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Global Industrial Wood Pellet Demand Forecast and U.S. Wood Bioenergy Update: Q3 2017

This post includes an excerpt from the bioenergy research authored by Amanda Lang and Andrew Copley published in the Q3 2017 Forisk Research Quarterly (FRQ) Publication.

Forisk projects global demand for industrial wood pellets to grow at an annual compound rate of 15% for the next five years and then stabilize at 27.5 million metric tons.

Forisk updated our projection of global demand for industrial wood pellets in the Q3 2017 FRQ. The projection is a ground up approach based on announced power plant conversion projects. The largest projected increases are expected in Asia due to demand for industrial wood pellets in South Korea and Japan. Despite these increases, Europe will continue to dominate the industrial wood pellet market, accounting for 73% of total demand by 2021. The UK will continue to be the largest importer, with demand expected to increase 3.3 million metric tons by 2021. Though Drax essentially comprises all of the UK’s current demand for industrial pellets, two additional companies will convert power plants from coal to wood pellets within the next five years —Lynemouth (420 MW, 1.6 million metric tons) and MGT Teeside (299 MW, 1.2 million metric tons).  Refer to the “Forisk Facts and Figures” in the Q3 FRQ for more detail by country.

The UK remains the largest importer of U.S. wood pellets, purchasing 80% of U.S. exports through May 2017. With 275 thousand metric tons of volume, Belgium was the second largest importer of U.S wood pellets. The U.S. is on pace to export 4.8 million metric tons in 2017. While U.S. wood pellet exports overall were 5.5% higher year-over-year through May 2017, exports to the UK were down 6.2%.

Forisk analysis suggests wood use for viable bioenergy projects in the U.S. will be 77.9 million tons per year by 2026.

As of July 2017, Forisk’s wood bioenergy database tracks 438 operating and announced projects, up from 436 projects in April 2017. These projects represent potential wood use of 113.3 million tons per year by 2026. Based on Forisk’s analysis, 297 projects pass basic viability screening, indicating potential wood use of 77.9 million tons per year, up 0.6% from the April 2017 estimate. The figure below details estimated wood use by bioenergy projects in the United States that pass viability screens for technology and project development through 2026.

To download the most recent Wood Bioenergy Summary, click here.

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