G Brown Newsletter April 2012

Gerald W brown * 7202 County Road U * Danbury, WI 54830 Phone 715-866-8535 Gerald Brown is solely responsible for the content in this newsletter • BIOMASS BOILER HEATS WHITCHURCH HOSPITAL THE ECO-WAY • FROM FUKUSHIMA DISASTER COMES BIOMASS ENERGY • OBAMA ADMINISTRATION ANNOUNCES NEW FUNDING FOR BIOMASS RESEARCH AND DEVELOPMENT INITIATIVE • RAIL PROJECT LOAN REQUESTS EXCEED FUNDS • UPSTATE N.Y. ARMY FACILITY SET FOR BIOMASS RENOVATION • EPA PROPOSES FIRST-EVER GREENHOUSE GAS REGULATIONS FOR NEW POWER PLANTS • STRONG ENOUGH TO SURVIVE: A YOUNG PELLET MILL FINDS THE CHIP THEY NEED. GENEVA WOOD TURNS TO BANDIT BEAST GRINDERS. • TURNING OVER A NEW LEAF • US AND CANADA PELLET EXPORTS TO EUROPE REACHED A RECORD HIGH • BUILDING ON SUCCESS • GOVERNMENT ASSISTANCE: DOUBLE-EDGED SWORD? • PROCEED, BUT BE INFORMED AND HAVE A SOLID PLAN • WOOD PELLETS EXPORTS FROM NORTH AMERICA TO EUROPE HITS 2 MN TON IN 2011 • INDUSTRIAL WOOD PELLET INDUSTRY IS SUSTAINABLE AND CARBON NEUTRAL • FOREST CERTIFICATION: OPPORTUNITY AND CHALLENGE FOR THE WOOD PELLET INDUSTRY • EUROPE'S 2020 EMISSION TARGETS AT RISK BY BIOMASS? • DONG TO SPEND $795 MILLION TURNING FOSSIL PLANTS TO WOOD • PARTNERS CELEBRATE BIOMASS AT GRANT UNION • INITIATIVE WOOD PELLETS BUYERS WORKS TO SMOOTH SUPPLY CHAIN DISRUPTIONS • WOOD BIOMASS MARKET REPORT BEGINS REPORTING PRICES FOR PREMIUM GRADE WOOD PELLETS • FUTUREENERGY: THE ECONOMICS AND RISK OF WOOD PELLET PRODUCTION FOR HEATING • DAIGLE OIL COMPANY BEGINS BULK PELLET DELIVERIES IN MAY • THE PENDING SUBSIDY CLIFF, AND THE WAY OUT • GREENHOUSE USES CAPTURED CO2 TO GROW FOOD • INITIATIVE WOOD PELLET BUYERS WORKS TO SMOOTH SUPPLY CHAIN DISRUPTIONS • NEW SURVEY SHOWS AMERICANS DON’T SUPPORT BIOMASS ENERGY • PELLET PLANT FACING OSHA FINE ON FIRE • ITALY’S INCREASING DEMAND BIOMASS BOILER HEATS WHITCHURCH HOSPITAL THE ECO-WAY Tuesday 27th March 2012, 10:59AM BST. Whitchurch Community Hospital has become more eco-friendly after a new biomass boiler was installed. The 38-bed community hospital fuels the boiler with wood pellets, bought from a local company, to help with heating and hot water costs. Bosses installed the boiler as part of the NHS Carbon Management Programme and it is set to halve the hospital’s carbon emissions. The hospital, which provides outpatient services, has been using the state-of-the-art boiler since the winter. In the first few weeks the 250kW output BioMatic boiler immediately had to work 24 hours a day, seven days a week and the storage silo for the pellets was filled every two to three weeks. Mike Ball, estates officer at South Staffordshire & Shropshire Health Care NHS Foundation Trust, has been responsible for the project, in partnership with Hamworthy Heating and Stewart Associates Consultants, on behalf of Shropshire Community Health Trust. He said it had worked very well. “At peak times the boiler was using 20 tonnes of wood each week. “Its performance from day one has been fantastic,” he said. He said Hamworthy Heating enabled the trust to deliver environmentally sustainable heating at highly efficient levels of performance. The cost of installing the boiler was paid from the primary care trust capital budget, while the expected Renewable Heat Incentive from central government was due to be given directly to the hospital. Officials said patients would not have noticed any difference in the warmth of the building in Claypit Street or any change to the hot water supply. The fully automatic boiler does not need to be continuously burning with a trickle fuel feed to stay alight, like most biomass boilers. Instead it has a fully automatic ignition with self-extinguish and auto-restart during periods of no demand. Read more: http://www.shropshirestar.com/news/2012/03/27/biomass-boiler-heats-whitchurch-hospital-the-eco-way/#ixzz1qKOr97gt FROM FUKUSHIMA DISASTER COMES BIOMASS ENERGY By James Montgomery, News Editor, RenewableEnergyWorld.com March 23, 2012 | 3 Comments In Japan, the wood from decommissioned nuclear power plants, even some that contains radiation, will serve as feedstock to new biomass power plants. New Hampshire, U.S.A. -- In the wake of the March 11, 2011, earthquake/tsunami/nuclear disaster, nearly all of Japan's 50-plus nuclear plants are now offline, and soon they all will be dark. That's left a gaping hole in Japan's power generation, just ahead of the traditionally grid-stressing summertime season. Strict energy conservation efforts have helped soften that blow, and Japan is still figuring out how to responsibly reopen some of its nuclear footprint. In the meantime, renewable energy will be relied upon more heavily to shoulder Japan's energy load, including megasolar plans and wind projects. Another renewables plan approved by Japanese officials aims to solve two problems in one stroke. The government says it will fund the ramp-up of several biomass plants specifically to process tons of rubble and debris from the disasters. Most of that, an estimated 70 percent of the 22 million-plus-tons in Iwate, Miyagi, and Fukushima prefectures, is wood. Japan's Forestry reportedly has earmarked ¥9.5 billion to cover up to half the costs for building the four 1-5 megawatt biomass plants in Iwate and Miyagi Prefectures. Once they run out of debris from the disasters, they'll switch to processing wood from lumber and paper mills. This waste is reportedly piling up faster than it can be disposed of. In Fukushima itself, ground-zero for the March 11 nuclear disaster, biomass efforts have progressed even further. The prefecture has just over 2 million tons of debris from the disaster, only around 5 percent of which has been processed. First Energy Service Co. (FESCO) says it is now accepting debris from the quake that actually contains radiation. (Here's FESCO's brief in Japanese, which the Nikkei summarizes in English.) The 11.5-MW biomass plant in Shirakawa uses around 380 tons of debris per day, and is now starting to accept up to 20-30 tons per day of "tainted" debris, which it will decontaminate to >100 becquerels/kilogram (Bq/kg) of radioactivity using high-pressure hoses and other methods, reports the Nikkei. FESCO claims "practically no" radioactive substances will be released into the atmosphere during incineration. The leftover ash residue, though, will have highly concentrated radioactive substances (several thousand Bq/kg). Government rules say ashes with up to 8,000 Bq/kg can be buried, while material tallying 8,000-100,000 Bq/kg must be secured and buried in concrete containers. The prefecture apparently has agreed to take the ash and figure out how to dispose of it, so FESCO is moving ahead. OBAMA ADMINISTRATION ANNOUNCES NEW FUNDING FOR BIOMASS RESEARCH AND DEVELOPMENT INITIATIVE www.energy.gov • Image by Chuong / Shutterstock COLUMBUS, Ohio – Today, as President Obama went to Ohio State University to discuss the Administration’s all-out, all-of-the-above strategy for American energy, the White House announced up to $35 million over three years to support research and development in advanced biofuels, bioenergy and high-value biobased products. The projects funded through the Biomass Research and Development Initiative (BRDI) – a joint program through the U.S. Department of Agriculture (USDA) and the U.S. Energy Department (DOE) – will help develop economically and environmentally sustainable sources of renewable biomass and increase the availability of renewable fuels and biobased products that can help replace the need for gasoline and diesel in vehicles and diversify our energy portfolio. Today’s announcement to invest in advanced biofuels supports President Obama’s blueprint for an economy fueled by homegrown, alternative energy sources designed and produced by American workers. These investments will help cut America’s oil imports, develop clean alternative energy technologies, and protect American families and businesses from the ups and downs of the global oil market. “USDA’s partnership with the Department of Energy aims to improve our country’s energy security and provide sustainable jobs in communities across the country,” said Agriculture Secretary Tom Vilsack. “This funding represents the kind of innovation we need to build American-made, homegrown biofuels and biobased products that will help to break our dependence on foreign oil and move our nation toward a clean energy economy.” “President Obama called for an all-of-the-above strategy that develops every available source of American energy and advances technologies that will help reduce our dependence on foreign oil and save money for American consumers,” said Secretary Chu. “Investing in next-generation biofuels helps boost the competitiveness of the U.S. biofuels industry, supports economic development in rural communities, and creates skilled jobs for American workers.” For fiscal year 2012, applicants seeking BRDI funding must propose projects that integrate science and engineering research in the following three technical areas that are critical to the broader success of alternative biofuels production: • Feedstock Development Funding will support research, development and demonstration activities for improving biomass feedstocks and their supply, including the harvest, transport, preprocessing, and storage necessary to produce biofuels and biobased products. • Biofuels and Biobased Products Development Research, development and demonstration activities will support cost-effective technologies to increase the use of cellulosic biomass in the production of biofuels and biobased products. Funding will also support the development of a wide range of technologies to produce various biobased products, including animal feeds and chemicals that can potentially increase the economic viability of large-scale fuel production in a biorefinery. • Biofuels Development Analysis Projects will develop analytical tools to better evaluate the effects of expanded biofuel production on the environment and to assess the potential of using federal land resources to sustainably increase feedstock production for biofuels and biobased products. Integrating multiple technical areas in each project will encourage collaborative problem-solving approaches, enable grantees to identify and address knowledge gaps, and facilitate the formation of research consortia. Subject to annual appropriations, USDA and DOE plan to contribute up to $35 million over three years for this year’s BRDI solicitation. This funding is expected to support five to seven projects over three to four years. A description of the solicitation, eligibility requirements, and application instructions is available at https://www.fedconnect.net/ and http://www.grants.gov/ under Reference Number DE-FOA-0000657. Applications are due April 23, 2012, and must be submitted electronically. It is anticipated that applicants who submit completed applications will be notified of the results by June 15, 2012. In addition to the funding announced today by USDA and DOE, the Obama Administration is taking a number of aggressive steps to support the growth of robust renewable energy and biobased markets in the U.S. For example, in August 2011, the President announced that USDA, DOE and the Navy are investing up to $510 million during the next three years in partnership with the private sector to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation. The initiative supports the President’s Blueprint for A Secure Energy Future, the Administration’s framework for reducing America’s dependence on foreign oil. On Feb. 21, President Obama issued a Presidential Memorandum directing the federal government to take decisive steps to dramatically increase the purchase of biobased products over the next two years. Biobased products include items like paints, soaps and detergents and are developed from farm-grown plants, rather than chemicals or petroleum bases. The biobased products sector marries the two most important economic engines for rural America: agriculture and manufacturing. To support these efforts, USDA created the BioPreferred program to promote the increased purchase and use of biobased products. Last year, USDA released the USDA Certified Biobased Product label to assure consumers that a product or package contains a verified amount of renewable biological ingredients. Grants awards and national program leadership for the BRDI program will be administered by USDA’s National Institute of Food and Agriculture (NIFA) and DOE’s Office of Energy Efficiency and Renewable Energy. Through federal funding and leadership for research, education and extension programs, NIFA focuses on investing in science and solving critical issues impacting people’s daily lives and the nation’s future. More information is available at: www.nifa.usda.gov. The Energy Department’s Office of Energy Efficiency and Renewable Energy (EERE) accelerates development and facilitates deployment of energy efficiency and renewable energy technologies and market-based solutions that strengthen U.S. energy security, environmental quality, and economic vitality. Learn more about EERE’s work with industry, academia and national laboratory partners on a balanced portfolio of research in biomass feedstocks and conversion technologies. RAIL PROJECT LOAN REQUESTS EXCEED FUNDS Five applicants seek $15 million in low-interest loans from pool of $6.9 to $10 million. By: Bob Mercer, Republic Capitol Bureau PIERRE — The state Railroad Board faces some thorny financial decisions that could affect the potential growth in shipping of agricultural and forest commodities from Aberdeen, Kimball, Lake Preston and Rapid City. Five companies have applied to the board for a total of $15 million in low-interest loans to build train-loading facilities for shipping grain and wood pellets from those communities. But there’s not enough money in the board’s account to go around, at least not any time soon. The board expects to have only about $6.9 million become available in the next 16 to 17 months and possibly another $3.3 million at some point in 2014. The board will consider the loan applications Wednesday afternoon during a meeting in Pierre. An additional complication is that the loans typically are made to regional railroad authorities, which under state law have authority to levy property taxes