Biomass industry welcomes CPP, seeks clarfication

  • Spanish Market: Biomass
  • 05/08/15

The US biomass industry has largely welcomed the inclusion of biomass in President Obama's Clean Power Plan (CPP), but the Environmental Protection Agency (EPA) must clarify the definition of "qualified biomass" in order to help boost the industry.

The US' largest wood pellet producer Enviva "applauded" the CPP and its "recognition of the role biomass can play in tackling climate change", Enviva chief executive John Keppler said.

US Industrial Pellet Association (USIPA) also welcomed the administration's recognition of biomass' role but "the new rules leave a layer of uncertainty over what kinds of biomass would and would not count", US Industrial Pellet Association (USIPA) executive director Seth Ginther said. USIPA is advocating for policy certainty and further clarification from the EPA and encourages its continuing work with the Scientific Advisory Board.

Concerns were voiced from the industry over the EPA's statement that it is "not scientifically valid to assume all biogenic feedstocks are carbon neutral". The American Wood Council called for the EPA to fully recognise the carbon neutrality of biomass, to reflect the energy benefits outlined in the biogenic accounting framework. The American Forest and Paper Association backed up those calls, adding that it wants to ensure the CPP and the proposed federal implementation plan "recognised [biomass energy from forest products] as a carbon benefit to the atmosphere".

USIPA believes US wood pellets produced from low-grade sustainably sourced fibre and exported to utilities in Europe would be deemed so-called qualified biomass. The Netherlands provides a positive example where co-firing of sustainably sourced wood pellets in coal power plants can help reduce emissions and create jobs, Ginther said. US wood pellet producer Fram Renewable Fuels president Harold Arnold confirmed they believed their wood pellets and dried material would be compliant with the plan.

Forest protection group Dogwood Alliance had hoped the EPA would categorically exclude biomass from the CPP but were thankful it "does not fully embrace burning wood for electricity". The non-governmental organisation (NGO) feels there are "still many questions to be answered" and called for the EPA to "exclude most feedstock besides the small-scale use of manufacturing waste and urban trimmings".

The CPP would require each state to meet a CO2 emissions target rate by 2030, which the EPA said will average a 32pc reduction in power plant emissions from 2005 levels, up from 30pc in the version proposed last year.

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26/04/24

Japan boosts wood pellet imports in March

Japan boosts wood pellet imports in March

Tokyo, 26 April (Argus) — Japan's wood pellet imports in March rose from a year earlier, with Indonesian supplies hitting a record high of almost 60,000t. Japan imported 531,500t of wood pallets in March, up by 47pc from a year earlier, according to preliminary data released by the country's finance ministry on 26 April. This was also higher by 9pc from February. Imports from Indonesia jumped to 59,353t in March, more than a fivefold increase from 10,796t a year earlier. This significantly exceeded the previous record high of 35,516t in January. But Vietnam remained Japan's top supplier at 247,054t, up by 63pc on the year. Japan received 102,478t of wood pellets from the US in March, with no cargoes delivered in March 2023.Imports from Malaysia also almost tripled to 22,261t from the previous year's 7,591t. Higher March imports sent Japan's total imports in the April 2023-March 2024 fiscal year to around 6.1mn t, up by 29pc from a year earlier. PKS imports But Japan cut imports of palm kernel shell (PKS) in March, down by 30pc from a year earlier. Imports from Indonesia fell by 23pc to 184,384t, while Malaysian supplies declined by 51pc to 40,462t. The start-up of a new biomass-fired power plant in March helped increase Japan's total imports. Japanese renewable power developer Renova in March started commercial operations at its 75MW Ishinomaki Hibarino biomass-fired power plant in northeast Japan's Miyagi prefecture, which burns an undisclosed volume of wood pellets and PKS. But domestic utility Jera's 1,070MW Taketoyo No 5 coal and biomass co-fired power unit in Aichi prefecture has been off line since a fire in January. Fellow utility Tokyo Gas' 51.5MW Fushiki Manyofuto biomass-fired plant in Toyama prefecture also continued to face technical issues after a 7.6 magnitude earthquake hit the Hokuriku area in January. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK's Drax closes carbon removals deal with C-Zero


