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Pellets final

This document provides an overview of opportunities for wood pellet and chip production and export from Brazil. It discusses the global pellet market and supply trends. Brazil is well-positioned for biomass exports due to its large renewable resources including water, arable land, sunlight, and advanced agricultural science. The country has high forest productivity and is one of the world's most competitive suppliers of wood pellets. Brazil's pellet exports have grown significantly in recent years. The document analyzes production and trade data and forecasts further increases in global pellet demand, positioning Brazil well for future market expansion.

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Opportunity for pellets production in South America Basic data on the global market and supply from Brazil Claudio Langes Pesenti, Managing Director May – 2018 Brazil Register CNPJ : 22.225.637/0001-19
Terminology
Pellets (600 kg/m3; moisture 7%; 17.5 Mj/kg; ash 0.7%)* Pellets are more standardized than chips, since the industrial processing so that every pellet has very similar (and higher) density and one-digit moisture. Those mean lower relative logistic cost. With uniform density of wood pellets and lower moisture, it is easier for the heater to provide a predictable, even rate of heating over a period, a concept referred to as being in "steady state“. Heat systems running at steady state will be more efficient and provide more reliable indoor comfort. Another critical advantage of pellets is the lower smoke and particulate matter emission. Wood Chips (250 - 300 kg/m3; 25% - 45% moisture ; 13.5 – 9.5 Mj/kg; 1.0 – 1.5% ash)* Lower industrialization, cheaper than pellets (even the higher relative logistic cost, wood chips still shows lower $/Mj, compared to pellets). They are chipped woody biomass in the form of pieces with a defined particle size produced by mechanical treatment with sharp tools such as knives. Wood chips have a sub-rectangular shape with a typical length 5 to 50 mm and a low thickness compared to other dimensions. Cutter chips, forest chips, green chips, stemwood chips, and whole-tree chips. *There are independent commercially acknowledged standards issued for pellets and wood chips, so the values above may vary accordingly.
Pellets Global Market
(16.5 Gj/tonne) Industrial EU pellet specs are different according to applications Residential Compared to A1 residential grade, industrial grade presents: • Lower requirements for diameter, length, temperature, ash content, mechanical durability and fines. • Higher requirements for bulk density variation.
Compared to A1 residential grade, industrial* grade presents: • Equal requirements for Nitrogen and Mercury. • Lower requirements for all other pollutants. *The industrial specs listed above refer to industrial grade I2 (the most commonly traded grade). Other industrial grades (I1, I3) are shown in this study. *The “ENplus B” shows tolerance levels for pollutants, ash and smoke, which are between the industrial and the residential grades (A1 and A2). So “ENplus B” is normally driven to non-residential applications as commercial buildings and small industries that are not driven to electricity or heating distribution. Industrial EU pellet specs are different according to applications Residential
Top 10 pellet consuming countries 2016 Global wood pellet demand 2016
Industrial pellet supply-demand balance
World demand forecast 2025: Industrial + Residential use = 60 Mtonnes/y Industrial 2025 = 40 Mtonnes/y (15% pa) Residential 2025 = 20 Mtonnes/y (5% pa) 30,000 20,000 10,000 Replacing nuclear? Annual average market growth: ~3.8 Mtonnes/y
The forecasted prices for long term agreement grow smoothly… … but the spot market prices are very volatile
Additions to global wood pellet production capacity (as of 2Q 2017)
Pellets European Market
The future in the European Union: in 2017, electricity from wind, solar and biomass exceeded that from coal for the first time biomass solar wind Hard coal & lignite TWh 21% 6% 4% 11%
EU imports goes high, while internal production (excl. Russia) remains stable www.aebiom.org
Non-residential use takes 57,8% of pellets in Europe, mainly by the “Power only” plants, which consumes 33,1% of the total pellets volume.
