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Tree Scraps from U.S. Create Wood Pellet Export Boom

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According to a new article published this week by National Geographic, deep in the forests of the U.S. South, tree scraps are fueling a little-known but controversial energy boom—wood pellets. Long used to heat homes in the country's Northeast, they're now destined for a new market in Europe. 

Europe is importing the pellets in ever higher volumes, burning them for electricity to meet renewable energy targets. The demand has transformed the U.S. industry, prompting a doubling of biomass exports over the past year.

More than half of the exports go to the U.K., where the utility group Drax is converting three of its six power plants to burn wood pellets instead of coal. Drax is setting up shop in the U.S. to feed those plants, building two pellet mills in Louisiana and Mississippi that are slated to open in 2015.
In the photo above, wood pellets imported from the U.S. are being processed for a power plant in Denmark. 

Maryland-based Enviva, a Drax supplier, has opened five wood pellet mills in the last four years. At least four additional export-focused plants are under construction in the southern states, and a handful of others have been proposed, according to a database at Biomass magazine.

The pellet boom is not without controversy. While it hasn't generated the headlines or large protests that have accompanied the surge in U.S. oil and natural gas production, there's still debate. The pellet industry says it's using wood by-products that would otherwise go to waste. Critics on the environmental side say the expansion hurts forests and does not help the climate. Critics in the paper industry say, if not done entirely from what would be waste products, it raises the price of materials for production, pointing to the recent rise of lumber prices in Canada for mills where some of their domestic timber has been diverted entirely to biomass projects.

But unlike fossil fuels such as coal and oil, wood is renewable. Where one tree goes down, another can grow. As a weapon against climate change, however, harvesting mass quantities of forest and shipping them across the Atlantic has drawn skepticism.

"It's just crazy that there's an idea out there to cut down the things that are supposed to protect us from climate change," said Adam Macon, campaign director at the Dogwood Alliance, an Asheville, N.C.-based environmental group. "It's backwards thinking."

With global demand for wood pellets set to double over the next decade, the pellet industry is expanding in the southeastern U.S. The South holds about 40% of the country's timberland, which has long supplied the lumber, pulp, and paper industries.

The industry reports that it is only using low-grade timber by-products—the treetops, thinnings, and damaged "waste" wood referred to as residue. Seth Ginther, executive director of the U.S. Industrial Pellet Association, a trade group, said that their wood pellet producers can't afford to pay for the high-quality wood that goes for saw timber. "All we can do is go in and pick up the by-products," he said.

Photos at logging sites near southern pellet plants show stumpy, clear-cut tracts carved out from large stands of trees. Environmental groups, Ginther said, use such photos to suggest that the biomass industry is "taking everything off that plot of land and sending it to a pellet facility, which is an absolute falsehood."

The truth is less well "clear-cut." At any logged site, the product—wood—is separated into different merchandise groups, depending on what prices it can fetch. High-quality sawtimber, which can be several times more valuable than lower grades of wood, does not go to any U.S. pellet mills. Matt Willey, a spokesperson from Drax, said that wood pellet suppliers including Enviva are subject to random audits that confirm the wood is produced sustainably and from forest residue.

"Enviva may well take residues and thinnings from bottomland forests," Willey remarked. "That does not necessarily mean there is anything wrong with that. Such areas have been a managed part of the forest industry for many years and supply a range of industries."

The industry argues that by using the forests, it is helping to save them. The only reason that U.S. landowners don't convert forestland to cornfields or real estate developments, Ginther said, "is if they have a revenue stream that allows them to keep it a forest. Bioenergy does that."

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