A report from the Hardwood Review Express indicates that there may be too little forestland to supply the rapidly expanding wood pellet industry currently growing in the southern U.S., especially as the construction industry recovers.
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A report from the Hardwood Review Express indicates that there may be too little forestland to supply the rapidly expanding wood pellet industry currently growing in the southern U.S., especially as the construction industry recovers.
According to Biomass Magazine in May 2013, the 121 operational U.S. pellet plants produce a combined 8.3 million metric tons of pellets per year. Another 16 pellet plants, with a combined output of 6.45 million metric tons, have been proposed.
While small-scale operations can sustain themselves using logging and mill residues, once an operation reaches an annual output over 500,000 metric tons (which requires 1 million tons of feedstock), it needs to use commercial thinnings and pulpwood harvests, according to Hardwood Review. This means competition for pulp, paper, OSB and other traditional forest product producers.
Conservationist groups the Dogwood Alliance and Natural Resources Defense Council have started the "Our Forests Aren't Fuel" campaign opposing the use of whole trees, not just residues, for pellet production.
Hardwood Reviews estimates that national forests could handle the increase in demand, however, 97 percent of pellet production capacity is in the South. Using U.S. Department of Agriculture (USDA) data, the review found that "Feeding the [proposed Lawerenceville,] Virginia plant would require 147 percent of the volume of trees currently harvested in commercial thinnings within the mill's procurement zone. In other words, there are not enough thinnings in the counties around Lawrenceville, Va., to support this mill on thinnings alone. If supplied exclusively with pulpwood from final harvests, on the other hand, this single mill would consume 22 percent of the existing pulpwood harvest."
This would mean an aggressive new competitor seeking raw materials. While the Review concedes that more demand might drive more timber into the market and take up the market share vacated by the paper industry, pellet mills may struggle to compete as new home building increases demand for traditional forest products.
Another issue facing the pellet industry is the limited amount of certified-sustainable forests in the U.S. The main market for pellets is European energy companies, which, because of the new EU Tiber Regulation, can only import wood that has been certified sustainably and legally sourced. The Review reports that a plant like the one intended to be built in Lawrenceville, Va., would only be able to source 10 percent of its materials from certified forests.