 50 miles, as long as it’s dried to federal specifications that assure all bugs are killed.  Kiln drying operations are much more common in Europe. Expansion in the U.S. would be a great way to ensure more of our firewood supply is properly split and seasoned, resulting in higher efficiency and lower emissions.

While Maryland is already experiencing a pellet shortage, there is no firewood shortage here, or in many major suburban areas outside of the northern Snow Belt. In fact, there is still a slew of free, precut firewood from tree cutting companies, some that will deliver it for free. One company just posted a big, permanent sign advertising “free firewood” on a major thoroughfare, and several local tree trimmers drop cords of unsplit, 18-inch pieces there every month.  I often drive by and am tempted to grab it, but my wife reminds me that we already have two years of seasoned wood out back.

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Maintaining Industry Stability

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By Bill Bell | November 02, 2014 from Biomass Magazine

All looks good for Maine’s pellet industry. Spurred by $5,000-per-unit consumer rebates from the state’s Efficiency Maine energy agency, pellet boiler firms are installing at a combined rate of one unit per day.
“Girl, we couldn’t get much higher…”  (Light My Fire, The Doors, 1967.)

All looks good for Maine’s pellet industry. Spurred by $5,000-per-unit consumer rebates from the state’s Efficiency Maine energy agency, pellet boiler firms are installing at a combined rate of one unit per day. These firms’ annual sales targets are being met or exceeded; in one instance, amounting to a doubling of sales over an already robust 2013. The Pine Tree State’s four pellet manufacturers are running all-out and are having to turn down requests. Consumers visiting industry booths at the state’s large fall fairs are much more informed about pellet heat than in previous years. Clearly, the corner is being turned. And yet…

“We need to maintain stability in the boiler rebate program,” says Jacob Roberson, partner in Portland-based Interphase Energy, which imports and distributes Kedel boilers from Denmark. “We’re nowhere near critical mass.”

“As we displace existing technologies, we’re going to get more and more pushback from our competitors,” warns Les Otten, founding partner of Maine Energy Systems, which, in the ski town of Bethel, assembles and distributes Austria’s OkoFEN boilers from New England to Alaska.

 
The Efficiency Maine boiler rebate program is scheduled to stay on track, at least through the budget year ending June 2015. This program is an outstanding example of what a state agency can do when it decides not to act like a state agency. Under Executive Director Mike Stoddard, the overriding priority has clearly been to get insulation, weather sealing, and better heating and lighting equipment into Maine homes and business firms, and the agency has operated like an aggressive retailer rather than a bureaucracy. Partnerships with private sector contractors have been emphasized, and the agency has aggressively branded itself with Maine’s public.

Boiler firms also serving the New Hampshire market note that, despite a rebate program slightly higher than Maine’s ($6,000 per unit as opposed to $5,000), “the equipment isn’t exactly flying off the shelves over here.” The variable? The New Hampshire program is conducted through a finely tuned regulatory agency, the state’s Public Utility Commission, which lacks the promotion capacity and pizzazz exhibited by Efficiency Maine.

But what about the “pushback” of which Otten warns? He names three areas that competitors to pellet heat are likely to cite, one being alleged depletion of Maine’s forest resource. While Maine is the most forested state in the U.S., this is not readily apparent to mall shoppers in the southern part of the state. Maine’s industry may need to publicize the fact that virtually all of the wood going into pellets is from certified sustainably managed woodlands, where trees are actually growing faster than they are harvested.

The second potential objection to the expansion of pellet heat, alleged air pollution, is equally bogus. Maine’s industry will be exploring a partnership with American Lung Association of Maine, whereby homeowners are encouraged to swap out aging cordwood stoves—the real cause of woodburning air pollution—for EPA-approved wood and pellet stoves. This should help to get across the point about the high-intensity burn, low-particulate matter characteristic of pellet heat.

The third issue, “Will there be a ready supply of pellets?” poses a challenge.  There is adequate capacity among Maine’s four pellet manufacturers. Lacking, however, is foresight among pellet retailers, particularly the Big Box stores, whose conservatism in placing orders in 2013 led to empty pallets when the Maine winter turned out to be as long and cold as, well, Maine winters used to be. While the chains have reportedly upped their orders this year, small retailers who only just recently have decided to add bagged pellets to their merchandise are being put on waitlists or simply turned away.

Bulk delivery customers will all be served, and the supply side of market will find ways to respond to increased demand for bagged product. The pellet mill in Corinth will be coming back on line after undergoing—via new ownership—some significant equipment upgrades, and the mill in Athens will be expanding production as part of a huge project to generate its own electricity.

The future remains bright, so bright that we’re still wearing shades.

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CRDC announces grant for biomass-fueled district heating system

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By Capital Regional Development Council | October 30, 2014

Capital Regional Development Council is pleased to announce they have been awarded a $250,000 grant from the U.S. Forest Service to support the development of a wood-fired district heating system in Claremont, New Hampshire.  The Forest Service program is designed to support the use of wood energy which will promote sound forest management, expand regional economics and create new rural jobs.
The Claremont wood energy district heating project being developed by New Hampshire-based energy development company, HotZero, will connect downtown buildings with an efficient hot water heating system using biomass wood as its fuel source.  It is expected that participating building owners will realize significant savings in heating costs without the need to use scarce capital and building space to install separate biomass systems.
CRDC Loan Officer Elizabeth Sweeney said, “This grant award is an important economic development resource for the Claremont area.  Finding ways to take control of energy costs, while using nearby resources offers some of the tools we need in communities like Claremont.”  Sweeney added, “While many parts of the northeast are seeing energy cost reductions related to low natural gas prices, communities like Claremont that do not have access to natural gas run the risk of being left behind.  Projects like this hot water district heating system helps level the playing field.  The fact that the fuel procurement will mean more jobs in the local forest products industry strengthens the economics of the project.”
The grant dollars will be used to complete engineering for the project.  It is expected that the first phases of the district heating system will be operational in late 2015.  Initially, the project will focus on the Opera Square section of downtown, but is designed to scale-up over time to connect other sections of the city.
HotZero Founding Director Dick Henry said, “We are looking forward to working with CRDC to make this innovative project a reality for the City of Claremont. This nationwide grant was very competitive.  So, we feel the validation this project has received from the U.S. Forest Service is an important step forward – not only for this project, but for the future of wood-powered hot water district heating systems in the region.”