18/04/24
18/04/24

UK's Drax closes carbon removals deal with C-Zero

London, 18 April (Argus) — UK utility Drax has signed a deal for carbon removal (CDR) credits with environmental consultancy C-Zero, following an initial agreement between the two parties in May 2023 . C-Zero will purchase CDR credits from Drax representing 2,000t of permanently stored carbon under the terms of the deal, Drax said on 18 April. The deal is indicative of the "maturing carbon market's growing appetite for high-quality carbon removals" and another "concrete step" towards Drax's delivering of bioenergy with carbon capture and storage (Beccs) in the US, the firm said. The deal with C-Zero comes a few weeks after Drax signed a five-year agreement with Karbon-X for CDR credits representing 25,000t of permanently stored carbon. Drax intends to remove at least 6mn t/y of CO2 from the atmosphere through its US Beccs projects . Drax aims to remove and store 8mn t/yr of CO2 from its UK Beccs projects, which are currently awaiting a consultation by the UK government to be finalised. By Marta Imarisio Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Railway equipment group warns of boxcar shortage


08/04/24
08/04/24

Railway equipment group warns of boxcar shortage

Washington, 8 April (Argus) — The Railway Supply Institute (RSI) is urging federal regulators to help avoid a so-called "boxcar cliff," fearing lower compensation rates are contributing to a shortage of boxcars in the US. Boxcars are essentially rented to railroads, which compensate the owners by paying car hire rates. US rail regulator the US Surface Transportation Board (STB), with a regulation known as the Arbitration Rule, has established a default rate for railcars, primarily boxcars, that do not have a negotiated rate. Those cars are assigned a rate that is equal to the lowest negotiated rate in effect for that equipment type at the end of the previous quarter. Other cars, such as tank cars and gondolas, usually have rates set in negotiated agreements to move various commodities. The problem is that the default rates can often be as low as 17¢/hour for a boxcar, which often costs more than $150,000 to build, according to RSI. It is difficult to negotiate a higher car hire rate with railroads because are very aware of that 17¢/hour default rate, said Paul Titterton, president of North American operations at railcar leasing company GATX. Those car owners also have to compete with TTX, a railcar pooling company owned by the largest railroads, that are exempt from these rules. TTX did not respond to calls for comment. Because they control TTX, railroads can invest and set boxcar rates they consider to be remunerative, Titterton said. There are about 100,000 boxcars in North America, and the low compensation rate is disincentivizing shippers from building and buying new boxcars, said Patty Long, president of RSI, which represents rail car makers and parts manufacturers. The existing "car hire system discourages investment in this integral component of our rail transportation fleet, with boxcars providing efficient shipping for crucial American commodities," she said. Boxcars are used to haul a wide array of goods including pulp, paper, beverages and canned goods. The default rate does not respond to changing market conditions, such as the shrinking equipment fleet, Long said. That low compensation rate contributed to a 38pc decline in the number of boxcars in the US since 2008, RSI said. And the aging boxcar fleet is expected to decline another 22pc by 2030. RSI has petitioned the STB to revisit its Arbitration Rule and reevaluate the way compensation is determined. Industry trade group the Association of American Railroads said it is reviewing the petition and deciding on its next steps. STB's Railroad-Shipper Transportation Advisory Council last year urged the agency to look into ways to head off the "boxcar cliff." The group noted that most railcars have a 50-year lifespan, and the retirement of boxcars built in the 1970s and 1980s is accelerating. "As a result, the North American railroad system and shippers across the US face a devastating boxcar shortfall without sufficient new production to replace thousands of mandated and other planned boxcar retirements," the group said in a March 2023 white paper. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Enviva to reject Sumitomo wood pellet contract