in the event that a loan goes bad. There isn’t a regional authority in place for one of the applicants, Deadwood BioFuels. The company has a new production plant at Rapid City, where wood pellets are made. Rail service for shipping the pellets in bulk at 100 tons per rail car calls for construction of a new siding that will cost an estimated $3.76 million. The company is seeking a $964,000 state loan. One source of wood for the pellets is waste from trees removed because of pine-beetle infestation in the Black Hills. The four other applications are for conventional rail loops where unit trains can be loaded with grain. Prairie Ag Partners at Lake Preston is seeking a $4.5 million state loan to build an 8,000-feet loop that can handle 120-unit trains. Liberty Grain has asked for a $3.6 million state loan as part of its $33.6 million project east of Kimball at the intersection of Interstate 90 and S.D. 45 south, where Chuck Jepson has grain elevators, a fertilizer distribution plant and a 1.5-mile train loop under construction. Dakota Mill and Grain, meanwhile, wants to build a $22.8 million loading facility at Kimball that would feature 15 million bushels of grain storage and 9,000 feet of loop track. The company seeks a $3.5 million state loan. The fourth new grain project is proposed at Aberdeen by Ochsner Real Estate Limited Partnerships. It calls for providing 1.5 million bushels of grain storage and 10,620 feet of loop track west of Aberdeen along U.S. 12 and the Burlington Northern Santa Fe line. The loan request is for $2.4 million. UPSTATE N.Y. ARMY FACILITY SET FOR BIOMASS RENOVATION By Luke Geiver | March 29, 2012 • ReEnergy Holdings LLC has purchased an idled 60 MW coal-fired power facility at Fort Drum, a U.S. Army installation near Watertown, N.Y. The company will convert the plant to operate on forest residue. ReEnergy plans to renovate the facility with $34 million in upgrades, helping the U.S. Department of Defense meet its renewable energy initiatives. The facility, renamed ReEnergy Black River and set to begin operation in 2013, will be the tenth biomass facility owned or operated by the New York-based company. The biomass used at the Fort Drum location will come from local wood fuel managed lands that are subject to third-party certifications from organizations that include the Forest Stewardship Council, the Sustainable Forestry Initiative and the American Tree Farm System, according to ReEnergy. The purchase price of the facility was not disclosed. The plant is expected to generate roughly 400,000 megawatt hours per year, enough energy to power 50,000 homes, once the renovations are complete. Fort Drum will meet 100 percent of its energy needs from the biomass power plant, and ReEnergy hopes to staff the facility with citizens from the community, as well as veterans and spouses from the Fort Drum army installation. In February, ReEnergy expanded its engineering department, a move the company said would help meet the needs of its growing portfolio. ReEnergy plans to renovate the facility with $34 million in upgrades, helping the U.S. Department of Defense meet its renewable energy initiatives. The facility, renamed ReEnergy Black River and set to begin operation in 2013, will be the tenth biomass facility owned or operated by the New York-based company. The biomass used at the Fort Drum location will come from local wood fuel managed lands that are subject to third-party certifications from organizations that include the Forest Stewardship Council, the Sustainable Forestry Initiative and the American Tree Farm System, according to ReEnergy. The purchase price of the facility was not disclosed. The plant is expected to generate roughly 400,000 megawatt hours per year, enough energy to power 50,000 homes, once the renovations are complete. Fort Drum will meet 100 percent of its energy needs from the biomass power plant, and ReEnergy hopes to staff the facility with citizens from the community, as well as veterans and spouses from the Fort Drum army installation. In February, ReEnergy expanded its engineering department, a move the company said would help meet the needs of its growing portfolio. EPA PROPOSES FIRST-EVER GREENHOUSE GAS REGULATIONS FOR NEW POWER PLANTS By Andrew Restuccia and Ben Geman - 03/27/12 11:41 AM ET The Environmental Protection Agency proposed first-ever national standards Tuesday to limit greenhouse gas emissions from new power plants, dealing perhaps a final blow to efforts to build more coal-fired facilities in the United States. The long-awaited regulations are aimed at reducing pollution blamed for climate change, which the vast majority of the world’s scientists say is occurring in large part because of the burning of fossil fuels such as coal. Scientists warn that climate change is threatening public health and the environment. The proposed rules set up an election-year clash between President Obama and Republicans — both in Congress and on the campaign trail. Opponents of the regulations, which include some coal-state Democrats, say the rules would burden the economy and cost jobs. “Right now there are no limits to the amount of carbon pollution that future power plants will be able to put into our skies — and the health and economic threats of a changing climate continue to grow,” EPA Administrator Lisa Jackson said in a statement. “We’re putting in place a standard that relies on the use of clean, American made technology to tackle a challenge that we can’t leave to our kids and grandkids.” Anticipating intense pushback from Republicans and industry groups, EPA insisted Tuesday that the regulations are “practical, flexible and achievable.” “EPA’s proposed standard reflects the ongoing trend in the power sector to build cleaner plants, including new, clean‐burning, efficient natural gas generation, which is already the technology of choice for new and planned power plants,” the agency said in a summary of the proposal. The regulations would require new power plants that burn fossil fuels to release no more than 1,000 pounds of carbon dioxide per megawatt‐hour. The agency said new natural-gas plants will be able to meet the standard without adding any additional technology. But new coal plants would need to add new technology like carbon capture and storage (CCS), in which carbon dioxide emissions are collected and sequestered in the ground rather than released into the atmosphere. The rules give new coal-fired power plants flexibility to meet the standard. Instead of meeting the standard on an annual basis, new coal plants that use CCS can use a 30-year average of their carbon dioxide emissions, according to EPA. The proposed standards come as many plans to build new coal plants have been waylaid by competition from inexpensive natural gas — which is undergoing a production boom — and other factors. Environmentalists applauded the rules, calling them the nail in the coffin for new conventional coal plants. “The new standard reinforces what most power company executives and investors already understand — that carbon pollution and climate change are serious concerns, and that if and when new coal plants make a comeback, they will need to be designed with [carbon capture and storage],” said David Doniger, the policy director of the Natural Resources Defense Council’s climate program, on the group’s blog. Sierra Club Executive Director Michael Brune was more blunt. He told Bloomberg that the rules “will make it nearly impossible to build a new coal plant,” and added that because the market has been moving that way, the rule “captured the end of an era.” The rules drew quick criticism from industry groups. The National Mining Association immediately called on Congress to scuttle the plans. “Volatile natural gas prices will, once again, expose millions of households to higher utility bills, threaten hundreds of thousands of workers with unemployment and weaken both the competitiveness of basic industries and the reliability of the nation’s electricity grid,” said the group's CEO, Hal Quinn. The GOP-led House already passed legislation last year that would scuttle EPA’s power to regulate greenhouse gas emissions, but the measures have not advanced in the Senate, where Democrats have a majority While the rules generated quick attacks, an even bigger battle could ensue over standards for existing plants. But Jackson told reporters Tuesday that the agency has "no plans" to issue climate rules for existing plants. Sen. James Inhofe (R-Okla.), one of the Senate’s most vocal climate change skeptics, vowed to kill the regulations using the Congressional Review Act (CRA), which allows Congress to block final agency regulations. “An overwhelming number of Senators have insisted they want to rein in the Obama-EPA,” Inhofe said in a statement. "The CRA I will introduce will give them the opportunity to decide whether they will stand with President Obama and his destructive war on affordable energy, or their constituents back home," he continued, "who will suffer the most from hundreds of thousands of lost jobs and the skyrocketing electricity and gas prices this agenda will impose on them." The administration rolled out the regulatory proposal with little fanfare Tuesday and President Obama — who is in South Korea at nuclear security summit — did not issue a statement about the regulation. In contrast, when EPA issued final regulations to control power plant mercury emissions and other toxics in December, Obama praised that rule as a major public health protection while touting White House efforts to ensure it doesn’t affect electricity reliability. And Jackson announced the December regulation at a high-profile, multi-speaker press conference at the Children’s National Medical Center in Washington, D.C. The forum for Tuesday’s announcement: A shorter conference call Jackson held with reporters. To be sure, the December rollout of rules to curb mercury and other toxics is an imprecise parallel to EPA’s Tuesday climate announcement, which involved only a draft regulation. Nonetheless, whether by accident or design, the administration announced the power plant rule on a day when official Washington was turning to other matters. Tuesday brought arguably the most important day in the landmark Supreme Court battle over Obama’s signature healthcare law as justices considered whether the so-called individual mandate passes constitutional muster. This story was updated at 3:34 p.m. and at 4:50 p.m. STRONG ENOUGH TO SURVIVE: A YOUNG PELLET MILL FINDS THE CHIP THEY NEED. GENEVA WOOD TURNS TO BANDIT BEAST GRINDERS. After a century of being the toothpick capital of the world, the plant at Strong, Maine, came back to life in 2009 as a new wood pellet line. Geneva Wood Fuels selected a Bandit 3680 Beast grinder to produce the chip they needed for efficient manufacturing of high quality wood pellets. The ultimate goal is to move to a larger Model 4680 Beast grinder. By Staff Date Posted: 4/1/2012 Situated approximately 50 miles northwest of Augusta, Maine is the quiet, simple, neighborly town of Strong. This humble villa is the epitome of small town life in the upper Northeast, complete with modestly attractive 19th and early-20th century buildings assembled neatly among the rolling hills and picturesque views of Maine’s Western Mountains. Just south of town is the Sandy River, which propelled Strong’s prosperity through the 1800s by supporting rich agriculture and attracting numerous mills to the area. Strong has an official history that dates all the way back to 1801, but like so many other small towns across the country rich with local culture, unless you’re a resident, you’ve probably never heard of the place. That is, unless you happen to be a connoisseur of logging and timber trivia, in which case you’ll recognize Strong, Maine as the toothpick capital of the world. Or at least, it was; Charles Forster was one of the entrepreneurs drawn to Strong in the mid-1800s, where he established a toothpick mill that would eventually take Forster Manufacturing and the small town to the top of the global toothpick market. Fueled by abundant timber supplies, daily toothpick production reached well into the millions per day, creating a legacy that would ultimately last more than a century. Cheaper overseas competition finally caught up with Maine’s toothpick industry in the late 20th century until the Forster mill in Strong—the first and last toothpick plant in the state—finally closed down in 2002. It wouldn’t stay closed for long. “Both of our families have been involved with toothpicks for many years,” said Jeff Allen, mill manager for Geneva Wood Fuels. Jeff and his wife Lucinda purchased the old Forster factory when it closed, and they literally kept the fires burning for a few years by running a woods operation and a small co-gen biomass power facility at the site. And then in 2008 came an opportunity to enter the burgeoning wood pellet market. “We sold the mill to a gentleman from Chicago who was going to sell wood pellets,” explained Jeff. “He already had a business model, so basically we brought in equipment and built it. That’s the way she stands today.” Jeff and Lucinda stayed with the plant as managers while new owner Jonathan Kahn invested upwards of $13 million dollars into the old factory, turning it into a state-of-the-art pellet mill that went online in 2009. It still looks much the same on the outside as it has for the past 60 years, but inside the red walls are three Andritz Sprout pelletizers, a high-efficiency TSI dryer, an Andritz Sprout stationary hammermill, banks of electronics, and advanced computer monitoring systems that all come together to convert wood chips into pellets. Those pellets are then sent to an automated assembly line where they’re packaged into 40-pound bags, stacked on pallets and taken to the loading dock via forklift. Crews load as many as 10 to 12 trucks each day, shipping pellets to customers and retail outlets throughout New England under the names of Maine’s Choice and Geneva. For bulk deliveries, pellets skip the packaging process and go to a silo where they’re loaded directly into feed trailers for transport. “Most of the pellet activity is here in the Northeast,” said Lucinda. “That’s where most people want them so our pellets go to