US plants selling wood pellets to Europe for power generation, home heating

 The West produced and sold the least tonnage, with almost all going to domestic heating market

During the first half of 2016, US manufacturers produced approximately 3.3 million tons of wood pellets and sold 3.1 million tons, mostly to foreign markets, according to data from EIA’s newly released Densified Biomass Fuel Report.

Wood pellet fuel, also known as densified biomass fuel, is used for electric power generation and for domestic heating needs.

About 85 per cent of raw materials for biomass pellets come from wood waste streams such as logging residues, sawmill residues, and wood product manufacturing residue. Roundwood timber—generally logs harvested for industrial use—account for about 15 per cent of raw materials.

EIA’s new survey collects data from manufacturers of densified biomass fuels, primarily wood pellets. The new survey began collection in Jan. 2016 with data from about 120 planned and operational densified biomass manufacturing facilities in the United States.

These facilities have the capacity to produce a total of 11.4 million tons of densified biomass annually.

Utility-grade wood pellets used by electric utilities account for more than 75 per cent of total wood pellet production.

The remainder is mostly premium-grade pellets used for heating in the residential and commercial sectors. Utility-grade pellets generally have higher ash content than premium pellets.

Premium pellets with lower ash content and higher heating values are better suited to heating applications where use of pellets with high ash content might have adverse impacts on wood pellet stoves and air quality.

During the first half of 2016, about 82 per cent of pellet sales were utility pellets in the export market, of which more than 85 per cent were sold to the United Kingdom’s Drax power plant.

The remaining 18 per cent of pellet sales were sold in the United States. Domestic sales of heating pellets are driven by winter heating demand and wood’s price competitiveness with fossil fuels.

During winter 2015-16, prices for heating oil, propane, and natural gas were relatively low, reducing wood’s price competitiveness. State policies also play a role in wood pellet sales.

Some northeastern states have promoted switching from heating oil to biomass to improve local economies and to address growing concerns related to greenhouse gas emissions.

From Jan. through June 2016, the South produced most of the utility-grade wood pellets. The East produced about one-fourth as many pellets as the South during the same period, all of which was sold in the domestic heating market.

The West produced and sold the least tonnage, with almost all going to domestic heating market.