Looking Wood Pellet Market In Asia

Wood pellet market growth projections indicate Europe as the main market with a consumption of 25-30 million tons in 2020, about 2.5 times more than the consumption in 2010 of 12 million tonnes. The  countries main producing wood pellet currently are Canada, USA, Sweden and Germany. The United States is the largest producer of wood pellets, but the majority of its production for domestic consumption for space heating (home heating), while Canada as the largest manufacturer of wood pellets after the United States, approximately 80% of production is for export. The big market changes that occurred in the Asian markets of less than 1 million tons in 2010 to about 15 million tonnes in 2020. Global wood pellet production also increased which grow up to 300% from 2012 to 2020, from 16 million tons to 40-50 million tons.

Global Energy Production by Source
Source: EIA 2008

Areas that are able to produce wood pellets with low prices would be a major exporter of wood pellets. Two components that are very influential in the production of wood pellets is the price of raw materials to factories and transportation costs to market. The position of Indonesia is located in the Asian region with a tropical climate so the potential to becomethe largest producer of biomass has a strategic role of being a manufacturer of wood pellets for the Asian market. Below are three major countries in Asia as market for wood pellets:

South Korea’s energy consumption by type. Source: Economic Intelligence Unit 2009

South Korea Market Development

Although South Korea is a small country, but a country 10th in the world with the energy user fifth oil importer and second importer of coal. Currently produces about 65% of the electrical of fossil fuels. South Korea seriously to reduce greenhouse gas emissions to 30% reduction in CO2 emissions from 2010 levels by 2020. South Korea has also issued a RenewablePortfolio Standard (RPS) which requires a minimum power plant to use the 2% renewable energy by 2012, with an increase of 0.5% / year until 2020. In 2020 they will need a minimum of 10% renewable energy with the expected composition of 60% of renewable energy derived from wood biomass, while the remaining 40% from other sources.

Japan’s energy portfolio. Source: U.S. Energy Information Administration 2010

Japanese Market Development

Japan has almost no natural resources, so that imports nearly all of almost all the coal, oil and gas. Japan is the largest importer of natural gas and petroleum ranked second in the world. Since the accident or the explosion of Fukushima nuclear power plant in 2011, the Japanese government review of national energy policy and resource development. The policy indicates that for the next 10 to 20 years for renewable energy, the increased use of non-fossil energy to 50% and greenhouse gas reductions in electricity generation from 34% to 70% in 2030.

China’s energy consumption by type. Source: Economic Intelligence Unit 2009

China Market Development

China is currently the second largest energy user after the United States. Energy is the foundation of economic growth in China. Coal is the main energy in China that make this country the largest user of coal in the world. Although very little renewable energy policy announced by the Chinese government, China in its five-year plan to allocate $ 750 million in direct subsidies, incentives and tax exemptions for building 200 green energy demonstration project in 2015 or at least 15% of its energy needs from renewable energy. China has also set up a biomass energy production with a target of 50 million tonnes of coal equivalent by 2012. Although the 5-year plan does not indicate specific green energy projects to be addressed, a number of assumptions stated China will produce wood pellets to replace coal. The majority of the production of wood pellets also comes from domestic production so that its import was minimal.

Planting Trees For Answering The World Problems

By planting a variety of essential human problems in life can be overcome, namely food, energy and water. These problems currently faced by humans for a variety of environmental damage is also caused by the act of the hands of men themself. There are many types of plants created by Allah SWT  (God Almighty ) in this world, so choose the one most suitable is the thing we need to do. Revive dead land and making it productive so will productive for human life, of course is highly recommended especially when the world is plagued by crises such as food, energy, water supply, including clean air. Currently there are an estimated 1 billion people on this earth who are facing the problem of hunger.  Millions of hectares of land are still abandoned and not used, even globally each year there are approximately 6 million hectares of land or farmland into deserts (desertification) due to the barren and unused. Forest area continued to narrow so it is still very far from the standard minimum requirement for a region is a concern in itself.

When the soil has been damaged so it needs to be restored, the plant species of legumes (Leguminosae) is the most suitable in these conditions. This is because the plant species of legumes have characteristics: cool / moisten the surface of the soil, the root nodule being able to fix nitrogen from the atmosphere means able to fertilize the soil damaged / barren, and capable of preventing erosion. Calliandra is the type of crop legumes (Leguminoceae) suitable for these conditions. The main results of wood for energy as for the production of wood pellets and byproducts in the form of leaves for farm goat or cow and flowers for honey bee breeding is to address the problem of food. Integration plantation / forest of calliandra with farm goat / cow will make the business optimally. Addition of new water sources is also very likely arise as a result of the plantation or the forest of calliandra. Calliandra plants that can be harvested relatively quick at an average of 1 year and still be productive until about 25 years into the future without having to plant every year because of the pattern coppice, has its own charm. Furthermore, on the sidelines of the Calliandra plants can be planted from other types that are tailored to local needs and conditions, for example caliandra with corn, Calliandra with bananas, Calliandra with pine, Calliandra with olives, Calliandra with dates palm and so on.

Calliandra age 1 week

Calliandra age of 2 weeks

Calliandra nursery for 1,200 hectares energy plantation

Another thing that should we acknowledge is the position we are in the tropics with beautiful nature, vast territory and fertile land (before it breaks). With the tropical climate of the sun will shine throughout the year so that the process photosintesa of the plant will run optimally it will accelerate the productivity of plants such as Calliandra.  With these conditions in Indonesia Calliandra timber productivity on average 4 times faster with plants poplar / willow in the sub-tropical or take 1 year in Indonesia, which is equal to 4 years in sub-tropical regions for the same amount of timber (wood). If all optimized then Indonesia is very likely going to be the largest biomass producer in the world capable of answering the problems of the world. Whereas in the energy sector are very suitable conditions when the world is also vying for loweringthe temperature of the earth with its biomass energy waves. 

Scrambling Biomass Waste Empty Fruit Bunch of Palm Oil: For Paper or Pellets?

In an effort to optimize the full potential of a number of oil companies are planning to process their wastes that resulting from the CPO production process. One of them is empty fruit bunches (EFB).  Two alternatives are being hotly debated is made pellets for energy and for the paper. Viewed from the business side, if it is profitable so is certainly not a problem for the production of both products. Availability of raw materials into one of the important factors in terms of production and business in general.

Further analysis can be done by looking in more detail in the production process technology, the amount of investment, ROI, environmental aspects, sustainability of core business (palm oil) and benefits of the products produced are a number of factors that will make it easier to eventually choose one. Further know more detail about the characteristics of each business such products will also further increase the stability of both products. In the end, the higher score determines the choice or priority of both, and if it turns out an analysis of both the same score then also no problem if both run concurrently if the resource is also capable.

Although the quality of pellets and paper products from palm oil waste raw material was also not the best grade when compared with paper products or pellet of woody raw material, but then when the business is profitable then it is nice to be produced as well. This dilemma is also experienced as agro-based plant (agro-industry), such as sugar cane factories, where baggase can be processed into paper or pellets.