North America's wood pellet sector

Author / Creator

Spelter, Henry

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Summary

The North American wood pellet sector is profiled in this paper. A small pellet industry has existed since the 1930s, but its main growth occurred in the wake of the energy crisis in the 1970s. Its...

The North American wood pellet sector is profiled in this paper. A small pellet industry has existed since the 1930s, but its main growth occurred in the wake of the energy crisis in the 1970s. Its current spurt is even greater, growing from 1.1 million metric tonnes in 2003 to 4.2 million 2008. It is set to reach 6.2 million in 2009. Most plants are small, relying on sawmill residues for fiber and thus are limited to 100,000 tonnes or less per year. A number of new mills have been built to process chipped roundwood and have capacities three to four times as large. Most pellets made in the United States are consumed domestically, but a growing offshore market is boosting exports. By contrast, most Canadian pellets are shipped overseas. The reliance on sawmill residues led to imbalances between supply and demand for fiber as the sawmilling sector retrenched in the 2008-2009 recession. This has led mills to turn to roundwood or other non-sawmill sources of fiber. The wood pellet industry and use of wood pellets as energy are in their relative infancy in North America and the recent growth of both has been fueled by increases in the cost of fossil energy. However, policies aimed at reducing carbon dioxide emissions into the atmosphere could loom as bigger factors in the future.

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