Wood pellet production capacity in the Atlantic basin is expected to continue growing in 2024 and beyond, although supply remains structurally short in the near term, as new additions are yet to close the deficit from sanctioned Russian supplies and match rising demand.
Millions of tonnes of production capacity expansions are planned, or have come on line this year, in North America, Europe and Asia-Pacific.
A combined capacity of at least 1.2mn t/yr was added in North America this year. US wood pellet producer Enviva fully ramped up its 750,000 t/yr Lucedale plant in Mississippi in the second quarter of 2023. And Copenhagen Biomass Merchants (CM Biomass) was also set to add about 420,000 t/yr of wood pellet production capacity in the US in 2023, with 150,000 t/yr of this already commissioned in the first half of the year in Jackson, Alabama.
Looking ahead, nearly 5mn t/yr of pellet production capacity is expected to come on line in the next few years in North America, including pellets made from alternative feedstocks, with nearly 1.6mn t/yr combined expected to become operational in 2024.
The construction of Enviva's 1.1mn t/yr Epes plant was on schedule to become operational in mid-2024. An additional 130,000t capacity is set to come on line next year with a planned expansion to UK utility and pellet producer Drax Group's plant in Aliceville, Alabama.
On alternative feedstocks, renewable energy firm Delta Biofuel has started building its 340,000 t/yr bagasse pellet production plant in Louisiana, southeast US, with deliveries expected to start in the second half of 2024, the company said. Delta Biofuel has sold most of its initial production to power and heat generators in Europe through long-term contracts, with maturity of about seven years.
Further out, Drax's 450,000 t/yr plant in Longview, Washington, is set to come on line in 2025. And Californian forestry company Golden State Natural Resources also plans to commission two industrial wood pellet production plants in west coast US with a combined 1mn t/yr by early 2025.
US producer Enviva was evaluating a potential deferral of up to 12 months to 2026 of the 1.1mn t/yr Bond plant, Mississippi, "in light of ongoing liquidity management initiatives".
Enviva, the world's largest industrial wood pellet producer, owns and operates 10 plants with a combined production capacity of about 6.2mn t/yr.
And Canadian pellet producer Prairie Clean Energy aims to raise its production of flax pellets to at least 150,000 t/yr by 2026 using untapped agricultural residues in the US and Canada.
European project pipeline
On the European production side, about 2.4mn t/yr of new capacity is in the pipeline — with differing financing stages or commissioning lead times — including industrial and residential wood pellets, as well as torrefied material that is seeing growing demand for industrial applications and decarbonisation.
Capacity in Austria, the largest supplier of premium wood pellets to Italy, was set to increase by 200,000t to about 1.9mn t/yr in 2023, and total additional capacity during 2022-24 expected at about 650,000 t/yr, figures from ProPellets Austria show. Significant additions were also expected for Germany and France.
