Today, the cost and environmental limitations of traditional fossil-based fuels are driving unprecedented global demand for new, renewable energy alternatives. Wood-based biomass — the most abundant, underutilized and economical renewable energy source available — has emerged as the fuel of choice for a variety of energy processes.
Wood pellets are an efficient, cost-effective alternative source of energy that can be used in a number of power and heat applications. They are a solid renewable fuel consisting of dried, compressed wood fibres from:
Carbon neutral — Trees absorb carbon dioxide as they grow. This stored carbon dioxide is released when the biomass is burned to generate energy, and is absorbed during forest regeneration. No new atmospheric carbon dioxide is produced under a sustainably managed forest system, and for every tonne of coal that is replaced by wood pellets, there is a corresponding 1.7 tonne reduction in carbon dioxide emissions.
High efficiency — The net energy content of wood pellet fuel is approximately 75% of the energy content of the same amount, by weight, of average quality steam coal. One tonne of wood pellets has the same amount of energy as 3.4 barrels of crude oil or 18,000 cubic feet of natural gas.
Base load renewable fuel — Unlike wind, solar and other forms of intermittent renewable energy, wood pellets provide a dispatchable, uninterrupted source of power.
Low cost renewable fuel — Limited capital expenditure is required to replace, or co-fire, coal with wood pellet fuel in existing coal-fired power plants. This makes it one of the lowest cost renewable fuels.
The global market for wood pellet fuel is focused on three sectors:
Currently, Europe dominates the wood pellet fuel market. It generates approximately 75% of global demand, with demand spread fairly evenly across each of the three market sectors. Europe’s dominant position is mainly the result of the European Union being the first political power to recognize the importance of diversifying its energy base and reducing greenhouse gas (“GHG”) emissions by increasing its use of sustainable "non-fossil" fuels. As more countries strive to meet their GHG reduction targets, demand for wood pellet fuel is expected to grow significantly, with large electricity and heat generation facilities driving a large proportion of the increase.