Trends of the energy wood chip market in Europe AEBIOM conference - - PowerPoint PPT Presentation

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Trends of the energy wood chip market in Europe

Jean-Francois Guillon Africa Renewables ltd

AEBIOM conference Brussels May 2014

Afriren background

• Established in May 2010
• Headquartered in Belgium
• Offices/project in London, Ghana, Ivory Coast, Nigeria and

Cameroon

• Over 100 staff worldwide
• Over 200,000 MT of biomass originated from West Africa over

the past 30 months

• Member of the UN Global Compact
• FSC certified
• www.afriren.com

Contents

• Current demand
• Projected consumption 2020
• Pricing

There are 2 sources driving the woodchips consumption in Europe :

• The pulp & paper market . Now gradually weakening ...
• The CHP markets .Now gradually growing …
• In both cases theses industries have been traditionnaly sourcing

their biomass fuel from local market or immediately crossborder markets.

• The new rules of phythosanitary requirements and dysfunction
• f physical availability is now raising the issue of whether

imported woodchips would compete with local biomass .

European woodchip demand 14.5 MMT /yr

Turkey: UK & Ireland: 500,000t/yr Italy: 2mn t/yr Poland: 2.75mn t/yr Finland: 2mn t/yr Sweden: 2mn t/yr Denmark: 1.75mn t/yr Benelux: 750,000 t/yr France: 4mn t/yr

France

• Demand: 4 MMT
• Sourcing: 70 % is locally sourced with a local production

capacity of 2.7 MMT/ yr

• Production ~85pc capacityl
• Imports :1.3 M MT /Yr imports from Spain Portugal

Poland

• Demand: 2.75 M MT
• Sourcing: local
• Projection: Imports

expected to surge + 20% from 2017

Denmark

• Demand : 1.75 MMT / yr
• Local sourcing : 1.33 M MT /Yr
• Imports : 420,000 MMT /YR

– Russia/Baltics – AFRICA – Germany – Sweden – France

• Previsions : imports to double by 2017, + 840’000 Mt /yr

The Russian parameter

+ 1 MMt /yr of in 2013

300,000t 500,000t 120,000t

* Source: Bioenergy International Russia

Small scale CHP plants in Europe

– European CHP order book very healthy –

• Increasing demand from small towns to secure own production of heat

and power based from sustainable sources

• Woodchip storage does not require investment : open air coning
• Woodchip carbon foot print is lower than pellet

Development of large-scale power and CHP plants

Location Capacity (MW)

• Est. Commissioning

Demand (MT/yr) Limousin, France 25 2015 150,000 Provence, France 150 2015 500,000 Utrecht, Netherlands 50 2016 300,000 Vartan, Sweden 300 2016 1,000,000 Ghent, Belgium 300 2017 1,000,000 Skaerbaek, Denmark 400 2017 500,000 Italy (multiple plants) 100 2017 400,000 Teeside, UK 300 2018 800,000 Ireland (multiple plants) 200 2018 700,000 Southampton, UK 150 2018 500,000 Helsinki, Finland (unconfirmed) 50 2020 275,000

Projected demand for 2020

+ 28 M MMT /yr

Turkey: UK & Ireland: 3mn t/yr Sweden: 3mn t/yr Denmark: 2.55mn t/yr Finland: 3.7mn t/yr Poland: 3.75mn t/yr Benelux: 2mn t/yr Italy: 3mn t/yr France: 7mn t/yr

Pricing Snapshot 2013-14

3 3,5 4 4,5 5 5,5 6 6,5 7 7,5 8 Apr '13 Jul '13 Oct '13 Jan '14 Apr '14 €/GJ

Wood chip prices, imports vs local

Argus wood chips, cif NWE FOEX forest biomass Finland, delivered to plant

Historical Prices

10 12 14 16 18 20 22 24 Jan '07 Jul'07 Jan '08 Jul'08 Jan '09 Jul'09 Jan '10 Jul'10 Jan '11 Jul'11 Jan '12 Jul'12 Jan '13 Jul'13 Jan '14 €/MWh

Local wood chip prices, Finland

Finland Statistics, forest biomass, delivered to plant FOEX forest biomass Finland, delivered to plant

Pricing

• Market immature based on local sourcing

– Little datas on reporting and figure collection yet – Shortage of local physical biomass pushing CHP to review supply strategy – Expected demand to be covered by imports if CHP plant is located max 200 Km from port – Import prices CIF Rouen , CIF Crotone , CIF Aarhus is competing with locally produced biomass fuel = 5 Euro /GJ

The African Opportunity

*Source – The Economist

• Abundance of natural resources in Africa
• United Nations Food and Agriculture Organisation study – 71bn t, out of the

planet’s 422bn t of biomass can be found in Africa, with only South America housing a greater amount.

No phytosanitary restrictions from Africa

Trade allowed inside the EU (Portugal has specific exports restrictions) Phytosanitary certificate, debarking or heat treatment required Heat treatment or fumigation required for import to EU (country specific)

Phytosanitary import restrictions for wood chips into the EU

Import is allowed into EU

African projects drive an important Circle of Socio-Economic Benefits

Local community

• Additional jobs
• Support small-scale

charcoal and timber trade

• Primary forest

threat is alleviated

Plantation Manager

• Biomass income is an

incentive for replanting

• Biomass logistic chain
• f extraction prepares

the ground for replanting

National level

• Brings hard currency into

the country

• New economic activity
• Technology transfer
• Lead the green revolution
• Reduce dependence on

fossil fuels

Africa Renewables Ltd

• Stability of supply
• Competitive pricing
• Supply from Ghana & Cameroon
• No restricted species for EU phyto

requirements

• Sustainable – FSC control wood

Contact

J.F .Guillon

Managing Director Tel: +44 (0) 203 402 5246 Mob: +44 (0) 7768 078199 jfg@afriren.com

Louisa Blair

Marketing Manager Tel: +44 (0) 207 228 4010 Mob: +44( 0) 7554 398 664 ljb@afriren.com

Mohammed Safdar

Shipping & Operations Tel: +44 (0) 203 402 2232 Mob: +44 (0) 7590 976247 mos@afriren.com