Notes

Asia wood pellet market analysis and prediction<br>
In Asia, Japan as well as Korean are major wood pellet importers, while China, Thailand, Vietnam, Indonesia and Malaysia are mostly wood pellets exporters. As the wood pellet market in Europe is expected to level off, Asia will certainly be an additional drive engine in the biomass pellet industry.



Japan


Stimulate policies

Japan has prepared a series of stimulate steps to promote renewable resource production and biomass power generation, such as the Basic Regulation of promoting biomass energy application in 2009 and also state planning to promote biomass energy application.



One of the most influential plan is Fixed-price Assistance for Renewable Energy (FIT) accomplished since July 2012. According to this plan, Electric power companies are required to have certain portion of biomass energy power generation, like solar photovoltaics and also biomass power at fixed price as well as period. Since then, the wood pellets consumption matures rapidly in Japan.



After the Fukushima nuclear mishap in 2010, the power generation profile end up being a lot more varied. Japan ministry of economy, profession as well as sector (METI) re-exam the acquisition cost of FIT each year, so the renewable energy price is unsteady for power generation companies.



Manufacturing, intake and also cost

According to the data of FAOSTAT in 2016, the residential wood pellets manufacturing is 90,000 tons in the past 5 years. But Japan require to import more wood pellets as a result of the huge consumption. In 2015, it import 230,000 lots from Canada, China and Vietnam. Given pelletizing equipment manufacturing and import volume, Japan's wood pellets intake is 320,000 heaps in 2015.



Japan normally import high-grade wood pellets and also export low-quality pellets. The import cost is 178 Euro/ton, while the export rate is 129 Euro/ton.



The intended biomass nuclear power plant

Considering that the carry out of suit 2011, there have been more than 100 biomass nuclear power plant building projects, and also 84 of them have been authorized.



The federal government aims to boost the proportion of renewable resource by 2030, with solar energy taking up 15%, and biomass as well as hydropower 10%. Besides, fish floating feed machine to construct a biomass energy area to establish a detailed biomass power utilization system.



Oji Environment-friendly Resources as well as Mitsubishi Paper Mills likewise developed a joint endeavor business to construct a 75MW biomass power plant in Aomori. It is anticipated to begin production in 2019.




Future biomass pellets demand

FIP plan will remain to advertise the biomass energy application in Japan. According to the prediction of Strauss, Japan will require 15 million lots of biomass pellets in the mid-2020s.



Oriental

Renewable energy policy

Renewable Portfolio Requirement (RPS) plays a crucial duty is Korean's wood pellet market given that 2012. It requires the power generation company to elevate the percentage of renewable energy from 2% to 10%.



Biomass energy is expect to use up 50% -60% of sustainable power, amongst wind, solar, and also water powers. With the execute of RPS, the need and import of wood pellets in Korean increase swiftly.



RPS can minimize the power generation expense by competitive innovation seepage as well as increase renewable resource supply. Yet the nuclear power plant owners have to boost their management cost.



Production as well as need

According to the information of FAOSTAT, The wood pellet manufacturing in Korean is 15,000 t, which can not fulfill domestic demand As reported by Bloomberg New Energy Finance, Korean's wood pellet demand is 2.2 million lots in 2014, around 40% of England's. The wood pellet import in Korean has boost from 122,000 t in 2012 to 1850,000 t in 2014. 70% of them originates from Vietnam, and others from Malaysia, Canada, America, Russia, Indonesia, as well as Australia.



Future need.

As reported by Energy Info Management (EIA), Korean's need for wood pellets keep boosting, driven by the RPS plan. Korean government has actually established a goal to import 5 million lots of wood pellets by 2020 to meet 75% of domestic demand. They will certainly be generally imported from Canada, Southeast Asia and also America.



China

Renewable energy policy

China's renewable energy market grows up rapidly recently. In 2013, China's National Energy management released a guideline on constructing a renewable resource portfolio standard. It needs renewable resource should take up 15% of total energy consumption by 2020, and 20% in 2030. According to this law, the power generation firm must utilize particular portion of renewable energy. Yet the guidance and also fine system is not full.



Production, export as well as usage

China has bountiful resource of biomass, consisting of crop waste, branch, animal waste, natural drainage, metropolitan waste. According to the data of National Power Management, the forestry waste is 900 million loads each year, with 1/3 of them can be used as fuel.



In the past couple of years, China's wood pellet production boost swiftly. It exported 287,000 lots of wood pellets to Oriental in 2014. But in 2015, the export decreases swiftly despite Vietnam's low-price competitors, however the growing Japan market creates brand-new chances.



Owing to the short of wood product supply as well as the raising production expense, China's wood pellet cost increases to 105 Euro/ton. So it is not as competitive as in the past.



China's wood pellet usage is mostly in the east and also Guangdong province, where coal central heating boilers are prohibited and also the wood pellet price is reduced.



Vietnam

Vietnam has lots of large-scale furniture makers. So there are abundant wood wastes to make wood pellets, as well as the price is the most affordable in Asia. And also the big wood pellet plant in Asia can advertise the economy of scale.



Vietnam is a major wood pellet merchant in Asia. It occupies 70% of Korean wood pellet market, and offers affordable cost as low as 90 Euro/ton to Korean and Japan market. Besides, the transport cost from Vietnam to Korean is rather low.



Nevertheless, Korean is most likely to raise the wood pellet import requirement, or introduce the prospective buyers in advance. These policies will certainly impede Vietnam's trade with Oriental. On the other hand, Japan will certainly draw up similar plans to hinder Vietnam dealers from entering Japan market.



Malaysia, Indonesia as well as Thailand

Compared to Vietnam, Malaysia, Indonesia and Thailand are all tiny wood pellets producers as well as merchants. In 2015, Indonesia as well as Malaysia specifically exported 150,000 heaps and also 60,000 tons of wood pellets to Korean. They likewise export percentage of Palm kernel shells (PKS) to Japan. Under the influence of supplement, quality as well as amount, the getting rate is high.


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