China may start importing biomass in the near future, particularly to help its manufacturing industries move away from coal, delegates heard at the Argus Asia Biomass Conference held in Singapore on 21-22 February.
China's manufacturing industries need to move away from using coal to renewable sources in order for the country to meet its net-zero targets by 2050, and biomass is the best viable option for industrial heat production. Biomass resources are available in China — including agricultural waste of about 1bn t/yr, forest residues and energy crops with more than 100mn acres available in the country to plant — but these will not be enough to replace China's coal consumption of about 4bn t/yr, China's Great Resources Group chairman and World Bioenergy Association vice-president Kelvin Hong said at a panel discussion.
"So I think China will start importing biomass from anywhere in the world in the near future, to supply heating stations for manufacturing industries to replace coal," Hong added.
China currently has an import ban on biomass, although the Chinese government was understood to be considering lifting the ban. And at least one customs office was understood to be allowing biomass imports as long as certain specifications are met, a source told Argus, although no further details surfaced by the time of publication.
The government applies quotas on emissions for utilities, which face a penalty of 50 yuan/t if they exceed such quotas. And the allowances are being gradually reduced every year to encourage companies to emit less CO2, primarily by cutting on coal consumption.
In past years, China has invested heavily on solar and wind power-generating technologies, whose returns are shorter compared with investments in biomass — for which building supply streams from sources to end users take much longer. But in the future, biomass will take a much larger share in China's energy production because of demand from manufacturing, Hong said.
Manufacturing industries contribute to one third of China's GDP but two-thirds of the country's total emissions. "We have to solve this problem", and biomass is the best choice for these industries, Hong said.
Manufacturing industries' electricity-heat needs are split in a 40:60 ratio, according to Hong, who said for heat, biomass was the only option, while other technologies such as solar and wind could be used for electricity generation.
In Japan, industrial users face a similar challenge, with no option but to switch to biomass, Japanese project developer and operator Renova's executive advisor Yoshinobu Kusano said. "That is why the market is coming to the industrial users," he added. "They are much more serious…and definitely need some replacement of heat-generating sources."
"We need to carefully plan our future," Kusano said, adding that if the Chinese economy moved towards biomass, it may affect the market globally.
Biomass is already following other energy commodity markets, influenced by any movements in coal or other fossil fuel markets, with prices exposed to volatility, Kusano said, adding that when Japan first started the feed-in-tariff support mechanism in 2012, biomass utilities were paying a relatively good price to wood pellet suppliers, "but nowadays, the pellet price we can afford is the cheapest in the international market".
