India is an important trade partner of Canada, and although in its infancy, the time is ripe for further investigation into investment opportunities for the Canadian pellet sector.
Why? Because along with the rest of the world India recognizes the need to reduce greenhouse gas emissions and transition to clean energy. India’s growing economy is driving high CO2 emissions, which increased by more than 55 per cent in the last decade and are expected to rise to 50 per cent by 2040. In 2019 alone, India experienced an estimated 1.2 million air pollution-related premature deaths.
India burns approximately 670 million tonnes of coal annually for power generation, but the Government of India (GOI) has recently mandated biomass co-firing in its coal plants, aiming to reduce greenhouse gas emissions and improve air quality for its population of 1.5 billion people. Its ambitious targets included transitioning to seven per cent co-firing by October 2023.
The GOI estimates this action could save 38 million tonnes of carbon dioxide emissions, however, to achieve these goals approximately 96,000 tonnes per day of biomass pellets would be needed. The current capacity in India is approximately 7,000 tonnes per day. Annually, this demand could reach upwards of 35 million tonnes of biomass pellets.
On behalf of the Wood Pellet Association of Canada (WPAC), I recently joined a trade mission to India led by the British Columbia Government’s Forestry Innovation Investment (FII Ltd.) in January. The focus of the trip was to explore business and investment opportunities primarily for B.C.’s forest sector.
With assistance from trade commissioners Kapil Malhotra and Saroj Mishra, based at the Canadian High Commission in Delhi, during the week of January 16, 2023, I met with representatives of the pellet and coal power sectors, including equipment manufacturers, logistics providers, pellet manufacturers, and coal power producers. The meetings were insightful and thought provoking. You can read my full report Challenges, Considerations, and Opportunities for Canadian Pellet Producers here. You can also watch the webinar we recently hosted here or download the presentation here.
In summary, here’s what I learned:
- Agricultural biomass holds potential for coal power plants in India and would reduce crop burning. However, pellets made from agriculture residues tend to have higher ash content along with varying levels of other elements such as chlorine or silica. These elements can create problems of their own, such as corrosion, and fouling and slagging in boilers, but blending the residue with wood pellets can keep undesirable components at acceptable concentration levels.
- Exporting pellets from Canada to India isn’t feasible due to extremely low-price expectations coupled with vast distances and high shipping costs, however, significant opportunity exists in capitalizing on India’s domestic biomass production.
- The huge, largely untapped opportunity lies in the mobilization of a local biomass pellet industry in India, based on agricultural residues as feedstock collected from millions of small farms, which would require construction of large-scale pellet plants.
- Coal power companies appear to be unmotivated by the GOI’s request to enter long-term supply contracts, evidenced by a lack of expertise in mobilizing a large-scale biomass pellet feedstock supply. Still, Indian coal power companies could be willing to consider joint ventures, which would rely on the development of local partnerships to navigate customs regulations and language barriers, critical components of any market expansion into India.
- Carbon capture, utilization, and storage (CCUS) is in its infancy, but represents a significant long-term opportunity for the pellet sector and will be key to achieving India’s greenhouse gas targets and energy needs.
Back here in Canada, it’s clear that both provincial and federal governments are working to accelerate cooperation in deploying green technologies in India and have committed to sending enhanced Team Canada trade missions in priority sectors of mutual interest, such as renewable energy and clean technology.
For Canadian pellet producers, I believe there is both opportunity and challenges—both of which necessitate additional actions:
- Interested potential investors or project developers should discuss the opportunity with representatives of the trade commissioner office in the Canadian High Commission to India in Delhi.
- Developers will need to meet with a greater sample of coal power companies.
- It’s critical to map the location of coal power plants in relation to biomass feedstock supply and to determine the optimum location and size of biomass pellet plants.
- Invest in a second trip to India to investigate the opportunity further.
Overall, the trade mission to India and meetings were informative and highlight some important next steps for WPAC and interested members. Stay tuned for more on this important and emerging market.
To read WPAC’s full report, click here.
Gordon Murray is the executive director of the Wood Pellet Association of Canada.
This article was originally published by Canadian Biomass, a national media brand providing coverage of the emerging biomass, bioenergy and bio-products markets. See CanadianBiomassMagazine.ca for more information.