The new US president has been chosen and it seems like it will spell the end for Obama’s Clean Power Plan — something many in the biomass industry pinned a lot of hope on to help ignite a domestic industrial consumption market. So, what now for the US wood pellet market?
As the world’s largest wood pellet exporter — the US has sent more than 3mn t of wood pellets overseas in January-September this year — the US wood pellet industry will be heavily influenced by currency movements and trade agreements. But could president-elect Trump support a domestic industrial market?
Although Trump has been very vocal about his feelings on climate change, the international community is likely to apply significant pressure on the US to take its global role in climate change seriously. But Trump has made clear his priorities instead will be an “America first” approach focusing on supporting the coal industry, securing and creating jobs and helping US industry thrive. For anyone involved in the biomass industry, the answer Trump is looking for is very obviously wood pellets and, more specifically, co-firing or converting coal-fired plants to use wood pellets.
Trump just needs to look at the UK’s Drax as an example of how coal-fired power plants can not only survive, but create more jobs, spur infrastructure projects and, in the US’ case, support its vital forestry industry. Just as importantly, it can create renewable, secure, flexible, sustainable energy. Drax was the UK’s largest coal-fired plant. It is now the one of the country’s largest producers of renewable power, following the conversion of three of its coal-fired units to burn biomass and it is keen to convert the remaining three if the UK government provides financial support.
It is too early to know what Trump’s energy policy will look like. But what we do know is the Republican heartlands in the US southeast, where the majority of industrial wood pellets are produced, is heavily dependent on a thriving and growing forestry industry, which can be supported by diversifying markets including wood pellet production.
Biomass already has strong support from many in the Republican party — the US Senate passed an energy bill in April with an amendment stipulating US energy policy reflect the carbon-neutrality of forest bioenergy and recognised biomass as a renewable energy source.
If the US does embrace wood pellets as a lifeline for coal-fired power plants, the potential numbers are huge – the US used just under 800mn short tons of coal in 2015, US government agency the EIA says. Despite there being no large-scale industrial users of wood pellets in the country, Portland General Electric could lead the way as the utility continues testing at its 518MW Boardman coal-fired plant in Oregon.
The Clean Power Plan may be off the table but that does not necessarily mean the end of the road for industrial wood pellet use in the US.