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The Voice of Canada’s growing pellet sector
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The Netherlands (NL) was briefly the world's largest importer of industrial wood pellets for co-firing. Under its former biomass support scheme - Milieukwaliteit van de Elektriciteitsproductie or MEP – wood pellet consumption for co-firing peaked at about 1.5 million tonnes annually. However, from 2012 and 2014, imports declined rapidly and eventually stopped altogether, as power utilities' MEP contracts expired.

Although the Government of the Netherlands (GNL) quickly replaced MEP with a new support scheme known as Stimulering Duurzame Energieproductie or SDE+, biomass co-firing has remained stalled, mainly over sustainability concerns.

On September 6, 2013, GNL announced the Energy Agreement for Sustainable Growth. The Energy Agreement was negotiated by a group of 47 stakeholders including government, environmental organizations, industry, trade unions, and others. Among its 159 measures, the Energy Agreement provides that biomass co-firing should contribute a maximum of 25 petajoules (PJ) annually. This equates to approximately 3.5 million tonnes of pellets. By comparison, co-firing of biomass for electricity generation produced 11.7PJ in 2010, 11.5PJ in 2011 and 10.6PJ in 2012. The Energy Agreement provides that five 1980's era coal power plants will be shut down permanently. When co-firing resumes, it will take place in six newer, more efficient coal power plants.

The Energy Agreement also provides that any biomass eligible for an SDE+ subsidy must be sustainable. On March 18, 2015, the Dutch energy sector and NGOs agreed upon the sustainability criteria for biomass. On March 30, 2015 these requirements were laid down in official Dutch legislation.

The next order of business was for GNL to determine how the energy industry, particularly pellet producers, would demonstrate compliance with the biomass sustainability criteria. This has taken more than a year. The Ministry of Economic Affairs (MEA) developed draft verification procedures, finally making them available on March 29, 2016 for public consultation.

Although Canadian pellet producers are confident in their ability to meet the Dutch biomass sustainability criteria, they are anxious to ensure that when finalized, the GNL's verification procedures will be practical and that they will align with Canadian forest certification and chain-of-custody schemes such as FSC, SFI, and CSA.

The Government of Canada coordinated our national response to the Dutch consultation, including an invitation for representatives of GNL to visit Canada to view wood pellet manufacturing and forest management practices first hand.

From June 27 to 29, four officials from the Government of the Netherlands' Ministry of Economic Affairs visited British Columbia. The GNL participants were: Jon Eikelenstam, program manager, Energy Agreement for Sustainable Growth; Patrick Todd, senior policy advisor, Bio-energy and Energy Subsidies; Sipke Castelein, senior advisor, Sustainable Energy; and Nico Bos, policy officer.
Canadian participants included government officials and representatives from the forest, sawmill, pulp and wood pellet industries.

From Canada's perspective, the purpose of the mission was to present Canada's approach to forest management and allow GNL officials to contrast that with what they saw in the U.S. southeast (MEA visited Virginia and Alabama in fall 2015); showcase the integrated nature of the industry and how wood pellets help to make full use of existing wood product waste streams; and help the MEA better understand the scale and practicalities of the industry in order to better inform their policy development process.

The GNL biomass mission included three days of meetings, mill and other site visits, field visits and networking opportunities in and around Prince George and Vanderhoof.

Topics that garnered the most attention and discussion during the week included:

Features of the GNL SDE+ renewable energy subsidy system:
  • The SDE+ program features a competitive bidding process for subsidy grants; lowest bid wins per amount of energy produced. The government's funding commitment to successful bidders will last for eight years.
  • The GNL decision about continued operation of coal-fired plants is under review. This decision is expected by fall 2016 and will have major implications for the potential NL biomass-to-energy market. Fortunately, GNL sees opportunities for pellets not only in electricity generation, but also in residential, commercial and industrial heating.
  • Forest certification schemes used in Canada and regional prevalence of FSC vs PEFC (SFI and CSA).
  • Forest planning, governance, monitoring and enforcement on public lands, including the division of forest management responsibilities between government and industry.
  • Reforestation of harvested areas, including planting, spacing, stand tending and reaching free-to-grow status.
Industry logistics:
  • How fibre is used, e.g., how logs are transformed into products and what percentage is directed toward lumber, chips, pellets, raw log exports. Transportation of finished and intermediary products, including routes and methods of moving pellets from central B.C. to Europe.
  • Manufacturing technology was discussed in detail. Energy production (co-generation) was featured at the Nechako Lumber Company mill during the tour of their organic rankine cycle equipment and at Canfor's Northwood pulp mill. There was also a visit to the distribution hub for Prince George's downtown district energy system (which uses heat supplied by the Lakeland sawmill).
The GNL delegation remarked on several occasions that they appreciated the transparency shown by the Canadian participants throughout the visit. The delegation gained a good appreciation for the scale of the industry in B.C., the nearly complete utilization of the wood fibre that is harvested and industry's efforts/needs to optimize the value from each log (from higher value sawlogs to pulp and paper chips to wood pellets). The visitors also saw that public versus private land is a fundamental difference between the Canadian and U.S. pellet industries, and that that there is more oversight on activities on public lands.

On June 14, 2016, the MEA published the second draft of their biomass sustainability verification protocol. The adjusted protocol will be field tested, including in Canada, during the summer. The final verification protocol will be published in October 2016.

WPAC gratefully acknowledges the efforts of Dave Patterson of Forestry Innovation Investment and Wendy Vasbinder of Natural Resources Canada for helping to bring our Dutch vistors to Canada and for arranging an excellent program.

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