Federal export initiative targets wood pellets and chips

By | December 09, 2010

A recent government report has targeted wood pellets as one of the most promising export markets for U.S. companies, and has indicated that the USDA will expand its annual report on biofuels to include analysis on biomass in the form of wood pellets and chips in relevant countries, to provide the U.S. industry and policymakers with information on the sector’s growth, export opportunities in emerging markets and policy updates.

The report is a result of the Renewable Energy and Energy Efficiency Export Initiative, a coordinated effort to promote renewable energy and energy efficiency exports in the U.S. Seven federal agencies, including the U.S. DOE and Department of Commerce, are collaborating on the program, which is part of President Obama’s National Export Initiative.

The NEI is divided into two parts—assessing current competitiveness of U.S. renewable energy and energy efficiency goods and services, and developing an action plan of new commitments that facilitate private-sector efforts to significantly increase U.S. renewable energy and energy efficiency exports within five years.

According to the RE&EE report, biomass equipment and feedstock exports from 2007 to 2009 were about twice the amount of imports. The U.S. exported $176.4 million in biomass energy equipment and feedstock in 2009, with an annual average growth of 54 percent between 2007 and 2009. Imports during the same period were $349.2 million worth of biomass equipment, with an average annual import growth of 28 percent.

The report goes on to recognize that  several countries are expanding their use of biomass for power, either by building biomass-specific power plants or by co-firing biomass in existing coal-based power plants. “Many European countries already obtain a substantial portion of their electricity from biomass, most notably Sweden, which produced more energy from biomass than from oil in 2009,” it stated. “Several developing countries have recently developed biomass power capacity, including Brazil, Costa Rica, India and Mexico, but developing countries that consume biomass resources often use their own domestic resources rather than import feedstock from the U.S.”

The U.S. currently exports wood pellets and wood chips to Europe for co-firing in existing coal plants, and as more countries enact carbon reduction requirements, co-firing could become increasingly common, the report says.  Future exports in the biomass industry are likely to be in the form of consulting, engineering, procurement and financial services, all industries in which the U.S. is likely to remain competitive. In addition, U.S. companies should find relevant export opportunities in countries with little available feedstock or without a local biomass industry, particularly if strong government policy in those countries supports the use of biomass for power.

For more on the Renewable Energy and Energy Efficiency Export Initiative, visit http://export.gov/reee/.