Wood Bio Conference Sets The Pace





Great wood energy presentations and great food functions dominated the eighth Wood Bioenergy Conference & Expo held March 12-13 in the Grand Ballroom North of the Omni Atlanta Hotel at Centennial Park. More than 200 people participated in the conference, which included presentations from 22 experts and showcased 50 technology and supply exhibits.

“I believe the depth and range of the presentations was the best we’ve ever had,” comments Rich Donnell, Co-Chairman of the event and Editor-in-Chief of Wood Bioenergy magazine, which served as co-host along with Georgia Research Institute. The theme of the conference going in was “Energy That Works,” but Donnell added that it could have been “On The Ground & In The Air,” referencing speeches on timberlands and aviation fuel, with a healthy dose of wood pellets and heat energy in the mix.

“The speakers did a great job of putting their fingers on the pulse of where the wood bioenergy industry is today and where it will go from here,” Donnell added.

Staying Focused

Leading off the first morning keynoters session, Fram Renewable Fuels President Harold Arnold, as he always has, sprinkled in some reality: “Biomass has a future but it’s not all rosy.”

Arnold is one of the pioneers of industrial wood pellets in the U.S., with Fram building its first pellet facility, Appling County Pellets, in 2007 in Baxley, Ga. Fram now operates three pellet facilities, including a recently modernized one, Hazlehurst Wood Pellets in Georgia.

Fram noted the benefits of wood pellets—sizing and drying wood fiber, changing the energy density, improving the transportability. And he also emphasized the factors that influence pellet consumption—weather, intermittent renewables, natural gas prices, worldwide energy crisis.

He said that upon Russia’s invasion of Ukraine in 2022 and ensuing sanctions, which lessened Russia’s supply of gas to European countries, natural gas and pellets for heating prices skyrocketed, while industrial pellets production jumped, only to see a warm winter, reduced demand and a pellet price nosedive. Meanwhile inflation caused pelleting costs to rise 30%, parts increased 100% in some cases, lead times increased on critical parts.

It didn’t get any better in 2023, with reduced generation and lessened demand, costs still not deflating and prices tanking. Meanwhile transportation bottlenecks surfaced in the Panama Canal and Suez Canal/Red Sea. Addressing 2024, Arnold said most producers are suffering economically, spot prices continue to slide, supply and demand are out of balance with warehouses full. Nevertheless, Arnold said, the industry remains eternally, and amazingly, optimistic, with new projects and new expansions announced.

Citing information provided by renown consultant William Strauss of FutureMetrics, Arnold said industrial pellet fuel markets could be nearly 55 million metric tons per year come 2030. Arnold pointed to good and growing markets in Japan and Korea, and a potential market in Taiwan. Another slide from FutureMetrics showed a potential global pellet demand (industrial and heating) of 85 million metric tons in 2030 and a possible shortfall of 35 million metric tons after production capacity.

Arnold briefly touched on new markets, but noted those opportunities are yet to be realized. As for now, Arnold said, “Producers are in trouble. Change is on its way.”

Biomass Is Sexy

No speaker had energy quite like Scott Dane, Executive Director of the American Loggers Council, who brought down the house with his declaration that “Biomass is sexy!” He told of how green initiatives such as SAF and reducing forest fuel loading to reduce wildfires have the attention of policymakers and corporate executives alike.

Dane noted that the bioenergy sector represents the greatest opportunity to expand the forest products industry and overall utilization, and to help replace current pulp log markets that are faltering in certain areas.

“Why don’t we have a national renewable portfolio like they have in Europe?” Dane asked, wondering if that means we’re really smarter—or not—than the rest of the world.

Dane also delivered a dose of realism to the assembled biomass project developers and managers who dream of sourcing woody biomass as feedstock for around $10-$20 a ton. Instead, he showed a chart that noted the investment required for one chipping crew is around $2.8 million.

“People think you just add a chipper, but the logs don’t jump into the chipper,” Dane said, also pointing to production costs such as $170 per hour each to operate a skidder, feller-buncher and loader and $400 per hour for a chipper, bringing total hourly production costs up to $910 per hour.

Once all the production costs are added in, including transportation, the actual cost of sourcing and delivering woody biomass is much closer to $35-40/ton, Dane said.

He stated that expanding the use of biomass for energy enables an opportunity to establish more collaborative relationships between biomass producers; and that longer term contracts with mutually protective costs causes can provide both ends of the supply chain with more stability and consistency.

“Otherwise, it is a merely a revenue stream, but not a sustainable profit center,” he said.

Changes Are Coming

“Next Highway to Growth?” was the subject for Nicholas Dottino, CEO and Chairman of the Management Board of Graanul Invest, the Estonia-based company that is Europe’s largest pellet producer with 11 pellet plants, six CHPs and four vessels in the Baltics, and in recent years started operation of its 12th pellet plant in Texas. The company overall has 2.8-3 million metric tons of production capacity.

