UK Biomass Demand Rises; Enviva Reports New Japanese Contract

In its second quarter financial report, major industrial wood pellet producer Enviva refers to recent research conducted by Imperial College London and Drax that says biomass accounted for 11% of the United Kingdom’s power generation in 2020, the highest of any country in the world. Citing conversion to biomass as one of the key factors contributing to coal plant closures, the report estimates that coal-to-biomass conversions reduced carbon emissions by 10 million tons of CO2 in 2019 compared to 2012, even surpassing the carbon-emissions reduction achieved by the eight gigawatts of onshore wind farms installed during the same period. The report added that bioenergy with carbon capture and storage (BECCS) could remove up to 40 million tons of CO2 per year by the middle of this decade. The U.K. government is currently evaluating a new biomass strategy, which is the first step in the process for developing a support framework for BECCS projects that could be a prerequisite for the U.K. to meet its commitment to net zero by 2050, prompting further long-term demand for industrial wood pellets in this market.

Enviva also reports it has signed a 17-year contract to supply a major Japanese trading house with 210,000 MTPY of wood pellets. Deliveries related to the contract are expected to commence in 2025. This contract brings the total contracted volumes for long-term deliveries to Japanese customers to approximately 4 million MTPY under agreements which extend out in many cases to the 2040s. The rapidly growing Japanese market remains a core growth segment for Enviva.

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