Massachusetts, New York, down into Rhode Island and Connecticut. That’s about the furthest our pellets go.” That’s the process on the inside, but before the pelletizers or the assembly lines get a crack at their duties, round wood logs delivered to the plant must be debarked and converted into chips. To make a quality pellet while getting the best efficiency and throughput from the mill, the team at Geneva Wood Fuels uses a very specific wood chip. Getting that chip in the first place wasn’t easy; Jeff said they tried all kinds of machines from numerous manufacturers, but none of the chippers or grinders they tested could produce the right size and style of chip that worked best in the mill. It was actually at a trade show in the southern U.S. that Mr. Kahn came upon Bandit Industries and the Model 3680 Beast, and after considerable research it proved to be the only machine that could ultimately do the job. “Nothing else could make that product,” remarked Jeff. “Nobody else has that mill design; you just can’t do it with anything else. The sizing is everything when you put it into the mill. You also have to be careful that you don’t hurt the wood fibers, because they hold the pellet together. You can’t just beat it out; you really have to cut it because grinding just doesn’t work. This all affects how your dryer feeds, because if it balls up when you put it in the dryer, it’s the wrong product and it won’t come out.” Beast horizontal grinders use a patented cuttermill designed to process material with more of a cutting action. Geneva Wood Fuels took it a step further on their 3680, using Bandit’s Chipper Knife setup with a four-inch screen to get the specific product they needed. The company started with a 540-horsepower CAT C15 version of the 3680, making the most of its 35 by 60-inch mill opening to process just about anything fed into it. The C15-powered Beast worked eight to nine hours a day for the better part of a year, accumulating close to 2000 hours before Jeff decided an upgrade was in order. The company stayed with the 3680 but switched to a newer model running a 700-horsepower CAT C18, and since August 2011 it’s been working at a similar pace as their previous Beast. According to Jeff, however, there’s still more room to run. “Right now, the pellet mill is nowhere near capacity,” he explained. “For power reasons we’re only running off-peak, nine hours a night. We can save $25,000 a month in power costs because it’s so much cheaper to run at night. We can do about 4000 to 5000 tons a month on this off-peak deal, but as the demand increases we’ll go away from that. There’s a Catch-22 so-to-speak, because once we cross that bridge we’re going to lose the $25,000 savings right away, so we’ll need to sell quite a bit extra to make the added production worth it. We could probably make 7000 or 8000 tons a month; the Beast would be working overtime out there!” Some might say their Beast is already working overtime, but in addition to being the only machine able to produce the chip they need, it’s also proven to be a machine that can take the daily use with very little drama. “If that machine doesn’t run, the plant doesn’t run, and I wouldn’t have bought another one if I wasn’t happy with it,” said Jeff. “You have to keep an eye on any kind of machine like this, and there’s a learning curve too—you have to know what to keep an eye on. We did all the upgrades on our old one, they’re easy to work on and so far they’ve just been quite good. You’re always going to have minor hiccups but if you do your preventative maintenance and take care of it, it will take care of you.” Extra overtime for the crews at Geneva Wood Fuels might come sooner rather than later. Global demand for wood pellets is rising thanks to skyrocketing use throughout Europe, where federally established renewable energy requirements are more aggressive. Many sources believe worldwide pellet consumption will increase by a factor of six before the year 2020; whether or not that kind of increase takes place in the United States is uncertain, but increased demand will never the less be felt globally. Local demand is already rising; pellets from the plant are used by area and neighboring school districts, nearby companies, and the town of Strong has installed a wood pellet boiler to heat offices and the library. “The pellet market actually took a dive in 2010,” said Jeff. “2011 was a good market, and I think fossil fuel costs were a part of that. We also had a better sales force, and I think more people are looking at renewable resources. We’re doing much better than a year ago.” Geneva Wood Fuels is prepared to handle increasing demand. Jeff feels their 3680 can turn out more chips, but moving to a Model 4680 Beast with 1200 horsepower is the ultimate goal. To realize the full production capability of the plant, Jeff envisions a Model 4680 back-to-back with their drum debarker, taking material directly from the machine instead of using a separate loader to feed the Beast. “We may have the 4680 here within the next few years,” he replied. “And it sounds crazy, but the fuel economy actually got better when we went with the bigger engine on the 3680. We’re getting more tons per horsepower out of this one, about a 15 to 20 percent improvement over the C15. The power curve doesn’t die off as fast with the bigger engine; it spends less time processing more material. And when we get to the 4680 we can really have some fun!” As the pellet market expands, so do the prospects for the region. Like many small towns based around manufacturing, Strong has suffered in the wake of mill closings and the ripple effect goes throughout the area. Geneva Wood Fuels employs 20 people directly, but the plant creates its own ripple effect by supporting 45 loggers, 35 trucking companies and approximately 10 contractors, with the vast majority of these located in Strong or the surrounding areas. The plant uses wood sourced within a 50-mile radius and their busiest time of the year is winter, further boosting the local economy at a time when business typically slows. For a rural town like Strong with a population of roughly 1200, that’s not an insignificant contribution. “When the ground freezes, all the swamps and everything freeze over and the wood just flies,” said Jeff. “We have spring and fall mud; the spring is much worse and we’re usually down for 30 to 60 days so we really have to make hay in the winter, take in as much wood as we can get into the yard. Winter is definitely our best time of year.” Invigorated by new machinery and a new mission, the old toothpick factory is proving to be as resilient as the town in which it resides. Originally constructed by Forster in the late 1800s, it was rebuilt in 1952 after a fire and reborn as Geneva Wood Fuels in early 2009. A large explosion six months into the pellet operation threatened to permanently close the site, but repairs brought the factory roaring back to life in 2010, better than ever. “We’re still growing,” said Jeff. “We’d just started rolling before the explosion; it took a year to rebuild but we’ve been slowly tweaking things. We just might break that off-peak power wall, run full-time just to see what the plant will do. We’ve got a good sales force, my local dealer Hammond Tractor has been real good too, and I’ve got guys at Bandit I can call for whatever I need on the Beast.” With the history of Strong so closely tied to the timber industry, there’s a sense that Geneva Wood Fuels isn’t just a business in the community, but rather an institution of the community, with generations of residents invested in its future. Ask just about anyone who calls the area around Strong their home and they will say that, after a century of toothpick production, it’s nice to see the lights back on at the old Forster place—a place where Geneva Wood Fuels is now laying the foundation for a new local legacy. Whether or not the business can last a century like its predecessor remains to be seen, but with an abundance of local material, the support of a tight-knit community, rising demand in the product and a bevy of modern equipment to keep it flowing, don’t be surprised to see those lights burning for a long, long time to come. TURNING OVER A NEW LEAF Biomass/coal blended pellets might be on the horizon By Anna Austin | April 03, 2012 • BETTER BLENDS: A New Leaf Energy is developing biomass and coal blended pellets, including (from left) 100 percent coal, 80:20 coal:biomass, 60:40 coal:biomass, and 100 percent biomass. PHOTO: A NEW LEAF An Illinois company that has been working under the radar for the past few years on new fuels and new ways to transport them says it is beginning to see results. It is planning to begin construction of its first fuel pellet plant within the next couple of months. A New Leaf Energy partner Bob McElwee says the plant will be located in the Midwest on a major river, and will manufacture wood pellets for shipment to Europe, as well as a blend of coal fines and biomass. “I have three million tons of coal fines available within five miles of our plant, which load product directly onto barges at the site,” McElwee says. The blended fuel will feature a binder, but McElwee says he’s working with research groups to determine the final additive. Currently he is a partner in Nu Materials, which has developed an organic binder called Thermoresin. It is made from proteins and carbohydrates of renewable biomass and allows the blending of coal and biomass materials into one pellet product. McElwee says he will be working with other companies as well to get the best additive or binder for each client. The Midwest pilot plant will be the prototype for upcoming plants in other parts of North America, according to McElwee. These plants will not only offer the biomass pellets and coal blends, but also baled chips. “This new baled product will be available through our Southern U.S. locations as we begin to ship our orders within months,” he says. “The wood chip product will be available in two-ton bales that are sanitized and wrapped in plastic.” McElwee says the planned plants will have a combined capacity exceeding 2 million tons per year, and A New Leaf is opening up new long-term supply agreements each week. Because the company will ship from multiple points in North America and the bales have a favorable density, he expects the shipping costs to be much less than similar bulk products. “Our next operation in the Southern U.S. is slated to start shipping 350,000 tons in year one, but we have not yet committed the product to a specific customer,” he says. The team from A New Leaf Energy will be working with utility customers globally in the coming months on additional agreements for all the products, McElwee adds. He says the ability to produce multiple products using the same skilled labor, and being located near the raw material while at or near major ports, has created a value and price difference for the company’s products. —Anna Austin US AND CANADA PELLET EXPORTS TO EUROPE REACHED A RECORD HIGH • April 05, 2012 Pellet exports from North America to Europe reached a new record high in the 4Q/11. Shipments have increased practically every quarter for four years, up from 130,000 tons in the 1Q/08 to almost 600,000 ton in the 4Q/12, according to the North American Wood Fiber Review (NAWFR). Export data collected by NAWFR (www.woodprices.com) from exporters and customs information in both North America and Europe show that wood pellet shipments reached just over two million tons in 2011, up almost 300% from 2008. Pellet producers in British Columbia have been the major exporters since the first shipments 12 years ago but this changed in the second half of 2011 when expanded investments in new capacity in the US South put US shipments on par with Canada. Six pellet export plants, widely varying in capacity, are now operating in the U.S. South. Four others have shipped trial shipments the past six months and six additional export oriented pellet plants have been announced, making it highly likely that there will be significant export growth over the next 24 months. In Eastern Canada, exports in the 4Q/11 remained unchanged from the previous quarter when volumes decline primarily due to the closure of the Enligna pellet plant in Nova Scotia. However, there are plans to re-start the idled plant later this year by a new owner. In 2012, small increases in volumes from both the U.S. and Canada will likely occur, with more significant export growth due in 2013. At that time, new export-oriented pellet plants now being constructed are scheduled to begin operations. On the receiving end of pellet exports to Europe, utilities in the Netherlands, the UK, and Belgium continue to be the largest consuming destinations of North American pellets with the UK showing the steadiest and most vigorous growth. The North American Wood Fiber Review has tracked wood fiber markets in the US and Canada for over 20 years and it is the only publication that includes prices for sawlogs, pulpwood, wood chips and biomass in North America. The 36-page quarterly report includes wood market updates for 15 regions on the continent in addition to the latest export statistics for sawlogs, wood pellets and wood chips. BUILDING ON SUCCESS By Lisa Gibson | April 05, 2012 • Lisa Gibson I’ve heard the term up-and-coming used to describe the wood pellet industry in the U.S., but from my perspective, it’s already here. At this point, I would say it’s simply continuing to expand. Export markets and global demand that North American pellet mills are expected to satisfy seem to increase a bit with each new study released. Development in the Southeast U.S. is explosive and port authorities are taking notice, expanding their own capabilities to accommodate the new opportunities afforded to them through the pellet industry’s growth. While multiple producers are positioning themselves to take advantage of the massive foreign demand, even more are happy with the domestic market they supply here, mainly in residential heating applications. In the West, pellet mills are using wood that has fallen victim to the pine beetle infestation, helping to remove dead and dying material that could interfere with forest health. Read more about the epidemic and its causes