Wednesday, 28 May 2014

LOGICAL LOGISTICS




Information just released by the US Energy Information Administration reports the export of wood pellets, known as ‘biomass’, from US to EU nearly doubled in 2013 from 1.6m tons to 3.2mt. Mostly feedstock arose in SE and Mid Atlantic regions of USA and the greatest proportion of the exports headed to the UK where total demand for pellets has been accelerating dramatically from a near zero import in 2009 to 3.5mt in 2013.

Increase in demand for biomass is set to continue to satisfy demand for low carbon heat and power generation in the EU to facilitate meeting EU 20-20-20 targets. That is a 20% reduction in CO2 emissions (from 1990 levels), a 20% increase in use of renewable energy and a 20% improvement in energy efficiency across the region by 2020.

Biomass is deemed to be ‘carbon neutral’ as the absorption of CO2 by the trees/plants as they grow is equal to that emitted on combustion and so biomass is much in demand as a base fuel to meet carbon reduction targets. It can be co-fired, with coal, in existing power facilities and coal plants can be (relatively) straightforward to convert to biomass only generation plants.

Transport is something of the weak link, with the cost of transport accounting for about a quarter of overall cost of pellets. Further, shifting renewable fuels with fossil fuelled ships presents an open door to the environmental protesters already concerned about the overall sustainability of the supply chain.

‘Logical logistics’ would see renewable fuels used in the transport of renewable feedstocks. Reducing fuel cost and emissions by deploying renewables at sea to shift biomass would be beneficial to operators and cargo owners alike. Not only would greater price stability over the longer term emerge but the collaboration could point to a joint shipping-energy commitment to using technology solutions to address opposition concerns and so smooth the path for a faster expansion of the biomass market. Which, in turn, enables swifter achievement of targets.

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