U.S. Pellet Industry Overview

Technical Report · Sun Jan 01 04:00:00 EST 2017

DOI:https://doi.org/10.2172/1485429· OSTI ID:1485429

Lamers, Patrick ^[1]

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1. Idaho National Laboratory (INL), Idaho Falls, ID (United States)

The U.S. production of wood pellets has grown to over 8 million tons by 2015 (FAO 2016). The majority of the production capacity increase took place in the U.S. Southeast and is associated with industrial wood pellet production for export markets. In 2015, over 5 million tons were exported, 99% of which went to EU markets (84% to the UK alone) (EUROSTAT 2015, FAOSTAT 2016, USDA 2016). The production and consumption growth of U.S. residential wood pellets has been slow in comparison. The industrial and residential wood pellet markets are beginning to merge slowly, but production excess (e.g., in 2015 and 2016) in the industrial wood pellet segment could not be fully absorbed by domestic or oversea residential markets. The main growth path for U.S. wood pellet production is still seen to lie in oversea markets (Bingham 2016, Strauss 2016). Demand increases for industrial pellets are projected to occur within the next years in Europe (Netherlands, Denmark, UK, Belgium) and Asia (predominantly Japan). At the same time, subsidy schemes in Europe are also bound to be phased out within the next decade. U.S. suppliers will have to compete with other supply regions (e.g., Western Canada to Asia) in the long-term, and are already focusing on selling more and more into non-subsidized markets such as biochemicals, absorbents, and soil amendments (Keppler 2016). An outlook of U.S. industrial wood pellet production under a potential growth in U.S. biopower demand and a lack thereof shows a wood pellet oversupply of 9-10 million tons by 2030, equaling roughly 12.5 million tons of production capacity, 20-30 large-scale plants, or 15 million green tons of woody biomass. Once the U.S. production of wood pellets outgrows combustion market demand (which will plateau even with a domestic expansion of biopower) the industry will require additional outlets to avoid a structural decline and bankruptcy. This will create a resource push and cost reduction, driving the development of a U.S. cellulosic biofuels industry.

• Research Organization: Idaho National Laboratory (INL), Idaho Falls, ID (United States)
• Sponsoring Organization: USDOE Office of Energy Efficiency and Renewable Energy (EERE)
• DOE Contract Number: AC07-05ID14517
• OSTI ID: 1485429
• Report Number(s): INL/EXT--17-41028-Rev000
• Country of Publication: United States
• Language: English

Related Subjects

09 BIOMASS FUELS
Market
Pellet
U.S. industry