in a feature article by Associate Editor Anna Austin beginning on page 14. In the Northeast U.S., some state-level policies and reports are illustrating current and projected pellet popularity. Both New Hampshire and Maine have added wood pellets to their fuel price reports, and a residential pellet boiler subsidy program in Berlin, N.H., has been extended indefinitely. The program aims to assist with installations of residential boilers for homeowners switching to pellet fuel. Its organizers say interest in pellet heat is growing in the Northeast and the program can help more people save money on heating bills. And pellets are in the spotlight even on the federal level. In March, the U.S. Department of Housing and Urban Development announced that wood pellet boilers will be classified as a conventional, primary heating source, and therefore will qualify for Federal Housing Authority funding, provided they meet the other guidelines. HUD officials admitted the agency was perhaps behind the times in recognizing pellet boilers as a qualifying technology and promised that the handbooks would be updated to reflect the new classification. As the industry continues to evolve from its already-healthy position, there is no shortage of new ideas and ingenuity. Starting on page 28, Associate Editor Luke Geiver showcases some innovative pellet boiler installations that set themselves apart in areas ranging from feedstock handling to overall design and appearance. The pellet industry has arrived and is continuing its U.S. growth in both the domestic and export markets. Producers here are recognized as major players on the world stage. And they’re prepared to provide millions of tons of pellets to keep that stage warm and bright. GOVERNMENT ASSISTANCE: DOUBLE-EDGED SWORD? By Bill Bell | April 05, 2012 • Bill Bell “Wood Pellet Producers Ask Federal Government for Help.” So read the unfortunate headline of the Bangor Daily News article describing a February meeting of Maine’s pellet industry leaders with USDA Rural Development Undersecretary Dallas Tonsager. A predictable reader reaction in the comments blog accompanying the online version of the newspaper was “Great, another industry looking for a handout.” Of greater concern was the fact that of the 129 posted comments, this particular response was “liked” by 78 viewers, far more than the response to any other set of remarks. Even allowing for the infantile nature of many commenters and their respondents, this reaction needs to be recognized for what it is. Our industry needs to adjust for the fact that federal energy assistance programs are now going to be “Solyndra-shy.” Add to this the fact that one of our biomass champions, U.S. Sen. Olympia Snowe, R-Maine, has announced that she will not be seeking re-election. Add to all that the fossil fuel industry’s success in getting the “government shouldn’t pick winners and losers” mantra adopted in many circles. We need to ask of government only that which clearly makes sense to virtually every consumer and voter. In many states, common-sense concerns about the cost of constructing new electrical generating facilities has led to a very modest systems benefit charge added to every electric bill. Those funds are then used to bring about significant efficiencies, and reductions in electricity consumption, to electricity consumers of all classes. Concerned citizens, legislators, and public utility regulators in half of our states have used somewhat the same electricity-oriented approach to establish renewable portfolio standards mandating that a percentage of the electricity delivered in those states come from renewable sources. In Maine, however, a yellow light has just flicked on. The attempt by environmental groups to place on the November ballot an increase in the required renewables has fallen short of the required petition signatures, and is postponed for a year. Public measures to promote pellet heat will succeed only if they are seen by the consumers as truly cost-saving. The best thing happening now, in terms of public support for fuel-switching, is the media advertising presently taking place in Maine by both stove retailers and a major pellet boiler firm, all stressing that pellets are half the price of oil. Once this simple claim becomes widely accepted as fact, arguments about climate change, economic benefits of keeping fuel dollars in-state, and increased employment in the forest products industry suddenly carry much more weight. But let’s be careful what we wish for. Short-term subsidies such as the very successful Maine Forest Service grants to schools installing pellet heat are enduring only if they can inspire other school officials, architects, heating consultants, and local taxpayers to make similar investments without grant assistance. Public financing for wood heating systems will be successful if it is in the form not of outright taxpayer expenditures, but instead of loan guarantees such as those USDA already provides for a myriad of rural development purposes. Maine’s energy agencies are currently considering a pilot project that will enable 500 clients of the Low Income Home Energy Assistance Program to install pellet stoves, getting them off the ever-escalating oil treadmill. This has potentially great value both for our industry and for the community action agencies administering the LIHEAP program. It will show taxpayer funds being channeled to purchase a local fuel and provide jobs to Maine workers, while helping needy persons get through the winter. There is, of course, one request of public officials that generally engenders strong public support: sensible regulation. In response to a strong request from Dutch Dresser, president of the Maine Pellet Fuels Association, Sen. Susan Collins, R-Maine, and the U.S. Secretary Housing and Urban Development announced March 2 that pellet heating systems are now to be accepted as a primary heating source for FHA financing. “There are moments when the federal government can be a little behind the cutting edge in terms of new technology,” HUD Secretary Shaun Donovan conceded. This recognition of pellet heat removes what has been a major roadblock for heating installers. Government support: not a good request. Fair treatment for pellet heating customers: a popular goal. Go figure. Author: Bill Bell Executive Director Maine Pellet Fuels Association (207) 752-1392 feedalliance@gwi.net PROCEED, BUT BE INFORMED AND HAVE A SOLID PLAN By Chris Wiberg | April 05, 2012 • Chris Wiberg In my last column, titled “The End of an Era,” I described a fundamental shift that I observed over the past year pertaining to standardization of the pellet fuels industry. Essentially, the industry has generally accepted that standardization is upon us and it is now time to implement programs that have long been in the works. Since the last issue of Pellet Mill Magazine was published, the Pellet Fuels Institute and the American Lumber Standard Committee have finalized an agreement, and ALSC has accredited several auditing agencies and testing labs for the purpose of implementing the domestic residential/commercial densified fuel standards program. The European Pellet Council continues to add to its list of countries that are implementing the EN plus pellet certification scheme on an international basis. In addition, the Industrial Wood Pellet Buyers initiative in Europe to develop standard specification for industrial wood pellets has progressed by opening the door to U.S. pellet producer feedback through the U.S. Industrial Pellet Association. This provides collaboration critical in the implementation of a mutually acceptable standard for international shipments to European utilities. Along with standardization, we anticipate better consistency within our fuel streams, better performance for the combustion appliances and mechanical handling systems, and of course, happier customers. Unfortunately, standardization is likely to result in some growing pains, as well. As an active participant in all of these standards development initiatives, I feel obligated to make you aware of a common theme that the industry as a whole needs to understand. These are new programs and will need to be refined as we identify shortcomings during their implementation. I am not trying to imply that they have not been thoroughly researched. Quite the contrary, but I think we can all relate to two concepts: there is always room for improvement, and it doesn’t always work as well in practice as it did on paper. The implementation of standards is much like the scaling up of any new technology to commercialization. As you ramp up, you identify problems and then modify the design as necessary until it works the way it is intended. The difference is that when standards are specified in contracts, they become legally binding. We need to be very careful that in an effort to grow consistency and reliability within the industry we don’t create a situation where producers are left holding the bag (or ship, literally) or worse yet, recalling it due to an unforeseen yet preventable issue. That is why it is essential for every fuel producer to fully understand any standard it intends to implement and to have a solid plan for implementation. The best advice is to do your homework beforehand. All of these standards programs are well-defined. Take the time to read them carefully and relate them back to your process. Ask yourself if the standard is achievable for your facility, and how confident you are taking on the implementation. If you are not sure, then do more research or ask for help. Also, do not be afraid to bring questions or concerns with any of these standards back to the standards developers. In all cases, I can assure you that they are eager for feedback and want to improve them. You should also carefully consider your quality team. Make sure your quality manager knows this is a primary responsibility and not just an additional duty. Select people who know and understand quality management or who have sufficient background and/or capabilities to be trained into the role. A meticulous mindset is very helpful here. In short, get the right people on your quality team. This also applies to your external support companies such as auditors, laboratories, logistics coordinators, and others. When in doubt, these entities should be able to answer your questions. If they cannot, you are probably working with the wrong people. In a perfect world, there would be a simple step-by-step guide that everyone could use to gain compliance with these new standards, but every facility is unique with its specific feedstock materials, equipment, people, intended markets, etc. Compliance will need to be achieved one production facility at a time, each with its own unique circumstances. It’s a step toward strengthening this industry through which we all will find growth. Proceed, but be informed and have a solid plan. Author: Chris Wiberg Manager, Biomass Energy Laboratory (218) 428-3583 cwiberg@tpinspection.com 05 Apr 2012 Last updated at 02:03:37 GMT WOOD PELLETS EXPORTS FROM NORTH AMERICA TO EUROPE HITS 2 MN TON IN 2011 SEATTLE(Scrap Monster): Wood pellet exports from North America to Europe had a record growth and reached up to 2 mn tons in 2011, driven by the increased demand in The United Kingdom, according to report by North American Wood Fiber Review (NAWFR). According to the export data collected by NAWFR from exporters and customs information in both North America and Europe show that wood pellet, it says shipments have increased practically every quarter for four years up from 130000 tons in the 1Q/08 to almost 600000 ton in 4Q/12. Pellet producers in British Columbia have been the major exporters since the first shipments 2 years ago but this changed in the scond half of 2011 when expanded investments in new capacity in the US South put US shipments on par with Canada. In 2012, small increases in volumes from both the U.S. and Canada will likely occur, with more significant export growth due in 2013. At that time, new export-oriented pellet plants now being constructed are scheduled to begin operations However, in Eastern Canada exports in the 4Q/11 remained unchanged from the previous quarter when volumes decline primarily due to the closure of the Enligna pellet plant in Nova Scotia. It is expected that these plants to restart the idled plan later this year by a new owner. Contact Information Wood Resources International LLC Hakan Ekstrom (info@wri-ltd.com) www.woodprices.com INDUSTRIAL WOOD PELLET INDUSTRY IS SUSTAINABLE AND CARBON NEUTRAL By Seth Ginther | April 05, 2012 Wood resources for bioenergy, specifically industrial wood pellets, are carbon neutral. When used for energy, the release of carbon into the atmosphere never exceeds the amount of carbon that was absorbed during the life of the tree. In fact, trees in their growth phase absorb carbon at a faster rate than older, mature trees and this is particularly true for forests in the Southeastern U.S., where the climate is warm and conducive to faster growth. The U.S. Southeast is actually home to some of the most robust forests in the world, where many species naturally propagate multiple tree saplings for every one tree harvested, which means more carbon sequestration overall. Well-managed forests that provide raw materials for the industrial pellet industry and other forest products continue to have positive growth-to-drain ratios (greater than one) where forest growth exceeds harvests and carbon absorption rates increase year after year. The practice of sustainable rotational harvesting means that there will be a continuous cycle of new growth in the forest.Moreover, trees in their growth phase absorb carbon at a faster rate than older, mature trees. Accordingly, the practice of sustainable rotational harvesting means that there will be a continuous cycle of new growth of the forest. Managed forests have trees of various ages and species, sequester more carbon than older growth stands, and continually accumulate carbon and maintain stable carbon stocks. Indeed, the regular removal of woody biomass maintains and improves a forest’s health. It improves wildlife habitat and biodiversity; it gives forest stands the light needed to not only survive, but