Catch up with PFI in this issue of the Pellet Wire!

October 14, 2022

From the Director's Desk: 

Miami’s Nice, PFI Heating Degree Index Active

Miami's Nice

I know. I know. I already made a Miami Vice reference in the Pellet Wire this month. Still, I loved that 80’s era of cop drama and if I can reference it twice in a month, I’m going to. Further, Miami is nice and our board was delighted in being there last week for our fall board meeting. 

We intentionally co-located our board meeting with the Exporting Pellet Conference to provide our board members interested in learning more about the wood pellet market dynamics throughout the world the chance to do so. Our board members who attended got all of that and more. The energy crisis throughout Europe is very real and I’d like to say fascinating if so many people weren’t struggling so much as a result. Energy is enormously expensive across Europe right now as western Europe tries to fill the energy void created by Russian sanctions imposed after their invasion of Ukraine. 

We’ve all heard this and have been following along as the situation unfolds. We’ve even understood and anticipated that stateside heating pellet producers would feel the market pull from European buyers this heating season. Still, when you are looking over someone’s shoulder at a cell phone picture of a sign reading €12,99 next to a 15 kg bag of pellets and you run the math in your head ($15.74 per 40 lb. bag, $787/ton), the point really sinks in. At those numbers, you start asking questions like, ‘why?’. The answers to the questions I asked were just as shocking. For instance, I wondered how much producers there are paying for raw materials. The answer I was offered was north of €200/ton for raw biomass. The US Dollar and the Euro are at near parity right now so the math is easy. $200/ton for raw biomass is about five times what producers here paid in June (nationwide average for wood product manufacturing residuals was $40.19). Power prices were being reported as in some instances 10x what they were 2 years ago. Pellet production takes a lot of fiber and a lot of electrons. Both are exceedingly expensive in Europe right now and one of the results is $800-900/ton heating pellets. This is why phones are ringing on a weekly if not daily basis at wood pellet production sites not just here in the U.S., but all across the world.

One last item of note from the conference. I haven’t followed the industrial wood pellet market on a week-to-week basis in four years. When I last tuned in there was great anticipation and optimism for the Japanese market. It sounds like those hopes have largely become reality. Japan is a major buyer of wood pellets, largely from Canadian producers operating out of British Columbia. According to the U.N. Comtrade Database Japan imported 1.05 million tons of Canadian pellets in 2021, up significantly from 592,000 tons in 2020. 

Pellet Fuels Index Up and Running

Last year we launched the Pellet Fuels Index to track Heating Degree Days in twelve different locations from across the different pellet burning regions of the country. The data comes from the Climate Prediction Center and is updated by that organization weekly. We aggregate and post these 12 cities as a means of conveying the HDD trends in those areas, not pellet demand specifically in that location. Lewiston boasts just 5,000 inhabitants, but is a good stand in as a representative of the accumulated degree days in the northern Rockies. 

Fair warning, there are some bizarre percentages showing up in the report. I dug into the report and was reminded that in many locations the heating degree days have just started accumulating. In fact, Little Rock has accumulated so few Heating Degree Days so far (just 2) that the data isn’t even useful to report. I expect towards the end of the month the Index will offer the more informative “at a glance” type of information we were hoping it would. 

—Tim Portz
 Executive Director

Save the Date 2023

PFI 2022 Annual Conference


Photo of the Week:

Two men sitting in a restaurant smiling
Photo: Tammy Hippchen

Best Shirt of the Board Meeting Award Goes To… Cory Schrock (Fiber By-Products) and Scott Cummings (Barefoot Pellet) raise a glass at the now traditional fall board dinner. 

 Send Us Your Photos! Help us build a collection of photos of our members, their pellet mills, and products! Send images to Tim Portz at tim@pelletheat.

Industry News

EIA Monthly Densified Biomass Report (with June data)

As of June 2022, the monthly data collection included 80 operating manufacturers of densified biomass fuel. These manufacturers had a total production capacity of 13.27 million tons per year and collectively had an equivalent of 2,479 full-time employees.

Read Article

Heating Degree Days Data

Heating Degree Day Data Weekly Summary
Climate Prediction Center-NCEP-NWS-NOAA
Accumulations are from Jul  1, 2022 TO Oct  8, 2022

Read Article

Drax CEO Will Gardiner issues statement on biomass sourcing

As the world’s leading producer and supplier of sustainable biomass, Drax is committed to ensuring the biomass we source delivers positive outcomes for the climate, for nature and for the communities in which we operate.

Read Article

USDA: US exports 880,876 metric tons of wood pellets in August

The U.S. exported 880,876 metric tons of wood pellets in August, up from 649,185.7 metric tons the previous month and 647,922.9 metric tons in August 2021, according to data released by the USDA Foreign Agricultural Service on Oct. 5.

Read Article

Missouri extends wood energy tax credit program through 2028

Missouri Gov. Mike Parson on Oct. 5 signed House Bill 3. The legislation, in part, retroactively extends the state’s wood energy tax credit program from June 30, 2020, through June 30, 2028. 

Read Article

Current Heating Fuel Prices in Maine  

The Governor’s Energy Office (GEO) conducts a weekly survey of heating fuel prices, obtained from fuel retailers statewide. This survey provides the current Maine cash prices, in dollars, rounded to the nearest penny. Prices are typically updated on Thursday mornings.

 Read Article

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