He addressed industries where woody biomass could take center stage, offering a convenient and fossil-free substitute: BECCS, steel, food, cement, construction, chemical, SAF and more evolving. However, Dottino said the industry has been known to have illusions of grandeur.

“The industry has been more wrong than right.”

He said while 2020-2025 is a period of exploration and transition, the next 20 years will be a period of transformative change for the industry.

Dottino provided a list of questions: What markets are looking at wood pellets? Which can adopt instantly? Which need capex to adjust? Sustainability requirements? Paying capabilities? Competing fuels? Demand and possible hurdles? Timelines? Policies? Supporting large scale investment?

He said the promises of biomass are often distorted by reality, such as the promise of “only using sustainably sourced feedstocks,” and the reality that transparency, certification and low-risk sources are sometimes a third priority after price and volume, and that unsustainable/uncertified biomass is still being procured within subsidy allowances.

He said the market often works against sustainable practices and he pointed to slow progress in value chain and sustainability digitalization.

Dottino concluded: “White wood pellets still have a huge role to play in the next few decades when it comes to global decarbonization. We are the biggest white pellet producer in Europe today because that has been the most effective format for delivering our value to the end users.”

He was lukewarm on whether Graanul Invest will add wood pellet production capacity in North America, especially while the supply-demand situation remains cloudy.

Challenge Of SAF

Speaking of new markets, Alexander Koukoulas, Director/Bioindustry, AFRY Management Consulting, addressed the outlook for SAF and the potential impact on wood demand.

He said the confluence of science, policy and advocacy is driving the demand for biobased product, and in particular the point that if our fuels are biogenic in origin, and sustainably sourced, “We can actually decrease the level of atmospheric carbon using CCS technologies.”

Koukoulas referred to the SAF Grand Challenge Roadmap from the U.S. federal government—achieving a minimum of 50% reduction in life cycle greenhouse gas emissions compared to conventional fuel; enabling the scale-up of the production and use of SAF to 3 billion gallons by 2030; enabling scale-up of the production and use of SAF to 35 billion gallons to meet 100% of domestic aviation fuel demand by 2050.

But he added, the currently supply is only 160 million gallons.

He said there’s a range of eligible feedstocks (biofuel) with properties similar to conventional jet fuel, including forest and wood mill residues. And there are various technology pathways for transforming wood into chemicals and liquid fuels which can lead to SAF, most notably biochemical, thermochemical and hybrid, but it’s not an easy conversion.

He said baseline projections for air fuel demand is expected to be around 420 million tons by 2050. Currently, while SAF is available at more than 120 airports worldwide, aggregate production volume is about 500,000 tons, or 0.25% of total aviation fuel supply. But incentives are driving investments. And the aerospace industry is not standing still in technology advancements. And the world’s leading airlines are bullish on SAF.

“All heavy industries see biomass and especially wood residues as ‘low hanging fruit,’” Koukoulas said. But feedstocks of choice currently are non-wood such as vegetable oils and waste oils. Still, wood-based products could be disruptors accelerating the demand for wood residues.

The Big Project

Paul Oesterreich, Senior VP Project Development, Strategic Biofuels, spoke on his company’s intention to develop a series of negative carbon footprint plants in Louisiana that convert waste materials from sustainable forests into renewable transportation fuels. The ambitious project includes conversion of plantation pine forest thinnings into fuel, production of green power primarily from sawmill waste, capture of carbon dioxide emissions from those processes and its permanent geologic sequestration.

Oesterreich announced that the project, entitled Louisiana Green Fuels, at the Port of Columbia in Caldwell Parish, Louisiana, now has a new partner, Sumitomo Corp. of Americas, in a joint development agreement in which SCOA will take an anchor position and lead the formation of a Japanese-based investment consortium aimed at the funding the majority of development capital. The new funding influx has prompted Strategic Biofuels to change its primary renewable fuel product to SAF, and that SCOA intends to provide a 20-year offtake for the approximately 640 million gallons of renewable fuels produced as well as all state and federal renewable fuel credits.

He said achieving net carbon zero requires net carbon negative SAF to blend with carbon positive SAF at the ratio for example of three gallons of Louisiana Green Fuels SAF plus one gallon of Jet A to equal net carbon zero. He said the plant will use Fischer Tropsch biomass gasification and produce SAF plus naphtha at 32 million gallons per year. The air permit was issued last year.

He expects 1 million tons per year of plantation forest thinnings to feed the biorefinery and 1 million tons per year of sawmill waste for the biomass power plant, and he noted that 40% more tons of wood is grown per year than harvested in their supply area. With regard to CCS, he expects 1.36 million tons per year of CO2 from this project to be stored under the ground.

Oesterreich said the site is 327 acres with all land leased from the Port of Columbia. The project has received numerous infrastructure grants. Total project cost is $2.9 billion with commercial operation anticipated for 2028.

