U.S. Biomass Prices Rise in 3Q after Downward Trend since Early 2009

Print this article | Send to Colleague

Prices for woody biomass, whether sawmill byproducts, forest residues, or urban wood waste, were higher in the third quarter than the previous quarter in most regions throughout the U.S. The Northwest saw the biggest increase, with forest biomass prices (delivered) up 19% from the second quarter, according to the North American Wood Fiber Review (NAWFR), Seattle, Wash., USA.

During the past few years, there has been an expansion of the biomass-consuming sector in the Northwest, both of stand-alone facilities and for energy plants in conjunction with pulp mills and sawmills. This development has resulted in a decline in open-market volumes of sawmill biomass (bark and wood fiber residues) and there is starting to be an increased need to source additional volumes of higher-cost forest biomass and even urban recycled wood from the larger metropolitan areas in both Oregon and Washington, NAWFR notes.

As a result of low prices for fossil fuels, there has not yet been a dramatic increase in the consumption of biomass in the Northwest, and prices for both mill and forest biomass were actually lower in the third quarter compared with the same quarter in 2008 and 2009. This picture may very well change over the next two years if the plans for six new energy facilities in Western Washington materialize, as this would increase the demand for wood fiber, NAWFR explains.

California, home to the largest concentration of stand-alone biomass plants in North America, was one of the few states where BCAP (the Biomass Crop Assistance Program) money seemed to function as intended earlier this year, namely to bring out additional volumes of forest residues. With the absence of the BCAP incentives, average woody biomass prices in the third quarter returned to pre-BCAP levels of 2009.

In the U.S. Northeast, the third quarter found biomass plants receiving lower income due to relatively low demand for power in the region. Prices for feedstock, in reaction, drifted lower in part also due to plentiful inventories left over from the second quarter. Forest biomass prices have trended downward since early 2009 and are currently 22% below the first quarter of 2009, reports NAWFR.

Demand for woody biomass in the U.S. South has slowly increased the past few years as more energy plants have decided to add green energy to their portfolio of alternative energy sources. As a result, biomass prices have trended upward the past four years and were almost 50% higher in the third quarter this year compared with early 2007. This trend is likely to continue because of the expansion of biomass plants expected in the region in the coming years.

More information about NAWFR is available online.