Asia and Europe fuel B.C.'s booming pellet industry, producers eye Alberta market

Richard White has been working in B.C.'s emerging wood pellet industry for over a decade.

His organization, Eagle Valley ABM in Princeton, started off collecting waste fibre from regional pulp and paper mills to produce bedding for luxury horses and livestock.

"Wood pellets are the greatest horse bedding in the world — it replaces shavings, sand, straw. It does a phenomenal job," he said.

But over the last three years, his company has ramped up production for some new clients: Asian countries that are using the same product to replace coal in their power grids.

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A growing industry

Wood pellets are a biofuel, made from compact organic matter — most prominently wood waste, often derived from commercial logging slash. They can be used on a small scale to fuel a stove or heat a house or on much larger scales, to fuel power plants and district heating systems.

According to the Wood Pellet Association of Canada (WPAC) — a nationwide collective of pellet producers — the industry has seen substantial growth over the last decade, as more and more countries overseas try to limit carbon emissions by cutting back on coal and moving towards renewable energy.

"Canada has benefited from the boom in Europe," said Gordon Murray, the organization's president. "About 85 per cent of our exports are going to Europe, and 15 per cent to Asia."

He says that in less than 20 years, the industry has skyrocketed.

"In 2000, there were just a couple of rickety little plants in B.C. and one in Quebec," saif Murray. "They were producing 100,000 tons per year."

In contrast, Canada produced more than three million tons of wood pellets in 2016 — a 15 per cent increase from the year before. B.C. is the nation's leader in both production and exports, producing an estimated 70 per cent of the country's pellets, many of them making use of forests that were decimated by the mountain pine beetle, according to the WPAC.

Murray says there are over 40 plants across the country, including three new mills that opened in B.C. over the past year, with growing exports directed towards Japan, South Korea, and Southeast Asia.

Finding a domestic market

But while the province's forest sector and major ports make it an ideal centre for Canada's pellet industry, producers are starting to set their sights on the domestic market.

Earlier this month, federal Environment Minister Catherine McKenna announced a plan to phase out coal by 2030, putting pressure on the remaining four provinces that still burn the resource — Alberta, Saskatchewan, Nova Scotia and New Brunswick — to make the switch to renewable energy.

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Many members of the wood pellet industry, including Murray, have lobbied the provincial and federal governments to take advantage of wood pellets to replace coal in these provinces — specifically in Alberta.

"We've approached both the industry and the government there about using wood pellets, but so far, they've been quite reluctant to consider it," said Murray. "They want to use natural gas, and they want to use wind and solar — we think wind and solar are good, but they're intermittent... you need to wait for the sun to shine or the wind to blow."

Murray says the infrastructure that currently exists for coal-powered electricity can be converted to run on pellets. In Europe, similar projects have been undertaken — the Rodenhuize Power Station in Belgium, for example, was a coal plant that has since been converted to run solely on wood pellets and continues to power over 300,000 homes. It runs almost entirely off Canadian pellets.

Still burning carbon

But just how environmentally friendly are wood pellets, since they need to be burned to produce energy?

According to a study from the America-based Natural Resources Defense Council, it can take up to 100 years before the carbon released by burning pellets is absorbed back into the forests. In the short term, they're emitters. But in the long term, they can be carbon neutral.

Sara Hastings-Simon, program director of clean economy for the Pembina Institute, says it might not be wise to go all-in on wood pellets — but they shouldn't be abandoned.

"Wood pellets and bioenergy more generally could be another source of energy that can complement other renewable energy," she said.

Hastings-Simon's latest research includes outlining plans detailing how Alberta could meet its commitment to bring emissions down 30 per cent by 2030.

She says pellets would be a welcomed addition to meet the end goal — but only when it's cost effective and resources are abundant. She thinks they could be especially useful in replacing natural gas.

"There's no one-size-fits-all solution for a power grid. But as we move away from fossil resources, there's places for more and more renewables to come in to deliver reliable power."