Companies from a diverse set of industries burn biomass as part of decarbonization efforts.
The production of wood pellets is a growth industry in the southern part of the United States, providing producers and nearby ports along the Gulf of Mexico with a steady stream of business. According to the U.S Department of Agriculture’s Foreign Agricultural Service, the value of wood pellet exports in the first seven months of 2023 grew by 13% while volumes grew by 4.6%, compared to the same period in 2022. Elsewhere in North America, it’s worth noting, similar growth is also being seen in British Columbia.
The reason for the surge: sustainability efforts in industries as diverse as power and heat generation, cement production, and sustainable aviation fuel have companies on the lookout for fuels that allow them to decarbonize. Burning wood pellets allows them to do that—although not in the same way as other alternative fuels and not without some controversy.
Burning wood pellets contributes to decarbonization in an unusual way. “Burning wood pellets releases carbon dioxide into the atmosphere,” said Puneet Dwivedi, associate professor of Forest Sustainability Sciences at the University of Georgia. “But these emissions are recovered within a year by the new growth on those forestlands that are supporting the continuous production of wood pellets. This creates an overall low-emission electricity generation system.” One study estimated that biomass—organic matter such as wood used as fuel—from the U.S. Southeast reduces carbon intensity by 77% compared to burning coal under some conditions.
Some detractors contend that woody biomass is more carbon-intensive than fossil fuels. To counter that argument, Dwivedi explained that, for the past 50 years, forests in the Southeast have been regenerating at a rate sufficient to increase its overall volume of wood fiber. With forests “growing at this rate,” he said, “they recapture the carbon emitted by burning wood pellets or any other wood-based energy feedstocks within a year.”
Enviva Plant Expansion
The largest of the projects underway to expand pellet capacity in the South is Enviva’s plant in Epes, Alabama, located at a former Mannington Mills wood flooring plant. Construction on the plant, which is expected to be the largest fuel pellet manufacturing plant in the world, began in July 2022 and is slated to add its full 1.1 million tons of capacity in 2025.
Favorable logistics was one of the factors which made the project attractive for Enviva, according to the company’s president, Thomas Meth. The plant will use barges to carry the pellets 200 miles down the Tombigbee River to Enviva’s new terminal at the Port of Pascagoula, Mississippi, from there to be shipped to overseas customers.
“Pellets produced at the Epes plant will be exported to Europe and Asia,” he said, “and will help to fill demand for secure sources of renewable energy to de-fossilize power and heat generation.” Meth also expects Enviva’s pellets produced in Epes to be used in the steel, cement, lime, and aviation fuels industries. The company estimates it will invest $300 million in the plant and surrounding infrastructure.
At Enviva’s plant in Bond, Mississippi, also located in the vicinity of Pascagoula, construction began earlier this year, and, according to Meth, the plant’s output is fully contracted with customers around the world. With an investment of $250 million, the plant will be built out to a capacity of one-million metric tons per year, with production expected to begin in 2024.
Enviva has a multi-plant expansion project ongoing, which is expected to be completed by the end of this year. A $50 million investment is being made to revamp manufacturing processes and increase production capacity in plants located in Hamlet and Sampson, North Carolina, and in Cottondale, Florida. The Hamlet plant will expand its production capacity by 55,000 tons, Sampson by 100,000, and Cottondale by 30,000 tons. In addition, an expansion in Lucedale, Mississippi, is expected to add capacity of 250,000 tons.
Enviva also has plans to expand its capacity at Ahoskie, N.C., from 436,000 tons to 571,000 metric tons per year. The company has applied to, among other things, reconfigure the wood yard, add hammermills for sawdust production, increase drying capacity, add two new pellet mills, and add gas-fire boiler capacity to provide the steam for the pelletizing process.
Drax, a power generation company based in the United Kingdom, and which owns 14 operational pellet mills in the U.S. South and Western Canada, is expanding its plant in Russellville, Arkansas, to add 40,000 tons of capacity. The company brought online a 360,000-ton pellet plant in Demopolis, Alabama, and a 40,000-ton satellite plant in Leola, Arkansas, in 2022, and, in December 2022, announced a $50 million expansion to its facility in Aliceville, Alabama, to boost to its wood pellet production capacity by 50%.
The pellets produced by the Drax plants are transported to the Bruce Oakley terminal in Little Rock, Arkansas, before being shipped south to Louisiana for loading on oceangoing vessels, according to Matt White, a Drax executive vice president. The pellets are used at Drax’s power station in Selby, North Yorkshire, which supplies five percent of England’s electricity needs.
Drax’s conversion of its UK power station to biomass from coal represented “Europe’s largest decarbonization project,” said White, “reducing emissions from Drax’s power generation by 90% since 2012.”
Drax plans to double its pellet production capacity to eight-million tons globally by 2030 to meet its own requirements, and those of its customers in Europe and Asia. Drax also plans to deploy a new negative emissions technology to eliminate carbon from the pellet production process. The technology, known as bioenergy with carbon capture and storage (BECCS), will, according to White, “permanently remove millions of tons of carbon dioxide from the atmosphere.”
