Japan is currently the fastest growing industrial wood pellet market in Asia. The Japanese government has stated that it remains committed to decarbonisation and reducing GHG emissions in the long-term. Under the Paris Agreement, Japan is committed to a 26% reduction in GHG emissions by 2030 as compared to 2013 levels. In order to facilitate the required growth in renewable power generation needed to meet this target, the Japanese government has initiated a number of policy initiatives, including the Best Energy Mix target for 2030, and a Feed-in Tariff ("FIT") system.

As of 2016, 12% of total power capacity in Japan was generated from renewable sources. Under the Best Energy Mix adopted by the Ministry of Economy, Trade and Industry in 2015, Japan is planning to increase reliance on power from renewable sources to 23% by 2030, with energy from biomass reaching approximately 4% of national energy demand.

FutureMetrics, an independent provider of information, market analysis, and strategic advice to companies in the industrial wood pellet sector, forecasts that 6.2GW of biomass power would be required to achieve these levels, representing approximately 7.4 million MTPA of industrial wood pellet potential demand (provided 30% of the biomass power target is generated from industrial wood pellets).

Japan currently supports investment in renewables through a FIT system pursuant to which the price paid for renewable energy reflects the cost of generation for a fixed period of 20 years. Under this region's FIT, electric power transmission and distribution businesses are required to purchase energy produced from renewable sources at a fixed price and fixed term. For 2017 to 2019, Japan has established a compelling FIT rate of Yen 21/kWh - Yen 24/kWh for projects consuming imported biomass.

Although current demand for industrial wood pellets in Japan is relatively low, the industrial wood pellet market is growing at an accelerated rate and should continue to increase due to the support of the policy initiatives described above. There are currently over 10 new biomass projects in Japan that are in late stage development. Considered against this backdrop, Hawkins Wright projects that potential demand for industrial wood pellets will increase from 350,000 MT in 2016 to 3.3 million MT by 2021 and 6.0 million MT in 2026.

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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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