The primary policy that is driving the industrial wood pellet market in Europe is the Renewable Energy Directive, which sets binding targets on the European Union ("E.U.") members to reduce GHG emissions. The targets assigned to each member state are broadly based on their relative per capita income and are designed to ensure that 20% of all energy supplied to final consumers in the E.U. is renewable. While certain states have already met or exceeded their 2020 targets and others are on track to do so, some of the largest and most industrialized states (notably Germany, France, and the Netherlands) are well behind their 2020 targets.

In 2016, Denmark, Sweden, and Belgium consumed an aggregate of 3.7 million MT of industrial wood pellets, accounting for approximately 88% of E.U. demand. Hawkins Wright forecasts that potential demand from these three countries will increase to 4.5 million MT in 2021, supported by Dong Energy's conversion of Studstrup and Avedore (unit 1) in Denmark from coal to industrial wood pellets.

Although industrial wood pellet demand from the Netherlands was negligible in 2016, Hawkins Wright projects potential demand will increase to 3.5 million MT by 2021, supported by the availability of a new subsidy regime that provides A4 billion of subsidies for co-firing applications over an eight year period. Co-firing industrial wood pellet plants that have been granted subsidies under the new plan include RWE Ag (1.6GW Eemshaven plant), RWE Ag / Essent NV (two for the 600MW Amer unit #9), ENGIE (736MW Rotterdam plant) and Uniper SE (1.1GW Maaslavkte unit).

Hawkins Wright believes potential demand from Europe (excluding the U.K.) is expected to increase from 4.2 million MT in 2016 to 9.6 million MT in 2021 and that beyond 2026, European potential demand for industrial wood pellets may be increasingly driven by small efficient biomass combined heat and power ("CHP") plants, and less so by conversion of coal power plants. The trend towards more widely distributed power generation supports the need for highly efficient industrial wood pellet fired CHP plants, which are both low carbon and dispatchable.

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  United Kingdom >>
The driving force behind growth in demand for industrial wood pellets in the U.K. is the Climate Change Act, which requires the U.K. government... More >>

  European Union (excluding the U.K.) >>
The primary policy that is driving the industrial wood pellet market in Europe is the Renewable Energy Directive, which sets binding targets on the... More >>

  Japan >>
Japan is currently the fastest growing industrial wood pellet market in Asia. The Japanese government has stated that it remains committed to... More >>

  South Korea >>
In January 2012, the South Korean government introduced the Renewable Portfolio Standard, which requires 14 energy companies to source an increasing... More >>

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