As can be seen by the graph below the demand for wood pellets has soared over the last ten years and demand is predicted to continue to increase up to 2030.
The demand is fuelled by developed countries moving away from traditional fuels such as coal to green alternatives such as wood pellets. Across Europe, North America and Asia major Power Stations have been constructed, or have been converted to burn wood pellets.
In a recent white paper, FutureMetrics had analysed an optimistic industrial wood pellet demand forecast, which exclude China. It shows the average growth from 2010 to 2025 to be over 3 million metric tons per year, tripling industrial wood pellet demand from now to 2025. This forecast relies on markets developing in Japan, Korea, the U.S. and Canada, which are the countries indicated with the most potential growth after 2021.
Recently china released its 2016 to 2020 five year plan which had explicit support for wood pellets. If China were to embrace co-firing of wood pellets, even at modest ratios, the internal demand would be very large. The chart below shows that at a five per cent co-firing rate, in 2020 if only 16 per cent of China’s coal power plants are co-firing, demand would be almost 40 million tonnes per year.
The report states that future demand from china is uncertain but could be massive.
The report concludes that the expectations for the future of wood pellet markets are optimistic. If our forecasts are correct, more than 30 million tonnes per year of new demand by 2025 will drive more than $7 billion of investment in new production capacity worldwide.
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