2015: Italy 3.1 Mton for heating and UK 5.7 Mton for electricity
2016: Italy 3.2 Mton for heating and UK 6.4 Mton for electricity 2016
The sizes of figures were redimensioned to keep the same scale for the price axis Czech Rep Bosnia Hz Montenegro Serbia Albania Poland Lithuania Ukraine Italy Germany Greece France Austria Spain Sweden Bosnia Hz Prices 2014 – 2017: €/ton; 1 pallet; 15 kg bags; at retail store; incl. VAT
Prices 2014 – 2017: €/ton; 1 truck; 6 ton bulk; delivered 100 km; incl. VAT The sizes of figures were redimensioned to keep the same scale for the price axis
Pellets Supply from Brazil
Brazil is 1 of the 3 giants (2017) Bangladesh Pakistan Phillipines Nigeria Russia Australia Canada United States China Indonesia Mexico India Japan Germany United Kingdom France Italy Spain South Korea Brazil *GDP > $ 1 tri *GDP > $ 2 tri Area > 7 M km2 Population > 100 M *International Monetary Fund - World Economic Outlook Database, April 2018
Brazil is 1 of the 3 giants (2017) Pakistan Russia Australia Canada United States China Indonesia India Japan Germany United Kingdom France Brazil *GDP > $ 2 tri Area > 7 M km2 Population > 200 M *International Monetary Fund - World Economic Outlook Database, April 2018
Source: http://unctad.org/en/PublicationsLibrary/wir2017_en.pdf After China, Brazil is the most preferred for Foreign Direct Investment, among emerging economies
Source: http://atlas.media.mit.edu/en/visualize/tree_map/hs92/export/bra/all/show/2016/ Brazil total amount of exports worldwide in 2016: US$ 226 billion Wood products $ 2.91 bn Cellulose & paper goods $ 8.55 bn
Surplus Deficit 1995 2015 15 highest surpluses and deficits in the Balance of Trade for agricultural products (US$ bn) Source: WTO merchandise trade values annual dataset - Total 15 : US$ 147 bn - USA with highest surplus. - Canada 2nd highest surplus - Netherlands with 3rd surplus - No significant surplus in Asia - Subtotal 4 European: US$ 38 bn - Subtotal 4 Asean: US$ 21 bn - Total 15 : US$ 194 bn - Japan had the highest deficit - China mainland had no significant deficit - European countries pravailed after Japan; Germany first in Europe - Significant deficit in Russia - Subotal 6 European: US$ 66 bn - Subtotal 4 Asian deficits: US$ 90 bn - Total 15 : US$ 304 bn (+107%) - Brazilian leadership (8 → 69 bn) - USA eliminates its surplus - Argentina raises to 2nd (10 → 32) - Canada down to 4th (20 → 25) - Big growth in Indonesia, Thailand - Ukraine, Spain and Poland replace Denmark and Ireland in Europe - Subtotal 4 European: US$ 55 bn - Subtotal 4 Asian: US$ 57 bn - Total 15 : US$ 360 bn (+85%) - China replaces Japan in highest deficit - Middle East replaces Europe in 3rd - Outstanding growth of deficit in UK - Russia eliminates the deficit - 2 Asian and 1 African replaces 3 European out of the 15 - Subtotal 3 European: US$ 68 bn - Subtotal 7 Asian: US$ 210 bn MiddleEast (WTO) : Bahrain, Iran, Iraq, Israel, Jordan, Kuwait,Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, Yemen WTO Agriculturalproducts:SITC sections 0, 1, 2, 4 minus 27 and 28. Includes animal products, dairy, forestry, all beverages and tobacco. Brazil has shown the world’s highest surplus in agro trade, and China the highest deficit
What are the reasons for such a strong agro trade growth in Brazil ??
... one of the major reasons is that biomass productivity = water x soil x sun x science3 what are the reasons for such a strong agro trade growth in Brazil ?? ... and no other country in the world offers such a product of these 4 factors above in higher amount than Brazil
In: “Os desafios da Soja no Brasil”. Apres. APROSOJA, jun 2010 Fresh water availability
According BrasilAgro, Brazil has almost 25% of the world's land with more than 975 mm of rain per year. Water and energy crops energy crops (forestry & others)
World’s largest arable land area: cerrado (savannah) cerrado energy crops (forestry & others)
“Mapeamento dos Recursos de Energia Solar no Brasil” Divisão de Clima e Meio Ambiente – INPE Labsolar – UFSC, 2007 média diária Sun in Brazil and forestry assets forestry only (all purposes)
Science on productivity (EMBRAPA agro research company) Science and agro productivity in Brazil – example from grain crops Area - 000 ha or Production - 000 tonnes Productivity Kg / ha
