The UK has long been Europe’s leading wood pellet importer, driven by UK utility Drax’s appetite for biomass. But last week the UK voted to leave the EU, throwing up clouds of uncertainty for the market, raising questions around the implications for commodities, policy and trade.
Biomass market participants from all over the world gathered in London for the annual Argus Media biomass conference, but there was one noticeable absentee — German Pellets, until recently one of the world’s largest wood pellet producers.
Since the start of this year, barely a week has gone by without new headlines concerning the wood pellet producer and its recent downfall. The producer filed for insolvency in February, followed by seven European subsidiaries and its US arm Louisiana Pellets.
The biomass industry has a problem — its public image. A sector as reliant on government policy and subsidy as the industrial biomass market is needs the backing of the general public. But the narrative is too often dictated by NGOs challenging its environmental credentials.
The UK is the world’s biggest biomass market but the recently elected government is rapidly dismantling support for the fuel, putting plans for new US wood pellet plants in jeopardy. Yet the arrival of President Barack Obama’s Clean Power Plan could bring fresh hope to the industry.