The US Energy Information Administrations reports that wood pellet exports from the United States nearly doubled last year, from 1.6 million short tons (about 22 trillion Btu) in 2012 to 3.2 million short tons in 2013. More than 98% of these exports were delivered to Europe, and 99% originated from ports in the southeastern and lower Mid-Atlantic regions of the country.
European countries, particularly the UK, are using wood pellets to replace coal for electricity generation, a key driver being the European Commission's 2020 climate and energy package, binding legislation enacted in 2009 that implements the EU's "20-20-20" targets, the EIA notes.
Wood pellets are traditionally manufactured from wood waste (including sawdust, shavings, and wood chips) that results from wood processing activities, but they can also be produced from unprocessed harvested wood (generally at a higher cost), the EIA says.
Growth of US wood pellet exports has been concentrated in the south eastern states because of abundant material supply and relatively low shipping costs to Europe. Transportation cost is a large part of the total cost of wood pellets, estimated to account for about 25% of the delivered price of wood pellets going from the south east of the USA to the Netherlands in mid-2013. The proximity of the USA to Europe relative to wood pellet manufacturers in Brazil and western Canada provides a pricing advantage for US wood pellet exporters.
In 2013, the top five importing countries for US wood pellets were the UK, Belgium, Denmark, the Netherlands, and Italy. The UK accounted for 59% of US wood pellet exports, and more than tripled its imports from the USA between 2012 and 2013.
The UK's wood pellet imports from all sources have grown from near zero in 2009 to more than 3.5 million short tons in 2013. Driven by the UK's Renewables Obligation regime, the operators of several large coal-fired power plants have either retrofitted existing units to cofire biomass wood pellets with coal or have converted to 100% biomass. Drax, the largest coal-fired power plant in the UK, has been operating one of its six units on 100% biomass since last year.
According to Eurostat, the UK is also a major importer of wood pellets from Canada and, to a lesser extent, from other European sources. Until 2013, Canada was the primary source of the United Kingdom's import supply.
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