Notes

Asia wood pellet market analysis and prediction<br>
In Asia, Japan and also 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 anticipated to level off, Asia will certainly be one more drive engine in the biomass pellet market.



Japan

Stimulate policies

Japan has formulated a series of promote procedures to promote renewable energy manufacturing and biomass power generation, such as the Basic Legislation of advertising biomass energy application in 2009 as well as state preparation to promote biomass energy application.



The most influential plan is Fixed-price Assistance for Renewable Energy (FIT) accomplished because July 2012. According to this policy, Electric power business are required to have specific section of biomass energy power generation, like solar photovoltaics and biomass energy at set price as well as period. Ever since, the wood pellets consumption grows up quickly in Japan.



After the Fukushima nuclear crash in 2010, the power generation profile become more diversified. Japan ministry of economy, trade and sector (METI) re-exam the acquisition rate of FIT each year, so the renewable energy expense is unstable for power generation companies.



Production, usage as well as price

According to the information of FAOSTAT in 2016, the domestic wood pellets manufacturing is 90,000 tons in the past 5 years. However Japan need to import even more wood pellets due to the big consumption. In 2015, it import 230,000 loads from Canada, China and Vietnam. Given the domestic manufacturing and also import volume, Japan's wood pellets usage is 320,000 bunches in 2015.



Japan typically import high-grade wood pellets as well as export low-grade pellets. The import cost is 178 Euro/ton, while the export price is 129 Euro/ton.




The planned biomass power plants

Because the apply of FIT in 2011, there have actually been greater than 100 biomass power plant construction projects, as well as 84 of them have been authorized.



The government aims to enhance the proportion of renewable resource by 2030, with solar power using up 15%, and also biomass and also hydropower 10%. Besides, the government plan to construct a biomass energy zone to establish an extensive biomass power utilization system.



Oji Environment-friendly Resources and also Mitsubishi Paper Mills additionally constructed a joint endeavor business to construct a 75MW biomass nuclear power plant in Aomori. It is anticipated to start production in 2019.



Future biomass pellets demand

FIP policy will certainly remain to advertise the biomass energy application in Japan. According to the prediction of Strauss, Japan will need 15 million tons of biomass pellets in the mid-2020s.



Oriental

Renewable energy policy

Renewable Portfolio Criterion (RPS) plays a vital function is Korean's wood pellet market because 2012. It calls for the power generation company to raise the percentage of renewable energy from 2% to 10%.



Biomass energy is anticipate to occupy 50% -60% of renewable power, among wind, solar, and also water powers. With the execute of RPS, the need and also import of wood pellets in Korean boost swiftly.



RPS can reduce the power generation price by affordable innovation infiltration and also increase renewable energy supply. But see here now need to boost their administration price.



Production and need

According to the information of FAOSTAT, The wood pellet production in Oriental is 15,000 t, which can not meet residential demand As reported by Bloomberg New Energy Financing, Korean's wood pellet need is 2.2 million loads in 2014, around 40% of England's. The wood pellet import in Korean has increase 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, and also Australia.



Future demand.

As reported by Energy Information Management (EIA), Korean's need for wood pellets maintain increasing, driven by the RPS policy. Oriental government has actually set an objective to import 5 million tons of wood pellets by 2020 to satisfy 75% of domestic need. They will be generally imported from Canada, Southeast Asia as well as America.



China

Renewable resource plan

China's renewable energy industry matures quickly in recent times. In 2013, China's National Energy administration published a direction on constructing a renewable energy portfolio standard. It calls for renewable resource must use up 15% of overall energy consumption by 2020, as well as 20% in 2030. According to this law, the power generation company must utilize certain portion of renewable energy. Yet anonymous and also penalty system is not full.



Manufacturing, export and intake

China has bountiful resource of biomass, consisting of plant waste, branch, animal waste, organic drainage, city rubbish. According to the data of National Energy Management, the forestry waste is 900 million lots every year, with 1/3 of them can be utilized as gas.



In the past few years, China's wood pellet production increase quickly. It exported 287,000 tons of wood pellets to Korean in 2014. Yet in 2015, the export decreases swiftly in the face of Vietnam's low-price competition, yet the expanding Japan market develops new chances.



Owing to the short of wood material supply as well as the enhancing production price, China's wood pellet price boosts to 105 Euro/ton. So it is not as competitive as previously.



China's wood pellet consumption is primarily in the east and Guangdong district, where coal boilers are outlawed and the wood pellet cost is lower.



Vietnam

Vietnam has many large furnishings suppliers. So there are bountiful wood wastes to make wood pellets, as well as the price is the most affordable in Asia. And also the large wood pellet plant in Asia can advertise the economic climate of scale.



Vietnam is a significant wood pellet exporter in Asia. It uses up 70% of Oriental wood pellet market, and also supplies competitive price as reduced as 90 Euro/ton to Oriental and also Japan market. Besides, the transportation cost from Vietnam to Korean is quite low.



Nevertheless, Korean is most likely to elevate the wood pellet import standard, or introduce the bidders beforehand. These plans will prevent Vietnam's trade with Oriental. On the other hand, Japan will certainly draw up comparable plans to impede Vietnam dealerships from entering Japan market.



Malaysia, Indonesia and Thailand

Compared to Vietnam, Malaysia, Indonesia and Thailand are all tiny wood pellets producers and exporters. In 2015, Indonesia as well as Malaysia respectively exported 150,000 lots and 60,000 lots of wood pellets to Oriental. They also export small amount of Hand kernel coverings (PKS) to Japan. Drunk of supplement, quality as well as quantity, the buying cost is high.

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