thrive. The majority of forestland in the Southeast U.S. is owned by small forest owners, who have owned their land for generations and live on the revenue it generates. Strong timber markets ensure that these land owners will maintain their forests as forests and not sell or convert. If forest landowners see new markets (e.g. bioenergy from industrial wood pellets) for the trees they are growing, they will respond by growing more. Finally, the wood pellet industry is one of the few growing industries in today’s challenged economy. It provides direct manufacturing jobs and indirect supply chain jobs in rural areas, an economic channel for forest/land owners, and wood pellet export is helping to rebalance the U.S. trade deficit. The industry model is founded on sound, sustainable forestry practices, without which the industry could not and would not succeed or survive. Author: M. Seth Ginther Executive Director U.S. Industrial Pellet Association (804) 771-9540 www.theusipa.org FOREST CERTIFICATION: OPPORTUNITY AND CHALLENGE FOR THE WOOD PELLET INDUSTRY Forest certification standards are increasingly important in the pellet industry, but can be confusing to producers and customers alike By Scott Berg and Ron Lovaglio | April 05, 2012 The surge in energy costs, the new direction toward renewable energy sources, and European initiatives to limit carbon emissions all have created a tremendous opportunity for North American wood pellets. In the wood products industry, however, you can’t go very far without hearing the word green. Customers are demanding assurances that the wood products they buy are from legal and sustainable sources. And they often purchase with a preference or requirement for wood products that are independently certified to a recognized forest certification standard. But forest certification is an alphabet soup of standards, claims and labels, all of which can be confusing and overwhelming to those in the pellet industry who have other demands on their time. Thankfully, help is available from standard-setting organizations, trade associations and consultants. Demand for Pellets RISI projects that by 2014, demand for North American wood resources for pellet production will grow to around 30 million green tons. In 2008, more than 80 percent of U.S. pellets were used domestically, while 90 percent of Canadian pellets were exported to Europe, according to the U.S. Forest Service. Interest in North American pellets continues to grow because of constrained wood supplies in Europe and regulatory mandates to increase the use of renewable fuels. Because wood pellets are cheaper than solar and wind power, demand for them is expected to explode. The use of wood for pellets, however, is causing concern among environmental activists, government agencies and competing sectors of the forest and paper industries. A study by a team of environmental organizations, including the National Wildlife Federation and the Southern Environmental Law Center, says the atmospheric impact of biomass production, at least in the short term, is not carbon neutral. But a number of studies argue otherwise. While early domestic pellet demand was mostly bags for fireplace inserts and free-standing stoves, bulk delivery is increasing with greater demand for industrial boiler feedstock. In Europe, bulk deliveries to electric power plants are common, as power generators are under pressure to increase their use of renewable fuels by up to 20 percent. Pellets are an excellent supplement to coal in power plants and can reduce carbon emissions by about 15 percent without disrupting current power plants and industrial processes, according to the February study “Biomass Supply and Carbon Accounting for Southeastern Forests.” With about half of the electricity in the U.S. produced by coal plants, a domestic switch to wood pellets represents another huge market opportunity. Certification As with any fuel source, customers want to know where the feedstock comes from and if it is sustainable. Third-party certification is a valuable tool to reassure them that pellets come from sustainably managed forests, eliminating the need to continually justify that the resource is renewable. It is a growing criterion for export to Europe, where numerous policies mandate renewable energy production. The Sustainable Forestry Initiative, American Tree Farm System, Forest Stewardship Council, and Program for the Endorsement of Forest Certification are the largest forest certification standard organizations and systems in the world. SFI and FSC are recognized in the U.S., while FSC and PEFC have solid reputations in Europe. Moreover, PEFC recognizes the SFI and American Tree Farm Standards as criterion for its Chain of Custody program. All major certification programs include chain-of-custody standards and land management standards. The latter require protection of water, wildlife, visual quality, special sites and other important resources. Chain-of-custody standards allow consuming mills to track wood inputs back to independently certified forests. All programs mandate compliance with national laws and regulations, as well as different balances between social, environmental and economic considerations. About 19 percent of U.S. commercial forestland is certified to three major U.S. standards, but certified lands are not evenly distributed. Most are located in the lake states, in the midst of large state and county public ownerships, while the majority of forestlands in the south are owned by small private family owners and are not widely certified. The challenge for the U.S. in general is the roughly 10 million fiercely independent family forest owners who own 60 percent of the forest land. SFI incorporates a third approach to its standards: the certified sourcing claim, by which consuming mills that procure wood can also be third-party certified to use the SFI claim and label. While not a chain-of-custody certification, the certified sourcing procurement standard requires promotion of sustainable forestry with those that own the forests, but does not require that landowners undergo separate third-party audits of their forests. To make a chain-of-custody claim where certified and uncertified wood is mixed together, the uncertified portion of the wood supply must be from sources that meet the respective FSC controlled wood and/or the SFI and PEFC noncontroversial criteria. The FSC controlled wood standard dictates five categories that must be avoided: illegally harvested wood; wood harvested in violation of traditional or civil rights; wood harvested in forests where high conservation values are threatened by management activities; wood harvested in forests being converted to plantations or non-forest use; and wood harvested from forests that contain genetically modified trees. Claims and Labels The home or bagged pellet market offers a real opportunity to prominently affix an on-product label to packages. That creates, in theory, demand pull where discriminating consumers look for the certified pellets the next time they shop. The most common on-product labels are attractive and help communicate certification efforts to the customer. Each standard has rules for the use of its trademarks and labels. Wood products customers have adopted procurement policies seeking to weed out wood that is not legally sourced or from sustainably managed forests. The European Commission recently adopted a regulation that will require operators, including importers, to exercise due diligence to assure legality. “Certification has been one of the tools to encourage the sustainability of forest management and allow consumers to discriminate positively in favor of wood products originating from sustainably managed forests,” reads a statement from the European Commission. But some customers do not understand the different and often competing certification standards. It is also understandable that pellet manufacturers don’t know where to start and are equally confused by the array of standards, claims and labels. Many procurement policies support major certification schemes to ensure maximum availability of certified wood inputs. Companies in other sectors of the wood and paper industry can attest that without substantial assistance, they would not be able to achieve certification in a timely and efficient manner. Because pellet manufacturers are in the middle of the supply chain between their customers and the wood supply base, it is critical to understand which certification standards are the best. So, what’s a pellet company to do to satisfy its customer base and ensure market access? Clearly, pellet producers need to take steps to address the new market realties dictated by the increasing demand for renewable, certified products. Certification Process Pellet producers interested in certification should first conduct an internal gap analysis addressing demand for certified product, type of certification needed (chain-of-custody or certified sourcing), availability of certified wood inputs, market opportunity to label product, and whether customers are willing to pay a premium for certified wood pellets. Next, producers need to compare their situation to the standards in order to determine which certification protocol best fits their objectives. Discussions with the standard-setting bodies, trade associations and specialized, experienced consultants can simplify the process. The U.S. wood pellet industry is no longer below the radar. While hurdles such as wood supply, transportation and markets still linger, certification removes consumer and environmental group concerns, perhaps before they even develop, and favorably positions the pellet industry squarely in the renewable clean fuel camp. Those pellet producers who get ahead of the learning curve have a better chance at being successful. Those who do not address customer concerns about the sustainability of the forest could face a number of jarring speed bumps along the way. Producers should ensure that they know more about forest certification issues and applicable standards, claims and labels than their customers do, and that they are prepared to assure customers that their wood pellets are legally and sustainably sourced. Authors: Scott Berg R.S. Berg & Associates, Inc. (904) 277-4596 RSBergAssoc@aol.com Ron Lovaglio Ron Lovaglio, LLC (207) 660-8561 RonLovaglio@roadrunner.com EUROPE'S 2020 EMISSION TARGETS AT RISK BY BIOMASS? Written by EurActiv.com Apr. 10, 2012 - In late March, the European Parliament for Brussels was told to reconsider its biomass emissions calculations, based upon the rapidly gaining traction argument from scientists, researchers and NGOs that biomass may not necessarily be carbon-neutral. According to an article on EurActiv.com, the movements against the carbon neutrality argument for biomass is gaining support at an extremely fast pace, including from EU officials. “It is wrong to assume that bio-energy is ‘carbon neutral’ by definition, it depends what you replace it with” Professor Detlef Sprinz, the Chairman of the independent Scientific Committee advising the European Environment Agency (EEA) told EurActiv. “If you replace a growing forest by energy crops under the current accounting rules of the EU, you may very well increase greenhouse gas emissions.” The article goes on to discuss about the feasibility of the European Union's desire to reduce emissions by 20 percent by the year 2020, and how it may not be as likely as everyone initially assumed by using biomass. This debate shows no sign of ending, in the EU or Canada, without substantially more data, but it is important for all biomass producers and exporters to be aware of. DONG TO SPEND $795 MILLION TURNING FOSSIL PLANTS TO WOOD By Louise Downing - Apr 11, 2012 7:41 AM CT Dong Energy A/S, Denmark’s state- controlled utility, plans to invest about 500 million pounds ($795 million) to convert three of its coal- and gas-fired power stations to generate heat and electricity from wood pellets. The Danish plants will have a capacity of about 1 gigawatt, said Thomas Dalsgaard, executive vice president and head of generation for Fredericia-based Dong, by phone yesterday. “If all goes well then we hope to decide on all the conversions in the first half of 2013 and then the construction phase will last between one to three years so that these three units will be converted by 2015,” Dalsgaard said. Denmark plans to cut its energy consumption by 12 percent by 2020 from 2006, it said March 28. It already gets 70 percent of its renewable-energy use from biomass such as straw, wood and waste. Lower taxes on biomass than coal and gas power generation encouraged Dong Energy to convert the plants. The decision on whether to proceed depends on securing environmental permits and long-term agreements with heating customers, Dalsgaard said. Dong, which owns 17 coal and gas- fired power plants, plans to lower carbon-dioxide emissions in power and heat production per energy unit produced to 15 percent of 2006 levels by 2040, according to its website. In 2010, 14.5 percent of the company’s power output came from wind energy. Biggest Hurdle The biggest hurdle for the conversions is sourcing biomass, Dalsgaard said. Dong currently uses about 1 million metric tons of wood pellets and 500,000 tons of straw a year at its Danish plants. The conversions would see the figure for wood more than double to 2.5 million tons a year, he said. Dong now sources most of its biomass from the Baltics, Poland and Russia and may begin buying materials from other areas including North America. Dong has also set up a unit to build bio-refineries. New Bio-Solutions is studying ways to turn agricultural residue and waste such as straw into gas and bio-ethanol, Dalsgaard said. Dong is developing a full-scale refinery in Denmark, and combining one of its power plants with the “world’s largest” anaerobic-digestion facility, owned by a third party, along with use of bioethanol and waste technology, Dalsgaard said. Anaerobic digestion breaks down materials in the absence of oxygen to make a biogas that can be used to generate power. A decision on whether to proceed with the project will be taken next year, with the proposed plant due to be working in 2015. Dong plans projects outside Denmark