Oesterreich said Caldwell Parish is just the beginning as Phase 1, with Phase 2 adding at least two plant sites in southern Louisiana, Phase 3 with at least three more in the Southeast U.S. and ramping up to more than 480 million gallons per year of SAF.

He said SAF production provides a new use for forestry feedstocks, especially with the ongoing decline in demand for pulpwood.

Landowner Eyes

Looking at the potential uses of biomass from the perspective of a large landowner, Seth Walker, Senior Manager, Strategy for Rayonier, noted that roughly half of the world’s largest companies have made some sort of net zero commitment to greatly reducing or eliminating the use of fossil fuels in their business operations, some as soon as 2030.

Walker provided Rayonier perspectives on bioenergy and the net zero transition, noting that the company has 1.85 million acres in the U.S. South, 418,000 acres in the Pacific Northwest and 421,000 acres in New Zealand.

While net zero commitments are laudable for their ambition, Walker said, the organizations aren’t going to get there without some seriously carbon negative policies or activities, and that’s one of the many trends now driving demand for greener feedstock sources such as biomass.

Looking at renewable energy trends overall, Walker noted that solar is receiving significant investment, considering that solar energy costs have decreased 80% in the past 15 years. Rayonier views solar as one of the highest potential near-term opportunities, while longer-term are carbon markets and fiber for bioenergy/biofuel (BECCS and SAF for example). He said more than 40% of U.S. electric capacity additions during 2023-2025 will be utility solar.

Demand for CCS is increasing significantly, Walker noted, but structural factors are constraining, such as a four-year plus process for permitting, limited existing CO2 pipeline capacity, and simply cost-prohibitive economics.

Global demand for pellets increased 300% from 2012 to 2024, Walker said, yet in the U.S., pulp mill and machine closures in the past five years represent more wood consumption than the whole U.S. pellet industry combined.

Changing The Narrative

Noting that an industry’s reputation is fundamental to its success politically and for access to capital, Taylor Fitts, VP Communications & External Affairs for the U.S. Industrial Pellet Assn. (USIPA), said the biomass and fuel pellet industries face a formidable global network of more than 200 groups and organizations opposed to pellet and biomass utilization. Such groups have spent more than $100 million in the past decade to promote their agendas, he added, and are usually supported by a media where negativity rules and the editorial model is not so much about informing but instead grabbing and holding attention.

However, Fitts said he was making the case for optimism and pointed to recent surveys showing media misinformation doesn’t match public opinion. For example, a recent UK survey shows that 72% support biomass utilization. While he admits biomass and pellets may have less approval ratings than other renewables, overall approval rates are net positive, and “This shows there’s lots of room to convert those who are undecided,” Fitts said, adding that “biomass is relatively undefined for most” as compared to solar and wind.

To change the narrative, Fitts advocated “going on offense” by promoting the benefits of biomass utilization—including energy security, economic impact, and air quality—through personal positive impact stories, broadening the biomass-pellet coalition and speaking with a unified voice.

“Our reputation and image are stronger than perceived,” Fitts said. “There’s a significant opportunity to win the hearts and minds. Let’s work together.”

Paul Schubert, CEO of Strategic Biofuels, will update the progress of his company’s operations in northern Louisiana for converting wood waste materials into transportation fuels, and the goal of developing a series of negative carbon footprint plants, including the capture of carbon dioxide emissions into permanent geologic sequestration.

Known for his grasp of the big picture for the wood bioenergy industry, Dane Floyd, CEO of Biomass Engineering & Equipment, will talk about “projects that predict the future,” pointing to the evolvement of several projects since the 2022 conference, their potential volumes and impacts to fiber allocation. He’ll speak on the incredible growth in the number and size of biochar projects, and address a fascinating project of wood expansion gases going directly to a turbine and genset, and he’ll look at the increased pace of small-scale CHP overseas.

Tyler Player, president of Player Design, Inc., and Wendy Owens, CEO of Hexas Biomass, in their respective presentations will address alternative raw materials, including a sugarcane-waste pellet facility that PDI is building for Delta Biofuel in Louisiana, while Owens speaks about the ongoing and future development of multiple co-products from wood and non-woody biomass sources.

Well know timber industry expert Seth Walker, senior manager of strategy with Rayonier, puts on the lens of a forest landowner to discuss policy incentives, silvicultural regimes and other considerations linked to opportunities such as SAF and BECCS.

And of course the man, the myth, the legend, William Strauss, president of FutureMetrics, will hone in on baseload and on-demand generation using carbon beneficial wood pellet fuel as an essential complement to any decarbonization strategy, and how it will be done in the U.S. over the next several years.

And of course there’s more. Go to: bioenergyshow.com/bio-2024 to read about additional speakers and their presentations.

Meanwhile 45 companies will exhibit their technologies and offerings in the Grand Ballroom North, which is immediately adjacent the presentation rooms.

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