North America has turned into a net exporter of wood pellets over the past few decades, success that has only increased as biomass has taken off across the globe.
According to the North American Wood Fiber Review, wood pellet exports grew by seven percent in the fourth quarter of 2015, making it the third consecutive quarter of growth. The amount exported that quarter rose to just over 1.7 million tons, bringing the total export volume for 2015 to 6.1 million – a two percent increase from 2014 and four times that of 2010.
The prime target for American pellet exports is Europe, primarily the United Kingdom. Much of the volume produced and exported to Europe comes from Southern states, particularly those in the Gulf Coast region. New plants in Louisiana, Mississippi, and Alabama contributed to this increase as they came online or ramped up production. Thanks to this new production, exports from the Gulf Coast region went up by 70 percent in six months in 2015.
While shipments fell in the first three months of 2016, this was more than likely a temporary decrease thanks to an unusually warm winter in Europe.
Meanwhile, Canadian exports grew by 17 percent, with most of the pellet shipments going to Europe and Asia. Most of the Asian exports go to Japan and South Korea, with China remaining an unrealized market full of opportunity in the future. Japan in particular shows promise because its government is solidly in favor of renewable energy that will, over time, lower energy costs for a nation without many natural resources of its own.
Exports of biomass pellets will continue to grow as foreign use of renewable biomass energy increases. But there is plenty of domestic demand as well, as states like Oregon begin to phase out coal and replace it with biomass energy, among other renewable sources.