After a relatively quiet summer for bioenergy announcements, wood pellet expansion plans have begun to make the news again. Momentum began building mid-August in the Southeast and movement in the rest of the country has begun as well.
In the South, the following companies announced expansion plants:
- Enviva LP made several announements in August. First, the company announced it would build a second pellet plant in North Carolina. Located in Northhampton County, the plant will produce 440,000 tons of pellets annually, which will be shipped to Europe out of the company’s deep water port facilities in Chesapeake, Virginia. The plant is scheduled to be operational in October 2012. Enviva also announced in August that it has partnered with Biomass Energy to expand and operate Biomass Energy’s Bumpass, Virginia wood chip and pellet manufacturing facility. The three-year agreement between the two companies will add an additional 138,000 tons of pellets annually to Enviva’s production totals. Much of this total will be exported to Enviva’s European utility customers through the port of Chesapeake. In addition to these facilities, Enviva operates two pellet plants in Mississippi and one in Belgium, and its first NC plant is currently under construction in Ahoskie County; it will produce 385,000 tons of pellets annually.
- Fram Renewables has partnered with Telfair Forest Products to build a wood pellet facility at Telfair’s Lumber City, Georgia site. The company expects to purchase 350,000 green tons of wood per year to produce approximately 140,000 tons of pellets annually, which it will export to its European customers. Fram and TFP will begin construction of the facility immediately and expect it to be operational in January 2012. Fram’s Appling County, Georgia facility produces approximately 150,000 tons of pellets annually.
Infrastructure improvements have also been announced. The Port of Brunswick, Georgia announced major capacity expansion plans. Three of the port’s berths will be deepened, and both docks and handling facilities will be improved in order to prepare the port for exporting wood pellets and chips to Europe. The expansion will begin this October and be completed in January 2012.
These announcements make it clear that the Southeast is poised to become a leading supplier of wood pellets to the growing European market for wood pellets. Infrastructure improvements are extremely important because a limited number of deep water ports that can economically ship pellets to Europe exist. By developing both the infrastructure and the capacity, Forest2Market estimates the Southeast will be positioned to supply one-third of the demand emanating from Europe over the next decade.
Pellet capacity is also being added in other regions seeking to take advantage of growing European markets for industrial pellets. German Pellets, the world's largest manufacturer of wood pellets, announced that it will open its first U.S. wood pellet manufacturing facility in Texas. During the Interpellets exhibition in Stuttgart earlier this month,
German Pellets announced that it would repurpose a chip mill in Tyler County and produce 550,000 tons of pellets annually. “One advantage of building on this site is the possibility of using the existing supply structures and infrastructures, especially with respect to raw material supply,” said German Pellets' CEO, Peter Leibold. The company indicated that supply agreements had already been signed with local forest owners to provide raw materials to the plant. German Pellets Texas, LLC will ship pellets to Europe starting in 3Q2012, when the plant will be completed.
The Northeast has also shown increased interest in the industrial pellet market i. F.E.Wood and Sons plans a 350,000 ton per year pellet plant in Baldwin, Maine. While the project developers are still seeking additional financing, they have reportedly signed an off-take agreement. They will ship the pellets to Europe via Portland. Outside of the South, which has favorable growing conditions, infrastructure and shipping costs, Maine may have the best potential in the US for supplying pellets to Europe. (See Pete Stewart's blog on the Industrial Pellet Potential in Maine.)
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