Global Trends Review, July 29 – August 04, 2013: Energy demand for biomass grows; modified timber market developing

Pellet imports from the US to Europe are still on an upward trend. According to statistics provided by Eurostat, in the first four months of 2013, import volume grew by 51% year-on-year to 756,789 tons. In value terms, the increase was 43% to €104.9 million.

Britain purchased 59.1% of the total quantity exported by the US. Year-on-year, the British imports tripled, reaching 447,853 tonnes. Belgium’s imports rose 57%, Swedish deliveries remained stable, while Italy increased imports by 379%. USA are the largest supplier of pellets in Europe (24.7% in January-April 2013), followed by Latvia (11.9%), Canada (10.9%) and Russia (5.9%).

KD Quality Pellets company is starting up a new pellet plant in Ontario province (Canada). The plant will produce 45,000 tonnes of industrial pellets each year, 95% of which will be directed to the UK and Italy. As company’s President Ken Doupe noted, Canadian market is now lagging from European one, but the company is hoping to increase domestic sales over time.

Foresight Group and the UK Green Investment Bank plc have announced the investment of GBP 20 million into the construction of the Evermore Renewable Energy 15.8MWe wood-fuelled CHP station in Derry, Northern Ireland. The Evermore project, which is expected to become operational during 2015, is forecast to be the largest renewable energy project in Northern Ireland, increasing the amount of renewable electricity currently generated in Northern Ireland by approximately 10%. The project will be fuelled by around 110,000 tonnes of wood annually under a long-term contract with Stobart Biomass.

However, energy use of biomass is again causing concerns. After the news on cut of British subsidies to biomass power stations and protests of Austrian paper industry against pellet-fuelled stations it is now reported that Canadian province of Nova Scotia is considering new regulations that would make it easier to maintain a sustainable wood harvesting industry. “As more bark and forestry by-products are being used as renewable wood energy sources, we need to account for all of the new ways we use wood and wood by-products in order to maintain a sustainable wood supply,” said Natural Resources Minister Charlie Parker. “These proposed regulations would require some of those new users to plan and report on their consumption.” Under the proposed regulations, organizations that burn wood or wood by-products to generate 250 kilowatts or more of heat or electricity would need to register with the province. Reporting requirements for those using less than 1,000 cubic metres would be less stringent than for larger users, while users that consume more than 5,000 cubic metres would have to provide the province with an annual wood purchase plan and contribute to silviculture programmes. Biomass used to heat homes would be exempt from the proposed requirements. On July 18, the province also delivered on its commitment to ban whole- and full-tree harvesting.

Modified timber market developing

Pan Pacific Forest Products, a subsidiary of Oji Paper in New Zealand, has developed its own thermally modified timber grade, which is highly dried lumber recovered from pruned butt logs of radiata pine. The company installed high temperature processing kiln as experimental facility in February 2012 and has made test development. By March 2014, it will install German-made high temperature kiln with capacity of 80 cubic metres and will start commercial production. Radiata pine lumber, which is dried by normal kiln to bring moisture content down to about 10%, is retreated by high temperature kiln, which brings temperature to 220-230 Celsius gradually in 36 hours then leave it for three hours. Then the temperature is gradually reduced in 30 hours. Final moisture content will be 6-7%. The product is said to be durable with high dimensional stability and preservative treatment is not necessary so it is ideal for exterior use like decking, window frame and siding board. It will be on the market next year with annual production of 9,000 cubic metres.

London-based Accsys Technologies plc, which has a production plant in The Netherlands, said that sales (excluding panel maker Medite) increased by 53% to €6.1 million compared to a year ago. Accsys said sales growth was driven by a boost in demand and its own sales and marketing activities, including targeting architectural audiences across several countries. “We expect revenue growth to continue due to a combination of increasing sales volumes and recent price increases implemented in all locations,” it said.

***

There is widespread concern amongst northwest Russian sawmills about growing difficulties in obtaining logs from the start of October onwards, EUWID Wood Products said. Delivery volumes are currently lower than usual for this time of the year, so stocks could deplete before first deliveries from winter felling will be made.

Creditors are making another attempt to sell Slovenia’s insolvent security and graphic paper manufacturer Radeče papir. A new public auction for the entire business entity of Radeče papir will be held in September. The starting auction price is set at €2.5 million, while at the first auction last November which did not attract any customers the starting price was €6.2 million. Earlier it was also reported that Slovenian government had put on sale tissue paper producer Paloma in the framework of privatisation project.

Prepared using corporate press releases, Holzkurier, Timber Trades Journal, Fordaq, EUWID Wood Products, and EUWID Paper.