Conference Addresses Burning Questions
About 240 pellet fuel industry stakeholders gathered at the Sawgrass Marriott in Ponte Vedra Beach, Fla., this summer to network and gain a stronger grip on the pertinent issues impacting their industry.
The Pellet Fuels Institute Annual Conference provided a venue to discuss pellet plant safety, fire prevention, government affairs, plant optimization, and the ongoing development of PFI’s third-party verification standards system, among other topics. And of course, golf enthusiasts got a chance to play the famous TPC Sawgrass course, just a short jaunt from the PGA Tour headquarters.
But getting down to business, the U.S., despite being years behind Europe in the commercial and industrial use of pellets for heating and power, is still under that continent's watchful eye. Players in Europe’s better-developed pellet markets are still interested in what the U.S. has to offer, curious about fiber and shipping costs. Some are looking for opportunities to build plants here, but their interest could also be yet another indication of the potential for pellet exports from U.S. producers.
The pellet export market is in for a wild ride in the next 10 years, and Harold Arnold, president and CEO of Georgia-based Fram Renewable Fuels LLC, recommended industry stakeholders hold on to their hats.
“The industry will see wild growth over the next few years,” he told conference attendees. “Expect the unexpected. For some, these changes will be good; for some, they’ll be bad, but either way, we’re in for a wild ride.”
Fram Renewable Fuels operates a 230,000-metric-ton pellet mill that uses about 460,000 metric tons of raw materials. Drawing from his export experience and observations, Arnold said the 2011 export market has been stronger than usual. That strength could be influenced by extreme cold in the Baltics and resulting difficulties in exporting from Estonia. Spot sales, however, are a different story and pricing is an ongoing struggle, he said, even though demand continues.
Arnold referred to a Pöyry study that estimates current worldwide demand for pellets at 16 million metric tons, but he added that the number is one of the more conservative. Not surprisingly, Western Europe dominates current use, but markets are growing in Asia. That doesn’t necessarily mean, though, that all Asian countries will begin to import massive amounts of pellets. Instead, it is likely that some, such as China, will use primarily their own materials, according to Arnold.
Global capacity is around 32 million metric tons, and both global production and demand are expected to grow. Still, that doesn’t mean all pellet mills will enter the export sector. “Many facilities may never get into exporting because of logistics,” Arnold said. He refers to logistics as “the great equalizer,” citing problems encountered in the U.S., such as a lack of discounts, few suitable ports and limited port storage.
Europe is a policy-driven market, fellow speaker Seth Walker, associate economist in timber and bioenergy for RISI, told attendees, and 75 percent of demand could come from the U.K. alone in the next few years. The growing European market opens up an enormous window of opportunity for pellet producers in the Southern U.S. That region is the largest timber producer in the world, Walker said, and also has port availability and a close proximity to Europe, relative to other regions of the world.
The final speaker on the panel, Joanne Littlefair, international trade specialist with the U.S.
Department of Commerce, discussed three main goals of the department related to exporting: trade advocacy and promotion, access to financing, and reducing trade barriers and enforcing trade laws.
The department has 107 global U.S. Export Assistance centers to promote trade and answer questions producers may have, Littlefair said. Reducing trade barriers and enforcing trade laws is crucial, she emphasized, to ensure that global export market participants are “playing by the rules.”
And as always, financing is a vital aspect of exporting and Littlefair named a few helpful programs the Department of Commerce operates, including Export Express loans, the Export Working Capital Program, and the International Trade Loan Platform. Littlefair also mentioned the Export-Import Bank, and the financial assistance it can offer.
An important new export market development Arnold emphasized is the European standards expected to come out within the next year. As sustainability is a growing concern for European Union utilities, a buyers group is currently working to develop a sustainability certification program. Arnold recommended that pellet manufacturers looking to export plan how they source, track and certify their pellet fuel.
A Standards Update
In forming its standards, PFI will keep a close eye on the European standards, leaving as few gaps and discrepancies as possible in the major areas, according to John Crouch, PFI’s director of public affairs. And the process hasn’t come without an enormous amount of work.
When speaker Chris Wiberg, co-chair of PFI’s Standards Committee, was introduced it was said that he has spent thousands of hours on the ongoing project. Taking the stage, Wiberg, who currently manages the Biomass Energy Laboratory in Conyers, Ga., said he wished it were an exaggeration.
During his presentation, Wiberg outlined changes to the standards that have come about since their initial draft release in October 2010. That draft outlines three fuel grades: premium, standard and utility. It specifies parameters for a number of properties including ash content, diameter, durability, fines, moisture and chloride content, among others.