with partners and is looking to team-up with waste-management businesses in the U.K., as well as considering projects in the U.S. and Asia. “We’re also having dialogue with some of the oil companies that are eventually going to be the customers for biofuels, so it’s a broad range of partners we’re targeting and we’re having a dialogue with many of them,” Dalsgaard said. To contact the reporter responsible for this story: Louise Downing in London at Ldowning4@bloomberg.net To contact the editor responsible for this story: Reed Landberg in London at landberg@bloomberg.net PARTNERS CELEBRATE BIOMASS AT GRANT UNION Sandra Gubel Blue Mountain Eagle | April 11, 2012 9:05 a.m. JOHN DAY – Biomass is a hot subject at Grant Union Junior-Senior High School. It’s a “win-win-win-win,” according to partners in a biomass boiler project, newly installed in a building at the back of the campus. The facility uses locally produced wood pellets to heat the campus. “It’s a nice circle,” said Bruce Daucsavage of Ochoco Lumber Co., the parent company of Malheur Lumber Co. in John Day, where the pellet fuel is produced. Daucsavage noted that the operation uses local contractors and local forest products, which helps both forest health and economic health. Malheur Lumber has nine people on board when its biomass plant operates on two shifts. Daucsavage and others gathered at the school’s new biomass boiler April 6, where Andrew Haden of Wisewood Inc. touted the system’s reliability and neglible environmental impacts. The shift to biomass began last spring, when flooding swamped the campus. The ground sopped with water, Grant Union’s oil storage tank emerged from the ground. “The school took it as a sign,” Haden joked. School district officials first saw an opportunity to convert the oil system to propane, and then took a bigger step forward to biomass. Haden noted other recent projects have added biomass at the Grant County Regional Airport and Blue Mountain Hospital. “Biomass fits really well with communities that are dependent on electricity,” he said. “And it’s a stable fuel source that helps the local economy.” Superintendent Mark Witty said he realized it was time to do it. “Mark pulled a lot of things together pretty quickly,” said Haden. The new 2 million BTU per hour boiler went online March 14. The primary heat-producing system for the campus burns about one ton of pellets each day, and will use between 170-190 tons per year, depending on the weather. Propane is the secondary source. Northwest Thermal Systems Inc. of Estacada installed the biomass system. “This system doesn’t have the temperature fluctuations of propane. We haven’t seen any smoke coming out of the stack, it’s a very clean system,” Haden said. Malheur plant manager John Rowell noted the pellets have only about 4 percent moisture. At a time when the district is strapped for cash, the financial benefits were the key impetus, Witty noted. “We’re excited. We were paying $80,000 in oil per year,” he said. The energy bills are expected to decrease to around $30,000 per year. With “Cool Schools” grants through Clean Energy Works of Oregon, the district should see a $10,000 reduction in energy costs the first year. When data on Grant Union’s project is obtained, the district will receive another $25,000. A key to the project was the district’s ability to find a firm to buy Qualified Zone Academy Bonds, which financed the project. Sterling Bank agreed to do it, and receives tax credit. Grant School District 3 pays back the bonds at 0 percent interest. Witty lauded the work of local Sterling Bank manager Ethan Haney. Once the bonds have been paid off, the district should realize even further savings, noted Nerissa Lindenfelser, Wisewood assistant project manager. As part of the project, Malheur Lumber is donating $50,000 of free pellets for the first 10 years of operation. “I’m very pleased; this is a great system,” said school board member Tracie Unterwegner. “Mark Witty is to be commended for pulling the pieces together to make it affordable and economical, and something that will last a long time.” She also said, “Mark had many other things going on, and was dealing with the flood, yet he had the foresight to do this.” Daucsavage hopes other large consumers will also consider converting to biomass. “Obviously, we’re distressed that the school sustained flood damage. But,” he said, “we’re pleased with the solution.” “Being able to heat the school in a way that helps employ local people, that the system burns clean,” said Daucsavage, “to see a success like this, is really encouraging.” Read more on bluemountaineagle.com. © 2012 Blue Mountain Eagle INITIATIVE WOOD PELLETS BUYERS WORKS TO SMOOTH SUPPLY CHAIN DISRUPTIONS Posted on April 13, 2012 by Suz-Anne Kinney As the industrial pellet market in Europe absorbed excess supply caused by the fire at RWE’s Tilbury plant, new questions have arisen about pellet quality. According to Montel’s Weekly Biomass Report, “market chatter [during the week of April 2] is being dominated by a spat over the agreed specifications of industrial wood pellets between US suppliers and European buyers.” As events like the fire at the Tilbury plant illustrate, in order for the industrial pellet market to absorb excess supply caused by disruptions in the supply chain, consistent standards are required for both the physical specifications and the sustainability criteria. As a way of managing supply chain risk, major European utilities firing wood pellets in large power plants formed the Initiative Wood Pellets Buyers (IWPB): “All biomass-fired power plants rely on long-term contracts. When one of them needs to shut down unexpectedly, it is in the plant’s best interest to trade its wood pellet supply. Hence, contract forms and legal conditions must be harmonized to ensure appropriate trading conditions. In addition, technical specifications and sustainability requirements for wood pellets need to be standardized. The IWPB achieves all this in complete transparency.” Members include GDF Suez, RWE Essent, Dong, E.ON, Drax and Vattenfall among others; since June 2010, representatives from these companies and other affected parties have been meeting in working groups to discuss a uniform approach to the following issues: 1. The layout and conditions of the respective procurement contracts for wood pellets—according to the most recent minutes, which can be found here, a contracting strategy will be voted on at the next plenary session meeting on April 18 in London (see the minutes of the Feb. 27 meeting for details). 2. The technical specifications for the wood pellets product—The current working version of the standardized technical specifications can be found here (see link to IWPB-Industrial pellets specifications). 3. The Work Group on Sustainability has specifically addressed the fact that each IWPB member has its own sustainability standard, and therefore producers must meet different standards for each of the facilities it sells to. This lack of consistency makes it difficult for companies to trade with each other when supply gets tight or when downtime leaves shipments already headed to Europe without a home. As a result, the Work Group developed the following standards: A draft of the full document on sustainability principles applicable to wood pellets sourcing can be found at the IWPB website. The Work Group appears to have agreed that it will base its sustainability program around the Green Gold Label (GGL) that is currently being used by RWE. The GGL accepts certification under the following current schemes: Forest Stewardship Council (FSC), Pan European Forest Certification (PEFC), Sustainable Forestry Initiative (SFI), the Canadian Standards Association’s Sustainable Forest Management (CSA FSM) and the Finnish Forest Certification System (FFCS). The PEFC, it should be noted, accepts the American Tree Farm System (ATFS) certification scheme as well. Major US wood pellet producers—Georgia Biomass, Green Circle Bio Energy and Enviva already have GGL certification. The output of the IWPB working groups in these three areas of critical importance for US producers of industrial wood pellets. Founded in early 2011 specifically to represent US makers of industrial pellets, the US Industrial Pellet Association (USIPA) has been well represented in these meetings. Final documentation from each of the Work Groups is expected soon. USIPA Board member and Forest2Market’s VP of Marketing and Sales, Suzanne Hearn will keep us posted. WOOD BIOMASS MARKET REPORT BEGINS REPORTING PRICES FOR PREMIUM GRADE WOOD PELLETS BOSTON, MA, April 9, 2012 (Press Release) - RISI, the leading information provider for the global forest products industry, today announced that it has begun reporting on premium grade wood pellet pricing for the US market. First appearing in the March 2012 issue of Wood Biomass Market Report (WBMR), the new coverage includes monthly price averages in $US/ton, free on board (FOB) mill for a period of one year. The information is compiled from the RISI and Pellet Fuels Institute (PFI) Pellet Manufacturing Survey. "We believe the addition of this price coverage will assist producers in strategic planning at a time when margins are declining as a result of unpredictable raw materials availability and a saturated end product market," stated WBMR Editor William Perritt. "Both manufacturers and wholesale buyers of wood pellets are working diligently to control costs and expenditures against unstable transportation and woodfiber factors. For wholesalers and retailers, understanding the cost landscape and its impact on prices will translate into sounder procurement strategies." According to WBMR, US wood pellet prices peaked in December and entered their traditional slide going into spring early, due to unseasonably warm weather. Among all US regions, pellets averaged $169/ton in December - the high for the year period. "While the past year showed renewed strength in wood pellet sales versus the 2010-11 season," Perritt noted, "retailers sold volumes at muted price levels. Even though producers saw improved demand, they found themselves operating within tight margins given diesel cost increases and diminished raw material availability from traditional sawmill sources." For the pellet industry, WBMR also tracks average regional costs for incoming raw wood and provides a monthly discussion of market drivers compiled from interviews with industry leaders. Included in the price averages are categories for sawdust, chips and shavings as well as roundwood. WBMR subscription information may be found at http://www.risi.com/woodbiomass. About RISI (www.risi.com) Owned by UBM plc, which is listed on the London Stock Exchange, RISI is the leading information provider for the global forest products industry. The company works with clients in the pulp and paper, wood products, timber, biomass, tissue, nonwovens, printing and publishing industries to help them make better decisions. Headquartered in Boston, MA, RISI operates additional offices throughout North and South America, Europe and Asia. About UBM plc (www.ubm.com) UBM plc is a leading global company. We inform markets and bring the world's buyers and sellers together at events, online, in print and provide them with the information they need to do business successfully. We focus on serving professional commercial communities, from doctors to game developers, from journalists to jewellery traders, from farmers to pharmacists around the world. Our 6,000 staff in more than 30 countries are organised into specialist teams that serve these communities, helping them to do business and their markets to work effectively and efficiently. For Press Enquiries, please contact: Rich Sordahl Marketing Manager, News, Markets & Prices O: +1 781.734.8921 E: rsordahl@risi.com FUTUREENERGY: THE ECONOMICS AND RISK OF WOOD PELLET PRODUCTION FOR HEATING Tuesday, April 17, 2012 by DMUU Training Team When you think of heating sources, what comes to mind? For most Americans, oil, electricity and gas are the obvious choices. What about wood pellets? Wood-burning heat sources often conjure up images seen on “Little House on the Prairie”. However, in Europe wood pellets are in high demand as a home-heating option. Besides being more efficient and less taxing on the environment, European regulations encourage the use of carbon-neutral sources. This is great news for U.S. wood-pellet producers, who expect to see a sharp demand for their product over the next decade. FutureMetrics is one of the leading domestic experts in the economics of the production and use of renewable bioenergy. They, along with their partner Innovative Natural Resource Solutions, formed a new company, FutureEnergy Partners, to focus on the economics and risk of wood pellet production. Using @RISK, they performed risk analysis simulations to address some very critical concerns regarding the bright future of wood-pellet production: • How much wood is required to operate a wood-powered plant and produce the appropriate amount of wood pellets to keep up with demand? • How do they hedge their prices against global wood prices in a fashion that will allow them to turn a profit? In a very informative case study, FutureMetrics shared its use of Monte Carlo simulation to answer both of those questions and secure a bright (and warm) future for U.S. wood pellet producers. It will be interesting to see if the U.S. moves towards alternate heating sources, such as wood pellets. If so, we’re sure @RISK can offer the kind of clear risk analysis necessary to make it both possible and profitable. THE PENDING SUBSIDY CLIFF, AND THE WAY OUT By Steve Leone, Associate Editor, RenewableEnergyWorld.com April 19, 2012 | Comprehensive report offers blueprint to put American renewable energy policy on a sustainable track New Hampshire, U.S.A. -- It's a daunting reality, yet one that's been years in the making. And it's a scenario that's shaping up from the wind-swept coasts of California to the solar rooftops of New Jersey. The renewables industries — all of them — are not only approaching a subsidy cliff. They already have one foot dangling over the edge. These cliffs are seen as a part of the renewables landscape, and the hope has been that the perceived drop would be too