08/04/24
08/04/24

Enviva to reject Sumitomo wood pellet contract

Singapore, 8 April (Argus) — US wood pellet producer Enviva has filed a US court motion seeking to reject a term wood pellet offtake agreement with Japanese trading house Sumitomo. The 2 April motion, filed with the US Bankruptcy Court for the Eastern District of Virginia, seeks to enable Enviva to submit an order to reject the 2018 cfr Iwakuni biomass fuel supply agreement with Sumitomo. This 2018 agreement, also known as the Sumitomo Kaita contract, is one of the term pellet offtake agreements within Enviva's Japanese trading portfolio. Sumitomo acts as an intermediary broker, buying wood pellets for Kaita Biomass Power, court documents stated. Sumitomo has acted in similar brokering capacities for several other consumers. The Sumitomo Kaita contract is the first term deal rejected, after Enviva last month filed for Chapter 11 bankruptcy protection and released a restructuring plan . Rejection of an agreement under US bankruptcy proceedings does not imply the termination of that agreement but "is treated as a breach of contract, and any damage claim arising from that breach is treated as if it arose immediately before the bankruptcy was filed", according to US legal firm Troutman Pepper . Enviva has set up a group comprising a subset of its management and advisors, known as the RTB team, to review and renegotiate existing term contracts. The review was possibly among a series of measures laid out and considered by Enviva late last year, when concerns regarding its liquidity first emerged . Lead-up The RTB team carried out due diligence measures on the Sumitomo Kaita contract and "determined that the existing contractual pricing will yield negative operating margins over the life of the contract with a negative net present value on the operating margin", based on statements made in court filings by Alvarez and Marsal North America (A&M), Enviva's financial adviser in the Chapter 11 proceedings. Attempts by the RTB team at contacting Kaita since late November last year — to renegotiate contractual terms such as pricing, volume and pellet origin — have been unsuccessful, according to A&M. The Japanese consumer appears to be neither keen on amending the Sumitomo Kaita contract nor engaging directly with Enviva and its RTB team, court filings by A&M revealed. A&M said the rejection of the Sumitomo Kaita contract will be appropriate in the commercial interest of Enviva and its stakeholders. Kaita's boiler plants could possibly be operating on soft wood, commonly found in US sources, as opposed to Asian hard wood pellets, according to a market participant. Kaita could possibly trial Asian hard wood as an alternative biomass feedstock, if similar soft wood is unable to be secured. Enviva is required under the restructuring support agreement to submit a draft on its long-term business plan by 10 June and a finalised version by 5 July. Some considerations in this business plan includes rejecting certain contracts that do not help in the company's reorganisation efforts and documenting contracts that are renegotiated. By Jun Bin Phua Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Indonesia’s Paiton power plant to boost biomass use


08/04/24
08/04/24

Indonesia’s Paiton power plant to boost biomass use

Manila, 8 April (Argus) — Indonesia's 4.71GW Paiton coal-fired power plant, the country's largest power generation facility, is to increase biomass use as part of the country's emissions reduction efforts. PLN EPI, which is the fuel procurement subsidiary of state-owned utility PLN, has increased biomass delivery targets for the power plant in east Java to 259,581t in 2024, an increase of nearly 60pc compared with last year, the company said. The 800MW No.1 and No.2 units are expected to consume a combined 154,519t this year, a 10pc increase compared with 2023. Biomass consumption at the 600MW No.9 unit is expected to increase more than fourfold to 105,062t from 22,741t in 2023. The increase at No.9 is because of the full implementation of biomass co-firing following initial test runs in 2023, PLN EPI said. The rest of the generation units at Paiton have yet to start biomass co-firing as they are owned by private-sector companies. Only No.1, No.2 and No.9 are owned by PLN, which is required to implement co-firing at its coal power plants. These three units currently use 5pc biomass but PLN aims to increase this to at least 10pc over the next few years, it said. Paiton mainly uses wood sawdust as its biomass source. PLN EPI said it has already agreed supply contracts for most of this year's supplies. It is looking at sources located close to the power plant to minimise transportation costs and help develop a biomass economy for surrounding areas. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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