Biomass Fuel Production On the Rise – with More to Come

biomass fuel

In what comes as good news for the biomass industry, the amount of biomass fuel produced in the United States is growing – a trend that could increase well into the future thanks to global demand.

According to the U.S. Energy Information Administration, biomass fuel producers in the U.S. produced 620,000 tons of product in January 2018, selling 97% of it to domestic and foreign users.

The numbers released by the EIA confirm that capacity is growing while inventory is shrinking, evidence of increasingly higher sales. For example, capacity hit 11.87 million tons in January, coming mostly in the South. A majority of this capacity goes to foreign users in the form of exports.

Additionally, inventories of wood pellets fell by 25 percent from December 2017 to the following month.

Meanwhile, prices remained steady; the average price of biomass fuel sold in the U.S. hit $154.76 per ton, while prices for exported fuel reached $169.01 per ton.

Global Demand to Increase

Growing demand for biomass fuel in key overseas markets will continue to support American biomass suppliers.

According to Biomass Magazine, the biggest increases in global demand are coming from Asia, specifically South Korea and Japan. In South Korea alone, imports jumped dramatically from 2012 to 2017 by a factor of 20, to 2.4 million tons of wood pellets.

In Japan, imports grew seven-fold from 2012, topping 500,000 tons in 2017.

Heavy government subsidies for renewable energy are helping to fuel the demand in these two countries. And incentives are in place to reward companies that consume renewable energy, especially in the form of biomass.

The theory is that American suppliers will be some of the main beneficiaries of this surge in demand. Already, South Korea and Japan are the 11th and 8th largest markets, respectively, for wood pellet exports. Those places could grow as European markets, making up the top five positions for exports, turn more to wind and solar over the next decade.

It’s clear that domestic biomass producers will benefit if they can continue to increase production and capacity. Government support may be necessary to give the still-growing industry the foundation it needs to fund the growth, much like government subsidies are currently helping domestic energy suppliers who use biomass as a main source for fuel.

ProcessBarron produces bulk material handling equipment for biomass fuel producers and other providers in the energy sector. Contact the team for more information about how our custom engineering can help solve critical issues for industry partners.