steep for lawmakers to ignore. In the past, that’s been a successful strategy, but the new state of politics dictates that subsidies will be phased out. Though some may yet be extended for at least the short-term, we’re likely entering a new era of energy policy in the United States. A new report, “Beyond Boom and Bust,” by policy leaders at the Breakthrough Institute, the Brookings Institution and the World Resources Institute, details the subsidy collapse that has already begun in the U.S., and it lays out a blueprint for a long-term approach that deconstructs the fits and starts that have become the norm. The report is especially well-timed as the renewables industries head into a period of uncertainty magnified many times by the posturing that comes with presidential elections. The numbers, though, are real and they mostly point one way. In 2009, backed by ample stimulus funding and solid political support, federal clean tech spending, including everything from energy to electric vehicles, reached $44.3 billion. That spending has dropped steadily to an estimated $16 billion this year. By 2014, the federal government will spend $11 billion, or about a quarter of what it did five years earlier, on clean technologies. This is a problem, write the report authors, because this drop has not coincided with a comprehensive new energy approach — one that aims to lower costs of energy with clear requirements and predictable policy. And it has not included a phase-out of fossil fuel subsidies that long ago matured past the point where they needed federal support. The other side of reform, the one that gets far fewer headlines, is in the amount of money invested in research and development, an area of the clean energy sector that has been woefully underserved in recent years. The following is a breakdown of key points and suggestions made by the authors as they envision a blueprint for a new energy strategy. Policy Reform Current policy has enabled greater capacity, and that has in turn allowed processes to scale-up. But what do you have when the policies go away? Right now, you’d have technologies that except in rare cases cannot compete dollar for dollar against low-cost options like natural gas. The problem, the authors say, is that the policy mechanisms haven’t demanded that the technologies bring their costs down to levels that compete with fossil fuels. This is kind of like the current flat production subsidies given to support certain crops. An example of this would be the Production Tax Credit that has fueled explosive growth in the American wind industry. The credit gives 2.2 cents per kWh generated, and that figure has only been readjusted to reflect inflation. A more demanding policy structure that forces a downward trajectory in pricing would better force companies to meet targets — or risk losing that policy support. “We would favor some kind of extension of the PTC,” said Mark Muro, a policy analysts at the Brookings Institution. “At the same time, some predictable downramp would extend the wind industry’s competitiveness.” Muro realizes this isn’t an easy time to be having this discussion. The wind industry in particular has a lot of political backing, but dwindling hopes that an extension can get done before the end of the year. The outlook may drive the industry from as much as 9,500 MW installed in 2012 to 500 MW in 2013. “The wind industry is a sophisticated industry with lots of success and lots of people who understand the value of competing on price, and I think they’d be willing to look at these ideas. There’s a readiness to address some of these issues.” According to the report, subsidies should be reconfigured to meet stringent, yet consistent new measures. The report makes several specific suggestions in which the authors say new policies should do the following: • Create market incentives that demand — and reward — technology performance and cost. • Set policies that decline as technologies improve in price and performance. They should be terminated if certain types of technology fail to improve on price and performance, or if they achieve the goal of becoming competitive without support. • Open opportunities for technologies at all stages of development. Technologies with a similar level of maturity should be allowed to compete amongst themselves to determine which is best suited to move forward. • Ensure that the process is clear, transparent and predictable for many years down the road. The uncertain and short-term nature of current policy does as much to hinder investment as the cost considerations. Strengthen Innovation The policy piece that’s been largely missing from American clean energy strategy is research and development. This have been a fundamental element for the growth of military technology, the space program and medical sciences. But it’s been conspicuously absent as a major driving force for renewables. The lack of research, development and deployment (RD&D) funding really starts in the private sector, where U.S. energy firms reinvest about 1 percent of their revenues. In the information technologies, semiconductor and pharmaceutical industries, these numbers usually run between 15 and 20 percent. The federal government isn’t doing much better in this respect. In 2012, federal RD&D spending will fall below $4 billion. That compares unfavorably with the levels of early funding received by NASA ($19 billion), health research ($33.5 billion) and defense ($80 billion). Even pushing energy related RD&D funding to $15 billion would have profound effects. This may be an area with political common ground. Republicans who have been against the government “picking winners and losers” are usually quick to respond that federal investment should come in the research phase of new technologies. Below are some of the recommendations for rethinking RD&D funding for clean energy techologies: • Funding in clean energy shouldn’t end once they reach subsidy independence. The emergence of shale gas shows how persistent research can lead to continued breakthroughs. • Spanning the “Valley of Death” for both technology and commercialization remains a critical obstacle. This is when funding usually dries up, yet on the other side is when significant breakthroughs can emerge. • The DOE loan program should be replaced by the Clean Energy Deployment Administration, which would leverage private finance to support entrepreneurs with innovative technologies. • A National Clean Energy Testbed should be established on public lands to give pre-permitted, grid-connected space for emerging technologies to blossom without the hassles typically involved with demonstration projects. • Harness advanced manufacturing in the U.S. Innovation suffers when it is divorced from the manufacturing process. So, there’s a natural investment to realign these two industry forces. • Invest in education, from grade school through graduate school. And then work to employ the international students who come for an education but leave because of immigration barriers. Bioenergy, Geothermal Energy, Hydropower, Solar Energy, Wind Power GREENHOUSE USES CAPTURED CO2 TO GROW FOOD Carbon-capture-and-storage technology a joint venture of SunSelect Produce and Dutch energy company Procede By Gordon Hamilton, Vancouver Sun April 21, 2012 A B.C. greenhouse grower and a Dutch energy company have developed a new carbon-capture-and-storage technology that relies on the natural need of plants for carbon dioxide to transform carbon contained in biomass into food. SunSelect Produce Inc. and Procede BV say their carbon-capture-and-storage system is the first commercial operation of its kind in the world to convert the carbon in biomass into fertilizer for food. The technology is designed to heat greenhouse operations with low-cost biomass, filter emissions, capture the carbon dioxide and feed it to the growing plants as a natural air-borne fertilize, said Victor Krahn, chief executive officer of the joint-venture company, ProSelect Gas Treating. SunSelect Produce unveiled the technology Friday at its 17-hectare Delta greenhouse complex. "We are taking the carbon and instead of letting it go into the atmosphere, we are converting it to food and eating it," Krahn said. "We are eating our way to a carbon-negative future." Plants need carbon dioxide, light and heat to grow and the more CO2 they can absorb, the more productive they are, Krahn said. The technology uses a patented organic liquid to remove the C02 from the exhaust gas stream of the greenhouse biomass burner. The liquid is then heated, releasing the pure CO2 into the greenhouse for the plants to use. Krahn said SunSelect's Delta greenhouse is the first one in the world to have an operating carbon-capture-and-storage system. It removes five tonnes of carbon an hour from the facility's biomass burner and recycles it for the carbon-hungry peppers SunSelect grows. "The system is viable. We feel fantastic about it," Krahn said. The innovative carbon-capture-and-storage system cost $5 million to develop. The joint venture partners received $2.24 million from the British Columbia Innovative Clean Energy Fund and $1.72 million from Sustainable Development Technology Canada. Krahn said SunSelect switched from natural gas to biomass as a source of heat for its greenhouse several years ago when natural gas prices spiked. A critical element in the success of the program is that by using biomass, which is considered a renewable energy source, to replace natural gas, a fossil fuel, SunSelect is able to sell its carbon credits through Offsetters, a B.C. organization that certifies greenhouse gas emission reductions by businesses, and buys and sells the resulting credits on B.C.'s carbon market. "That offsets 10 per cent of the capital costs of the equipment," Krahn said. "And that's revenue that comes in every year." Linda Delli Santi, executive director of the B.C. Greenhouse Growers Association, said the industry is always looking for innovative technologies that can help it compete against growers in jurisdictions that are not faced with high heating costs. She said carbon dioxide contained in emissions from natural gas is now being recycled into plants by the B.C. greenhouse sector. A cost-effective system of removing carbon dioxide from biomass could lead to a decreased use of natural gas as a heating fuel in greenhouses, she added. B.C.'s vegetable greenhouse growers employ about 3,800 people and grossed $245 million in 2011. About 90 per cent of the province's greenhouse acreage is in the Lower Mainland. ghamilton@vancouversun.com Blog: vancouversun.com/resources © Copyright (c) The Vancouver Sun Read more: http://www.vancouversun.com/business/Greenhouse+uses+captured+grow+food/6497370/story.html#ixzz1t3qT5bmX DAIGLE OIL COMPANY BEGINS BULK PELLET DELIVERIES IN MAY 16 April 2012 FORT KENT- Daigle Oil Company (DOC) is pleased to announce that it will offer bulk pellet delivery service, branded as DOC Bioheat, to customers in Aroostook and Penobscot Counties starting in mid-May. The addition of bulk pellet fuel to the company's energy mix demonstrates their commitment to keeping up with customer demand in an ever-changing industry. DOC's President, Dan Vaillancourt explained, "The addition of bulk pellets will allow us to provide a convenient delivery service and sell a product that is efficient, easy to use, renewable and 100 percent natural. We foresee a surge in the renewable energy industry and anticipate this segment of our business to grow." DOC has been a biomass heating system resource in the area for thirty-five years selling and servicing appliances such as wood boilers, pellet boilers and pellet stoves. No longer known as just an oil company, DOC has diversified their business by offering alternatives such as solar hot water systems, geothermal installations and DOC Propane for their customers. In addition to the bulk pellet fuel (DOC Bioheat), customers considering pellet options will also be able to purchase a variety of bulk storage systems for either home or business use. Vaillancourt explained that the pellet delivery process will be convenient for the customer, eliminating the need to handle heavy 40 pound bags and reducing the amount of times the storage tank will need to be filled. He indicated that the bulk pellets will be delivered to homes or businesses from a truck specifically designed for pellet delivery. Owners Rick Daigle and Vaillancourt are eager to start the truck on the delivery route in May and anticipate it will be ready to make a public debut at the upcoming Biomass Fair being held May 19, at Gentile Hall on the UMPI campus. They also encourage customers interested in learning more about DOC Bioheat prior to the fair to call or stop by their local DOC Heating Center. Daigle Oil Company is Northern and Central Maine's trusted energy resource providing residences and businesses with a range of products and services. DOC Heating Centers deliver oil, kerosene, DOC Propane, gasoline and diesel; install and service heating and cooling systems; and sell alternative heating options including wood and pellet boilers, pellet stoves, geothermal and solar systems. DOC also operates DOC's Place motor fuel locations in Madawaska, Fort Kent, Caribou, Presque Isle, Houlton, Lincoln and Bangor as well as Gentle Bear car washes. INITIATIVE WOOD PELLET BUYERS WORKS TO SMOOTH SUPPLY CHAIN DISRUPTIONS Posted on April 13, 2012 by Suz-Anne Kinney Rate This As the industrial pellet market in Europe absorbed excess supply caused by the fire at RWE’s Tilbury plant, new questions have arisen about pellet quality. According to Montel’s Weekly Biomass Report, “market chatter [during the week of April 2] is being dominated by a spat over the agreed specifications of industrial wood pellets between US suppliers and European buyers.” As events like the fire at the Tilbury plant illustrate, in order for the industrial pellet market to absorb excess supply caused by disruptions in the supply chain, consistent standards are required for both the physical specifications and the sustainability criteria. As a way of managing supply chain risk, major European utilities firing wood pellets in large power plants formed the Initiative Wood Pellet Buyers (IWPB): “All biomass-fired power plants rely on long-term contracts. When one of them needs to shut down unexpectedly, it is in the plant’s best interest to trade its wood pellet supply. Hence, contract forms and legal conditions must be harmonized to ensure appropriate trading conditions. In addition, technical specifications and sustainability requirements for wood pellets need to be standardized. The IWPB achieves all this in complete transparency.” Members include GDF Suez, RWE Essent, Dong, E.ON, Drax and Vattenfall among others; since June 2010, representatives from these companies and other affected parties have been meeting in working groups to discuss a uniform approach to the following issues: 1. The layout and conditions of the respective procurement contracts for wood pellets—according to the most recent minutes, which can be found here, a contracting strategy will be voted on at the next plenary session meeting on April 18 in London (see the minutes of the Feb. 27 meeting for details). 