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The third Argus Biomass Trading Conference on April 19-20 in London was a great way to get caught up on the pellet industry’s latest intelligence and network with many of the major players in the global wood pellet industry.

Argus Media has been providing price assessments, business intelligence and market data for oil, gas and electricity markets since 1970. In 2009, Argus began coverage of biomass, publishing the weekly Argus Biomass Report which includes a wood pellet price index. The annual Argus Biomass Trading Conference has become one of the top European events in the pellet industry.

Attendees included all European power utilities presently co-firing and those planning to, U.S. and European pellet producers, equipment suppliers, trade assocations and more, but no Canadian producers.
The beginning of the conference was largely concerned with estimates of current and future production/consumption, trade flows and likely price trends. Some highlights were:

  • Argus estimated global wood pellet consumption in 2011 at 14.4 million tonnes (Mn T). Europe accounted for 11.4 Mn T.
  • The Argus wood pellet price index showed that the CIF Amsterdam Rotterdam, Antwerp (ARA) price reached a low of 116/T in August 2010, and then rose gradually to peak of 137/T by February 2012. Following the fire at RWE’s Tilbury Power Station, oversupply caused the ARA price to drop to 128/T as of late April.
  • Two price indices track the ARA pellet market – the Argus Index and APX ENDEX. They follow similar trends, but there can be as much as a 5/T difference between them.
  • Jorrit Hachmer of RWE pointed out that wood pellet prices have been remarkably stable. The ARA price as reported by APX ENDEX has stayed within a 10/T range since Q4 2010. As volumes grow, he expects spot trading and the use of derivatives to increase, which will lead to more price volatility.
  • It is expected that European pellet demand will increase to 15 Mn T by 2015 with pellets supplied by: Western Canada (2.1 Mn T), Eastern Canada (0.9 Mn T), Southeast US (8.2 Mn T), Brazil (2 Mn T), Baltics (1 Mn T) and Portugal (0.65 Mn T).
  • Indonesia and Malaysia continue to ship palm kernel shells (PKS) to Europe. But PKS require more handling at the power stations (drying and pulverizing), and are controversial with respect to sustainability.


There was also an important discussion on how environmental groups are increasingly opposed to bioenergy. We must counter those claims because the entire bioenergy industry is based on the dual premises of GHG reduction and sustainability. It is essential that we convince governments and the public to continue supporting bioenergy, because without it, the bioenergy industry could vanish overnight.

A task force has been formed consisting of the European, U.S. and Canadian trade associations, along with power utilities Dong Energy, Drax Power, EON, GDF Suez, RWE and Vattenfall. The task force is collecting all relevant scientific literature regarding bioenergy, and a strategy for effective communication to governments, non-governmental organizations, and the media is under development.

One very important issue that has come to our attention is the European stance on primary forests.

Primary forest means “woodland of native species, where there is no clearly visible indication of human activity and ecological processes are not significantly disturbed.” Both the European Union’s Renewable Energy Directive and the U.K.’s Sustainability Criteria for Solid and Gaseous Biomass Generators prohibit biomass from primary forests. Because a substantial portion of Canada’s working forest is classified as primary forest, we must urgently come to an agreement with the key regulators – the European Commission Directorate General for Energy and the U.K. Office of Gas and Electricity Markets – as to how Canadian biomass is to be treated.

The Argus conference was a great opportunity to gain all the latest intelligence on our industry, and all the European utilities were eager to meet producers. I recommend Canadian pellet producers give this conference serious consideration in 2013.


Originally published in Canadian Biomass - All rights reserved. Gordon Murray is executive director of the Wood Pellet Association of Canada. He encourages all those who want to support and benefit from the growth of the Canadian wood pellet industry to join. Gordon welcomes all comments and can be contacted by telephone at 250-837-8821 or by e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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Safety

WPAC Safety Committee

The Board of Directors has appointed the Safety Committee to manage the safety objectives of the Wood Pellet Association of Canada ("WPAC"). The Safety Committee works in close cooperation with the BC Forest Safety Council.

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Power Generation

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Sustainable power

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