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Wood Pellet Industry and Trade in China

Unlike Japan and South Korea, other Asian countries are mainly wood pellet exporters such as China, Thailand, Vietnam, Indonesia and Malaysia. China’s renewable energy sector is growing fast in recent years. In 2013, the Chinese National Energy Administration released “Guiding Opinions on Establishing Renewable Energy Portfolio Standards (RPS)” which set renewable energy consumption targets for China to achieve 15 % and 20 % of renewable energy in the total primary energy consumption by 2020 and 2030 respectively. The RPS is a regulation that requires the increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal. It stipulates electricity supply companies to produce a specified fraction from renewable energy sources, however many aspects of the policy are left undeveloped such as lacking of monitoring and compliance requirements and insufficient monitoring for trading and insufficient penalty for not demonstrating compliance with the mechanism.

Wood Pellet Industry and Trade in China(图1)

Biomass energy resources in China are diverse, including crop stalks, tree branches, animal manure, energy crops, industrial organic waste water, municipal sewage and garbage. Availability from wood (forest) wastes is about 900 Mt in which 300 Mt can be used as energy use. Energy crops such as sorghum, jatropha curcas dominate about 2,000 million hectares, to meet the annual output of about 50 Mt of bio-liquid fuel raw materials demand (Chinese national bureau of energy, 2012). China's domestic demand for wood pellets is growing, largely in the east and in Guangdong province, where the local government has prohibited coal-fired boilers and the cost of pellets is lower than elsewhere in the country (Murray, 2015).

In addition to biomass production for the domestic market which has grown since the last few years, China is also an exporter. In 2014, China exported 287 kt of wood pellets to South Korea.In 2015, the export fell sharply as Chinese producers had to compete with Vietnamese producers for cheaper wood pellet prices; however it gained a growing Japanese biomass market which supports growth in the coming years. High production costs as results of tight wood resources supply renders Chinese wood pellets less competitive as price increases (€105/t), Chinese wood pellets trader have limited room for negotiation

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