2. The technical specifications for the wood pellets product—The current working version of the standardized technical specifications can be found here (see link to IWPB-Industrial pellets specifications). 3. The Work Group on Sustainability has specifically addressed the fact that each IWPB member has its own sustainability standard, and therefore producers must meet different standards for each of the facilities it sells to. This lack of consistency makes it difficult for companies to trade with each other when supply gets tight or when downtime leaves shipments already headed to Europe without a home. As a result, the Work Group developed the following standards: Missing see below: A draft of the full document on sustainability principles applicable to wood pellets sourcing can be found at the IWPB website. The Work Group appears to have agreed that it will base its sustainability program around the Green Gold Label (GGL) that is currently being used by RWE. The GGL accepts certification under the following current schemes: Forest Stewardship Council (FSC), Pan European Forest Certification (PEFC), Sustainable Forestry Initiative (SFI), the Canadian Standards Association’s Sustainable Forest Management (CSA FSM) and the Finnish Forest Certification System (FFCS). The PEFC, it should be noted, accepts the American Tree Farm System (ATFS) certification scheme as well. Major US wood pellet producers—Georgia Biomass, Green Circle Bio Energy and Enviva already have GGL certification. The output of the IWPB working groups in these three areas of critical importance for US producers of industrial wood pellets. Founded in early 2011 specifically to represent US makers of industrial pellets, the US Industrial Pellet Association (USIPA) has been well represented in these meetings. Final documentation from each of the Work Groups is expected soon. USIPA Board member and Forest2Market’s VP of Marketing and Sales, Suzanne Hearn will keep us posted. NEW SURVEY SHOWS AMERICANS DON’T SUPPORT BIOMASS ENERGY Concerns About Air Pollution And Water Use By Biomass Power Plants Pelham, Mass. – Americans of all political persuasions agree that the United States should move away from its reliance on dirty energy sources that foul the air and water and toward a future that makes greater use of clean energy sources, according to a major new ORC International survey released today by the nonpartisan Civil Society Institute (CSI). Releasing the survey jointly with dozens of other groups across the nation is the Partnership for Policy Integrity, a science-based advocacy organization that supports local, state and national groups in opposing “false energy solutions” such as biomass power plants that rely on forest harvesting for fuel. “The survey shows that more than 81% of Americans across the political spectrum believe that biomass energy should be used only after less polluting and water-intensive options are explored” said Dr. Mary Booth, Director of the Partnership for Policy Integrity. “Biomass power emits more greenhouse gases and particulate pollution than coal, and large-scale biomass power plants require about a million gallons of freshwater a day for cooling. Americans don’t want to subsidize so-called renewable energy that cuts forests, worsens air pollution, drains rivers and makes climate change worse – they want truly clean solutions”. Civil Society Institute founder and President Pam Solo noted“This new survey is a clarion call to action: Americans think that it is time for decisive action toward a renewable energy future that will protect public health and provide reliable and cost effective energy. And it is only through a grassroots-driven process that we can shake off the gridlock of Washington, D.C., so that Americans can focus on what is really important to them: a clean energy future that does not sacrifice our water, air and health.” Key findings of the new ORC International survey, conducted March 22 – 25, include: • A majority of Americans (81%) think the other energy producing options should be explored first before biomass energy production is explored. Only fourteen percent are in favor of proceeding with biomass energy production before other options are explored. • Two thirds of Americans (67 percent) think that “political leaders should help to steer the U.S. to greater use of cleaner energy sources – such as increased efficiency, wind and solar – that result in fewer environmental and health damages.” Less than a third of Americans (30 percent) think that “political leaders should stay out of the energy markets and let private enterprise have a free hand in picking energy sources and setting prices.” • Eight out of 10 Americans agree that “water shortages and the availability of clean drinking water are real concerns. America should put the emphasis on first developing new energy sources that require less water and result in lower water pollution. “Only 15 percent of Americans think that “America should proceed first with developing energy sources even if they may have significant water pollution and water shortage downsides.” For the full survey findings and methodology, go to http://www.civilsocietyinstitute.org/media/042512release.cfm A factsheet on biomass power impacts can be viewed at http://www.pfpi.net/wp-content/uploads/2012/04/PFPI-biomass-factsheet.pdf EDITOR’S NOTE: A streaming audio replay of the news event will also available on the Web at http://www.CivilSocietyInstitute.org as of 5 p.m. EDT on April 25, 2012. PELLET PLANT FACING OSHA FINE ON FIRE Ruling issued as blaze hits in Jaffrey again Posted: Saturday, April 28, 2012 8:30 am | Updated: 8:45 am, Sat Apr 28, 2012. By Casey Farrar Sentinel Staff | 0 comments JAFFREY — A federal agency found serious workplace safety violations at the time of a Jaffrey wood pellet manufacturing plant fire last year, a report released Friday said. Now Jaffrey-based New England Wood Pellet is facing up to $147,000 in fines from citations stemming from the Oct. 20, 2011, fire, the Occupational Safety and Health Administration announced Friday. “While it is fortunate that no one was killed in this conflagration, there is no excuse for the employer’s failure to effectively minimize and address clearly recognized hazards that could kill or disable workers in a catastrophic incident,” said Rosemarie Ohar, OSHA’s area director for New Hampshire, in a statement. The agency’s report was released just hours after a dozen area fire companies responded to a three-alarm blaze at the Old Sharon Road manufacturing plant Friday at about 2 a.m. It’s the third fire at the plant since August 2008. Company officials said Friday’s fire was caused by sparks after one of the pellet mills had a mechanical malfunction. Jaffrey fire officials said Friday the cause of the fire was not determined, but the blaze was contained to a portion of the manufacturing floor called the cooler, where newly pressed pellets are cooled before being bagged. Federal workplace safety officials have opened a new investigation as a result of Friday’s fire, said Ted Fitzgerald, a spokesman for OSHA. According to the inspection report stemming from October’s fire, the flames in that blaze led to a series of explosions in the plant. “The fire, which started in the pellet mill, was transported through several conveying systems to a pellet cooler and then to a dust collector, and caused several other flash fires,” an OSHA news release said. “Shortly thereafter, explosions occurred in the dust collector and an exhaust muffler. “The explosions sent fireballs outside of the building and likely ignited materials in two silos.” Without the required protective devices in the pellet transport system, dust collection duct and conveyor systems, sparks and embers are able spread throughout the system, officials said. The system’s design also doesn’t meet standards for explosion prevention, officials said. That problem was made worse during the last fire by a buildup of wood dust throughout surfaces in the plant and the use of unsafe electrical equipment to vacuum combustible dust, officials said. The company was issued fines totaling $140,000 for two “repeat” citations — issued when an employer has previously been cited for the same or similar violation — for failing to provide a workplace free of fire and explosion hazards and for using unapproved vacuum equipment, officials said. A “serious” citation was also issued for the buildup of dust on surfaces, which carries a proposed $7,000 fine, officials said. The company has 15 days to comply, meet with OSHA officials or contest the findings before the agency’s review commission. Company officials are scheduled to meet with OSHA officials next week, Fitzgerald said. In 2008, the company reached a settlement with the agency on more than $135,000 in fines stemming from 12 safety violations issued before the 2008 fire. Company officials did not return a call for comment Friday afternoon about the agency’s findings. Casey Farrar can be reached at 352-1234, extension 1435, or cfarrar@keenesentinel.com. ITALY’S INCREASING DEMAND A ra Written by Gordon Murray Here are five fun facts about Italy: • Rome is farther north than New York City • The average Italian consumes 26 gallons of wine per year. • Italy did not become a country until 1861. • Italy imports over 75% of its energy. • Italy is the world’s fastest growing market for residential wood pellets. I was recently in Italy for a Canadian wood pellet trade mission and attended the International Pellet Forum in Verona where I noticed that this country presents a great opportunity for Canadian wood pellet producers. To date, Canada has exported pellets primarily to Belgium, the Netherlands and the United Kingdom, which primarily use them in electrical power generators and co-fire with coal. However, Italy is an entirely different kind of market, where they are used almost exclusively for heat in homes, commercial enterprises and institutions. Most pellets are sold in 15-kilogram bags with very little bulk distribution, mainly for commercial enterprises such as hotels and institutions (hospitals and schools). Canada’s first year exporting to Italy had only 10,000 tonnes shipped, which increased to 40,000 by 2011. Forty-eight percent of Italy’s energy is used for heat and the country aims to have 17% of that from renewable sources by 2020, up from 6.5% in 2010. Solid biomass is expected to make up half, with solar, geothermal and heat pumps providing the rest. In 2012, Italian wood pellet consumption is expected to reach 1.9 million tonnes and continue to increase at a rate of 400,000 tonnes per year, with only a small fraction produced domestically. From a peak of 750,000 tonnes in 2007, Italy now produces just 550,000 tonnes annually, 29% of its 2011 consumption. Italy would produce more pellets if not for competition for fibre by panel-board industry and other biomass sectors. Italy produces 550,000 tonnes of pellets from just nine million hectares of forest – a rate of 61 tonnes per 1,000 hectares – whereas Canada produces 1.5 million tonnes from 397 million hectares, a rate of just four tonnes per 1,000 hectares. If Canada could reach the same production rate, it would produce 23 million tonnes of pellets per year. Because Italy produces just a small fraction of its pellet needs, the country’s imports have escalated from 472,000 tonnes in 2009 to 1.2 million tonnes by 2011. Italy imports from: • Austria 32% • Eastern Europe 26% • Other EU countries 19% • Germany 13% • France, Spain and Portugal 5% • Non-European countries 4% • Canada 1% In 2011, an estimated 188,000 stoves and 20,000 pellet boilers were sold in Italy. Its market distribution is about 90% stoves and 10% boilers, with the rest of Europe split 50/50 at 300,000 units of each sold annually. Therefore, Italy accounts for almost two-thirds of European stove sales. Here are a few more facts about the Italian pellet market: • EN Plus certified pellets are gaining market share. • Italians prefer light coloured pellets. • Austrian exporters to Northern Italy are delivering bagged product to distributors for 220 euros per tonne in winter and 190 euros per tonne in fall and spring. • Canadians have exported bags in containers and bulk shipments, whereas Italians only use bagged pellets, a measure that has proven more cost effective for them. • Canadian exporters have reported success in selling to two companies – Adriacoke and Abellon. Both companies have bagging operations and extensive distribution networks, but there are other interested importers. • It is likely unwise to export to more than two or three Italian customers, as exporters run the risk of multiple distributors competing to sell the same product to the same end consumers, thus driving prices down. It is clear that the Italian market presents a very good opportunity for Canadian wood pellet exporters and a means of diversifying the risk of being overexposed in the western European power markets. ________________________________________ Gordon Murray is executive director of the Wood Pellet Association of Canada. He encourages all those who want to support and benefit from the growth of the Canadian wood pellet industry to join. Gordon welcomes all comments and can be contacted by telephone at 250-837-8821 or by e-mail at gord@pellet.org.