Poyry Biomass Pellets Multi-client Study

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Biomass pellet markets have shown strong growth in recent years with a total market volume of around 16 million tonnes in 2010.

Pöyry Management Consulting, London,

Pöyry expects the global consumption of biomass pellets to nearly treble to 46 million tonnes by 2020, reflecting an annual growth rate of roughly 11%. Consolidation of the currently fragmented market is likely to occur with a trend towards larger individual project capacities to gain from economies of scale. Market transparency and supply security re currently lacking and their future development will help pave the way for the commoditisation of biomass pellets.

With the expected policy framework Poyry expects the market volume to treble by 2020, reaching a global production of 46 million tonnes of biomass pellets. This will create opportunities for producers in cost competitive regions but will also present challenges for established players. Pöyry’s 2nd edition of the Global Pellet Multi-Client study aims to remain the benchmark publication for information and insight into the global production and trade of pellets.

Bioenergy projects in Europe are making steady progress and an increasing number of fossil fuel plants are being retro-fitted throughout Europe to utilise biomass. South Korea and Japan have concrete initiatives in the pipeline to increase their utilisation of biomass for energy generation and China is developing bioenergy generation capacity at an impressive rate. A constantly changing political landscape leading to a wide range of incentives and regulations affects countries disparately and often adds a high level of uncertainty to the market, which in combination with the difficult financing environment and the global ‘economic crisis’ has recently impacted the completion of announced pellet plant projects.

Consequently, Pöyry feels that a new expanded and revised edition of the Pellet Multi-Client report, first published in 2009, was needed in order to reflect the current developments in the pellet market landscape, as well as to analyse how key drivers will influence the market going forward. Andreas Teir, who is leading Pöyry’s global bioenergy practice, explains: “The rapid development in the pellet sector has been largely driven by bioenergy incentive schemes in a number of European countries, the availability of cheap biomass as raw material and the cost of transport. We expect significant further growth and increasing international trade of pellets to level regional supply and demand imbalances.”

The updated report provides a longer term market outlook up to 2020. Besides up to date market information for more than 30 countries across the globe, the report has been expanded to cover topics such as the emerging use of agricultural feedstocks for pellet production, a section detailing the economics of production, shipping, and utilisation of torrefied pellets, new sustainability and greenhouse gas (GHG) emission regulations and an overview of incentive schemes affecting wood pellet supply and demand worldwide.

“Torrefied pellets hold a good potential to improve transport costs compared to wood chips and normal wood pellets. Utilities may also benefit from better handling characteristics and further improved combustion properties in relation to co-firing with coal. However, the technology and its economics provide challenges for the effort to scale it up to industrial scale and we do not anticipate a high level of investment on the short to medium term.” says London based Hannes Lechner, Head of Bioenergy NW Europe, Pöyry Management Consulting.

For further information about the study and business opportunities in the wood pellet market, please contact Hannes Lechner (Hannes.Lechner@poyry.com).

About Pöyry Management Consulting and Pöyry Group

Pöyry Management Consulting has been actively following developments in the bioenergy area and has become one of the most authoritative sources of knowledge about biomass and its production and use for renewable energy generation.

Pöyry Management Consulting is part of the Pöyry Group, a global expert in management consulting and engineering. We offer our clients in-depth industry expertise, innovative solutions and lifecycle engagement. Our knowledge extends across hydropower, oil and gas, power and heat, renewable energy, pulp and paper industry, chemical process industry, transportation, water and environment, and construction services. The group employs 7,000 experts in 49 countries. Pöyry PLC is listed on NASDAQ OMX in Helsinki. For more information about us, please visit www.poyry.com.

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