Recent developments continue to underline the continued strong growth expected in global demand for industrial grade wood pellets, including:

• In June 2019, the UK became the first major economy in the world to pass a law to bring GHG emissions to net zero by 2050, compared with its previous target of at least an 80% reduction from 1990 levels. The government’s advisory Committee on Climate Change estimated that in order for the country to achieve the net zero emissions target, 15% of the UK energy mix would need to come from biomass, up from approximately 7% currently.

• The newly elected President of the EU Commission has announced the goal to make Europe the first climate-neutral continent by 2050. To make this happen, she has committed to propose, in her first 100 days in office, a European Green Deal, which is expected to include the first European Climate Law that will set the 2050 climate-neutrality target into legislation. This enhanced EU climate goal could lead to increased carbon pricing over time and improve the competitive position of biomass, especially in countries such as Germany, where coal continues to form a significant portion of the electricity and heat generation mix.

• Germany’s Federal Minister for Economic Affairs and Energy expects the law adopting the goals recommended by its Commission on Growth, Structural Economic Change and Employment to phase out coal will come into force by early 2020. The law is expected to provide specific dates for the shutdown of coal- and lignite-fired power plants. Several German utilities have publicly confirmed they are assessing options to replace coal with biomass for some of their combined heat and power assets.

• In June 2019, Poland’s government published the draft amendment to its Renewable Energy Sources Act as the government seeks to accelerate renewable energy development to avoid the cost of missing the renewable energy targets set by the EU’s Renewable Energy directives. During the first quarter of 2019, over 100 megawatts of new biomass generation capacity was launched in Poland, bringing total biomass capacity in the country to more than 1.4 gigawatts.