But perhaps the most important aspect of the system is the third-party audit of those parameters. PFI proposes a three-level verification system, beginning with the pellet mill itself. The second verification comes from on-site visits by inspectors who are well-versed in the timber industry, doing other forest product inspections such as lumber grading. Finally, the inspectors’ assessments will be audited by the accreditation body, which Wiberg announced at the annual conference will be the American Lumber Standard Committee. “I’m feeling confident that they are the right body,” he said. The internationally recognized group is experienced in such dealings, he told conference attendees, and already accredits several auditing agencies.
Also, internal laboratories at mills are no longer required, he announced, the standards specification document has been restructured, and the inspection and re-inspection criteria have been altered. Now, a product must be within 95 percent compliance for grade qualification.
Undoubtedly, pellet producers will wonder how much it will cost them to comply, but Wiberg said it will differ mill by mill. Influential factors include the PFI enrollment and operations fee, internal lab quality assessment and quality control program development, third-party lab and testing services, auditing services and ALSC’s cost to administer the program. Roughly, though, Wiberg estimated it will cost 50 to 70 cents per ton.
The last portion of the conference was a four-hour symposium detailing the standards and compliance for pellet manufacturers. Eventually, PFI hopes that the standards will be adopted by appliance manufacturers who will outline the use of certain grades and void warranties where the specifications aren’t followed.
In the future, the standards committee will finalize the language in the formal agreement with ALCS; and ALCS and PFI boards will need to review, approve and sign the agreement. With such involved process steps still on the horizon, a timeline for the release and implementation of the standards is hard to nail down.
Optimization and Efficiency
Besides broad industry topics such as standards and export markets, the conference also touched on more specialized areas such as individual pellet plant efficiency and optimization, crucial factors that received input from two speakers. Plant optimization and efficiency can hinge on multiple factors, not the least of which being raw material variances and the use of proper machinery.
In his 30-minute presentation, Clyde Stearns, vice president of engineering for Zilkha Biomass Energy and biomass and wood pelleting expert for equipment manufacturer Buhler Inc., emphasized minimizing raw material variance. “You have to have really intimate knowledge of your raw material,” he said. Showing a map of the U.S. and the varying available wood types, he explained, “The U.S. is not homogenous at all for wood species.” The external selection of raw material is important, making it crucial for a pellet company to understand the different types of wood it will use, and what form it will be in.
Subsequently, internal homogenization requires constant material supply characteristics. Stearns included in his presentation a fact-versus-fiction element of pelleting, saying that contrary to popular belief, a complicated and expensive mixing system is not essential in a mixed-species wood pellet plant. A basic system is sufficient, he assured, but chip size and variance need to be relatively uniform.
He also addressed minimizing moisture and equalization in a pellet mill, discussing drying time and predrying. “In an ideal world, I would recommend covered chip storage,” he said. “If that can be done, it dramatically improves the drying operation.”
Stearns also discussed wet material sizing, complemented later by the presenter who followed him. Cole Martin, sales manager at Dieffenbacher Inc., described the company’s two new sizing technologies being used in Europe today.
The first, The Eco Pulser, is a noncontact sizing machine that uses shock waves designed to minimize the wood size, he said. The material is fed into the machine through the middle, and into the counter-rotating motors. Any sand, stone or similar material is powdered, and contaminants such as plastics and metals are detected through frequencies within the process and released for disposal. The system, which has installations in Germany, uses less power than traditional sizing equipment, emits no pollutants and makes little noise, he said. The Eco Pulser, however, is not for absolute sizing.
Dieffenbacher’s ClassiSizer is a better fit for that. While it is an impact sizer, it uses no hammers, knives or flakers, Martin said. The system has been used in wood chip processing and residential wood processing and is breaking into the pellet mill market with one installation a
lready and another in the near future. “It’s used in a number of different industries,” Martin said.
Because there is no cutting of the chips, the system experiences little wear. It is also insensitive to contaminants and is low maintenance. It functions through a rotor that throws the wood at a screen, Martin explained. Some goes through and is sized, while other material comes back to be thrown again. The process requires half the energy of a traditional hammermill and can handle frozen material.
The presentations were crucial for prospective pellet manufacturers, as they offered an overview of efficiency factors, as well as an explanation of the equipment that can enhance them.
Overall, attendance at the conference was similar to past years, and offered well-balanced content and extensive networking opportunities, according to Jennifer Hedrick, PFI’s executive director. “We were quite pleased,” she said. “From the staff perspective and from the comments we received from members alike, [there was] a lot of feedback on the balance of the conference.” The program’s “nuts and bolts” aspects in topics such as plant safety nicely complemented the big picture topics regarding industry status, she said. “People really want to know that type of information.”
Attendees also appreciated the networking opportunities such events offer, to bolster business. “People really use this as a place of business to grow and develop,” Hedrick said. “This provides an opportunity for that.”
For more information on the conference and speakers, visit the PFI website: www.
Author: Lisa Gibson
Associate Editor, Pellet Mill Magazine