Japan’s biomass imports jump in 2020

Japan's demand for palm kernel shells (PKS) and wood pellets grew sharply in 2020, supported by the start up last year of a series of dedicated biomass power plants and co-firing power plants.

The new capacity included Japanese biomass power producer and supplier Erex's 75MW Buzen and 75MW Ohfunato biomass units, Japanese utility Chubu Electric Power's 49MW Yokkaichi biomass unit, Japanese refiner Eneos' 75MW Muroran biomass unit, Japanese biomass power developer Green Thermal's 6MW Kinan biomass plant and Japanese power producer and wholesaler J-Power's 600MW co-firing unit at Takehara . Others that also started commercial operations last year were Japanese power producer Kushiro Thermal Power's 112MW co-firing power plant in Kushiro city and Japanese trading house Itochu and domestic gas retailer Osaka Gas' 49.9MW biomass power plant in Ichihara city .

PKS imports rise Japan imported around 2.24mn t of PKS in 2020, a 37pc increase from 2019, according to finance ministry data. But total PKS imports may be even higher as they are occasionally filed under an alternative customs code in Japan.

Indonesia remained the primary PKS supplier to Japan in 2020, accounting for 75pc of the country's total imports, three percentage points lower than the 78pc share in 2019. Imports from Indonesia increased by 32pc on the year to 1.68mn t.

Malaysia supplied 558,000t of PKS to Japan in 2020, up by 55pc on the year. Malaysia also accounted for 25pc of Japan's PKS imports, which was three percentage points higher than its 22pc share in 2019.

Indonesia's export tax and levy were very volatile, with changes made to the overall export tax package on eight occasions last year. The uncertainty surrounding the country's export tax and levy motivated Japanese buyers to seek more Malaysian PKS cargoes, especially in September-October.

Thailand supplied 700t of PKS to Japan in 2020, down by 13pc from a year earlier.

Diversified wood pellet supply Japan imported around 2.03mn t of wood pellets in 2020, a 26pc increase from 2019, from more diversified suppliers.

Vietnam was the biggest supplier to Japan in 2020 with 1.17mn t, accounting for 58pc of the country's total imports. Receipts from Vietnam increased by 32pc on the year.

Canada was the second-largest supplier to Japan in 2020 with 593,000t, a 1pc increase from a year earlier, and its cargoes accounted for 29pc of Japan's receipts.

Malaysia was the third-largest supplier to Japan, accounting for 8pc of the country's imports, five percentage points higher than its 3pc share in 2019. Malaysia supplied 160,000t of wood pellets to Japan in 2020, more than treble its performance in 2019 despite its movement control order in March last year, which temporarily halted operations at its pellet factories.

Australia supplied 51,000t of wood pellets to Japan in 2020, an increase of 31pc from 2019. Japan is expecting regular supplies from Australia in the future, as French utility Engie has a 280,000 t/yr wood pellet supply contract over 15 years starting in 2021 with Japanese trading firm Mitsui. Engie plans to supply 75pc of these wood pellets from Australian sources and the rest from North America and southeast Asia.

Russia, Indonesia and New Zealand supplied 17,000t, 14,000t and 11,000t of wood pellets, respectively, to Japan in 2020. Japanese traders expect more Russian pellet supplies in future because Russian producers can compete with southeast Asian producers on quality and price and have a shorter shipping distance compared with other major pellet-producing countries.

By Sam Hong

Japan&#39;s PKS imports (t) 2019 2020 Indonesia 1,276,691 1,679,114 Malaysia 361,366 558,452 Thailand 805 704 Total 1,638,862 2,238,270 Japan&#39;s wood pellet imports (t) 2019 2020 Australia 38,706 50,567 Canada 589,661 592,886 China 354 463 Estonia 145 148 Indonesia 2,754 14,487 Malaysia 52,154 159,773 Netherlands 1 0 New Zealand 21 11,219 Philippines 0 77 Russia 50 17,350 Sweden 0 6 Thailand 42,816 12,026 US 354 31 Vietnam 886,984 1,168,592 Total 1,614,000 2,027,625 Source: Ministry of finance

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