Export Wood Pellets to Japan, Is It Possible?

The consumption of biomass fuels especially wood pellets in Japan continues to increase over time according to the target of 4-6 GW in 2030. Supply of wood pellets for Japan, especially from Canada, have a volume of more than 250 thousand tons annually. The use of wood pellets is mainly for fuel generating electricity (read the background here). Wood pellet producers in Asia are also increasing, but the fact is that not many of them can export to Japan. Japan applies strict standards for the quality of wood pellets and also guarantees that wood pellets are produced in an environmentally friendly manner as evidenced by a sustainability certificate in the form of FSC. Another factor that makes it difficult to export wood pellets to Japan is the application of long contracts with fixed purchase prices for a certain time. That is because with the FIT (Feed in Tarrif) policy, the selling price of electricity produced is also fixed for 20 years with prices depending on the type of fuel. In addition, the volume of shipment needed is also quite large, which is 10 thousand tons for each shipment. This has consequences for the capacity of the wood pellet plant.

Then how about the track record of export wood pellets from Indonesia? It turns out that wood pellet exports from Indonesia to Japan are still very minimal, in general only for the trial phase. This is very different from other biomass fuel commodities namely palm kernel shells (PKS) whose export volume to Japan alone is estimated at more than 1 million tons annually. Why did it happen? First, the average wood pellet producer in Indonesia is still in small capacity or less than 5000 tons / month. In addition, the majority of raw materials used come from sawdust from sawmills and wood wastes from the wood processing industries. This condition also makes it very difficult or impossible to obtain a sustainability certificate because it is very difficult to trace the source of wood from its origin. Second, the amount of PKS is abundant in palm oil mills because it is one of the solid wastes from palm mills or CPO production. With national CPO production estimated to reach more than 40 million tons / year, the resulting PKS are estimated to reach more than 10 million / year and only through a simple process can the PKS be exported. Technically, PKS also have many similarities with wood pellets for technical specifications such as heating value, size, etc., as well as having advantages namely of easier handling and lower prices.

One scenario to be able to export wood pellets to Japan, is the production of wood pellets from energy plantations. With an energy plantation, the origin of the wood so that all aspects of its cultivation can be clearly monitored and verified so that certificates like FSC can be easily obtained. The supply of raw materials can also be guaranteed and it is possible for large capacity production. To optimize the energy plantation can also be integrated with sheep, cattle and goat farms and honey beekeeping. The three important aspects for human life, namely food, energy and water can be done with these activities, for more details can be read here.

Another alternative is to produce EFB pellets or palm oil empty fruit bunches pellet, but EFB pellets are not a wood pellet group, because they originate not from woody biomass, but from agricultural waste so they are called agricultural waste pellets or agro-waste pellets. The quality of agro-waste pellets is generally lower than that of wood pellets mainly because of the higher ash content and the lower heating value. In addition to the technical factors above, there are important things to consider for the production of EFB pellets is the availability of electricity. This is because palm oil mills are generally in remote locations making it difficult to get electricity supply, while electricity produced by palm oil mills is also inadequate when used for EFB pellet production. To be able to produce electricity, namely by producing biogas from POME (palm oil mill effluents), and for more details, please read here.