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US biomass demand could rise to 30mn t/yr: Enviva

08 Apr 2016 18:56 (+01:00 GMT)
US biomass demand could rise to 30mn t/yr: Enviva

London, 8 April (Argus) — US biomass demand could reach 30mn t/yr under the US Environmental Protection Agency's proposed Clean Power Plan, US wood pellet producer Enviva chief executive John Keppler said yesterday at the Argus Biomass Conference in London, UK.

US biomass demand is estimated to reach 30mn t/yr, if all states were to achieve the targets set under the plan in its current form, Keppler said.

The US Supreme Court in February put the plan, which requires each state's power sector to meet CO2 targets for 2020-30, on hold until lawsuits against the regulations are resolved. But around 20 states are continuing with efforts to comply with the plan.

"If the US Clean Power Plan is implemented, it will be remarkable for the industry, but not on a systematic basis," Keppler said. "There will be very specific pockets of opportunity."

States that rely heavily on coal-fired generation would be likely to generate the most demand, while states with established forestry industries would be best placed to supply that demand, he said.

The projected growth may drive diversity in biomass sources, not just wood pellets, Keppler said.

The US exported 4.6mn t of wood pellets in 2015, primarily to the UK under long-term contract agreements. Domestic consumption last year was about 3.7mn t, of which none was for power generation, according to biomass consultancy FutureMetrics.

The US has about 7mn t of installed wood pellet export production capacity, with around 2.6mn t due to come on line this year. There are also several small production plants serving the domestic heating market. But if domestic generation demand were to rapidly increase to meet the Clean Power Plan's targets, exports from the US could dwindle.

The Clean Power Plan is a "highly political animal", Keppler said. But if it goes through in its current form, "that would fundamentally change transatlantic trade," he said.