Addressing High Pellet Demand

From Pellet Fuels Institute

This document is intended to help all involved in the wood pellet industry communicate about supply issues that can sometimes occur during times of great demand. Below are several major factors with supporting points, but the three main points to emphasize include:
    1.    Consumers should keep buying pellets – but slow and steady is key. Urge consumers NOT to “stock up” for the entire winter; simply buying enough for a week or a month will help producers and retailers ensure a steady supply.
    2.    The pellet industry is doing everything it can to keep up with the high demand. We are working together to ensure that regions with high product volumes are able to help supply regions with lower volumes.
    3.    Use Pellet Fuels Institute as a resource for news on this subject, and to check for fuel availability.
Weather conditions have an enormous impact on the demand for pellets.
    •    It might sound obvious, but a longer- or colder-than-normal winter can dramatically drive up demand for pellet fuels–just like other heating fuels–beyond production capacity for some producers.
    •    Winter 2013-2014 was an especially long and cold winter, with many areas of the Northeast still experiencing freezing conditions well into April or even May.
    •    In early forecasts, winter 2014-2015 was projected to be similarly cold (although some forecasts have been adjusted recently to reflect warmer trends).
    •    However, there are signs that this winter will not be as severe as last winter. As of October 7, 2014, the U.S. Energy Information Administration (EIA) adjusted its Winter Fuels Outlook to reflect the National Oceanic and Atmospheric Administration’s (NOAA) revised winter prediction with warmer temperatures than previously expected. The report also indicates that consumers will utilize and spend less on natural gas and electricity in the coming heating season. 
The pellet fuels industry varies significantly from region to region, but works together to meet overall demand.
    •    Just like the weather varies from region to region, so does the pellet industry. Part of this is due to the types of feedstock that are available in different parts of North America – hardwood vs. softwood lumber.
    •    Under normal conditions, consumers purchase pellets that are sourced locally in most cases.
    •    In some areas of the Midwest, an unseasonably wet spring delayed access to wood fiber in the 
forest products supply chain, causing planned sources of cost effective fiber for making pellets 
more challenging to obtain than projected 3-6 months prior.
    •    Weather conditions in different parts of the continent can have an impact, as one area has a 
larger demand and another area has a larger supply on hand. Right now, there is high demand in the Northeast and high supply in the West. Some retailers and producers are working together to ship excess fuels to places that are at risk of running low. These partnerships will continue for the entire season.
    •    Many pellet producers are small to mid-size, local businesses that are adjusting to keep up with quick demand changes. It takes time to build out the infrastructure and train employees
to ramp up production, as well as access fiber supplies needed, which many times require long term commitments. These businesses must use caution while growing, because a season or two that are warmer than normal can have an adverse effect when end-users no longer commit to similar pellet volumes.
More Americans than ever before are turning to pellet fuels as a primary or supplementary method of heating their homes and businesses.
    •    At last count, well over one million homes across the country had installed pellet-fueled heating appliances, and roughly 2.5 million homes heated primarily with wood.
    •    Wood heating is projected to grow the fastest for the 2014-15 winter compared to other heating fuels; more than electricity, natural gas, and propane. As the industry grows, it will become better able to respond to these types of conditions. 
Pellet fuels remain a cost effective way to heat homes, particularly in the areas that are primarily electric, fuel oil and propane.
    •    The cost of pellets for home heating is considerably less expensive than heating with electricity, and comparable to slightly less expensive than heating with fuel oil or other fossil fuels. This helps explain the seemingly sudden popularity of pellets for home heating.
    •    According to the New Hampshire Office of Energy and Planning, wood pellet prices for 2014 are comparable to those of natural gas and cordwood. These three fuels cost less than half the price of kerosene and propane, and about a third the price of electricity. 
Here’s how consumers can help:
    •    Continue purchasing pellets!
    •    But it’s important not to panic. If too many people “stock up” with unnaturally large amounts, 
retailers and producers will have a hard time keeping up with the demand.
    •    Slow and steady is the way to go. Purchase pellets only for the next month or week. This will 
help ensure that there’s enough to go around, and that producers are able to keep up with the demand. In the event that this winter is warmer than has been projected, this will prevent an “overstock” of pellets sitting in a garage or tank waiting to be used.
    •    Look for highly efficient pellet appliances, which will allow the fuel to last longer.
    •    If you absolutely must “stock up” on pellets, the best time to do that is between April and July. 
Here’s how retailers can help:
    •    Make sure you are in communication with your producers about the volumes of demand you are experiencing well in advance of need.
    •    If possible, reach out to your producer contacts in other regions to see if there is excess supply you can order.
    •    Above all, make sure consumers are aware that the pellet industry is doing its best to address the situation. Emphasize that there will be enough to go around and to continue with the slow and steady purchase of pellets. 
Use the Pellet Fuels Institute as a resource for information relating to pellet fuels availability.
    •    We are in touch with pellet producers and retailers daily and can answer questions, or help direct inquiries to the right person. We will also periodically update the media on fuels availability, and post recent statements to the press section of our website.
    •    Check our website’s fuel availability page to see which pellet producers have excess product available for purchase.