Science and agro productivity in Brazil – example from forestry Brazil as a whole International Paper Company São Paulo state farms
Railways and energy crops
2011: Brazil the 4th most competitive on pellets ARA = Amsterdam, Rotterdam, Antwerp 2016: Brazil the 2nd most competitive on pellets Practically tied with the Russian price, if considering coastal pellet mills 162.0 161.0 176.5 173.5 220.0 190.0 6 8 8 2 4 0 5 6 Pellet Cost Breakdown 2016 CIF UK
Brasil x Russia: analytics of the cost breakdown changes from 2011 to 2016 162 161 8 2 Russia 2011 / 2016 190 6 8 200 5 6 4 0 Brazil 2011 / 2016
Brasil sounds to be the most competitive for pellet supply 162 190 6 8 4 0 Brazil 2011/2016 Essay towards a more reliable cost increase for CAPEX in Brazil from 2011 to 2016
Brazil offers the word’s highest productivity in forestry production www.iba.org
Brazil offers the word’s highest productivity in forestry production • 1 m3 of wet pinus with bark is equal to 0.828 tonne, resulting in 25.7 tonne/ha.year. 1.58 M ha of pinus, under 25.7 tonne/ha.year, is able to produce 41 Mtonne of pinus per year. • 1 m3 of wet eucalyptus with bark is equal to 0.868 tonne, resulting in 31.2 tonne/ha.year. 5.67 M ha of eucalyptus, under 31.2 tonne/ha.year, is able to produce 177 Mtonne of eucalyptus per year. Potential values for Brazil : www.iba.org
• Last years of crisis reduced internal consumption, so the FDI in forestry (large stocks available) and wood products (strongly dependent on internal demand ) were kept lower. • However, FDI in paper & pulp was kept in high, due to the world’s best competitivess on forestry and cellulose production. The later is strongly oriented (70%) to exports, then not being affected by the internal crisis. www.bcb.gov.br Last years of crisis in Brazil have not reduced the FDI in the Paper & Pulp sector
Brazil independent wood suppliers raised from 13% in 2006 to 42% in 2016 7,84 M ha www.iba.org
FAO – global forest products facts and figures 2016 17.2; 59% 2.6; 9% 9.2; 31% 0.2; 1% LAC = latin america and caribbean
Planted trees coverage area 2015 World production 2016: Forest-based energy products Mton Mm3 Mm3 Mm3 Mton Mm3 Source: faostat
12% of the biomass (normally the bark) goes to burning for drying the raw material
72% 64% 64% 59% Essays on the cost breakdown structure
Typical mix of a Canadian pellet plant
40,000 tonnes plant (5 t/h * 8,500 h * 95% efficiency) Essay on the statement of income for a year NO bank funding
Brazil pellets production - Kton
Brazil pellets exports: tonnage x price
Brazil pellets exports: tonnage x revenue
UK 7,086 97% USA 4,128 $188 $129 Canada 1,385 $156 $125 Latvia 939 $156 $163 Estonia 200 $153 $145 Italy 1,664 75% Croatia 150 $159 161 Slovenia 99 $201 $215 Korea 1,717 99% Viet Nam Malaysia Indonesia Denmark 2,054 93% 596 $142 $125 573 $140 $137 Russia 258 $137 $167 Sweden 27 $147 $113 Belgium 906 98% Germany 423 71% Poland Austria 392 96% Romania 190 $169 $160 Czech Rep 83 $187 $191 104 $167 $178 459 $208 $218 107 $214 $201 1,255 $97 $? 199 $100 $99 76 $107 $84 126 $113 $67 533 $177 $123 237 $158 $124 86 $134 $92 102 $169 $ 153 51 $227 $165 53 $134 $108 Japan 347 93% 62 $133 $? 133 $136 $104 173 $160 $184 84 $162 $146 158 $205 $193 Major Pellet Importers Total IMP - all world countries (kton) % of IMP supplied by the combined arrows 378 288 235 149 296 85 Brazil 36 33 $187 $160 Source: Trademap.org (United Nations) 94 $135 $123 73 $181 $163 73 $163 $246 Portugal Netherlands 141 38% 2016: 82% of the global trade flows prices of wood pellets (44.01.31.00), as declared by IMPORTERS – kton; $CIF price; $FOB price 168 $147 $145 UK 61 ITA 19 RUS; 61 $139 $111 94 $187 $146 143 $137 $135 33 $238 $251 20 $160 $282 LAT 47 $200 $170 86 $212 $224 World trade2016: ~17,000 kton/y World forecast 2025: ~42,000 - Japan 2025: 9,000, or 33,000 kton/yin 2030 if nuclearis replacedby biomass - Korea 2025: 8,200 kton/y 5 largest exporters 2016: 11,000 5 largest importers 2016: 13,500 (79% of the world) 5 largest importers 2025: 34,600 Sum of blue arrows 2016: 13,227 (78%) 50 $171 $102 ITA 63; JPN 260; KOR 35 CAN; 63 $172 $131 CAN; 261 $192 $131 CAN; 35 $157 $123 0 $0 $0 13 $286 $194 12 $135 $232 0 $0 $0 7 $116 $98 Kton ; CIF price; FOB price US$/ton (average) 635 $156 $125 ITA 30 $161 $146 4,709 2,373 332 1,611 946 610 358 215 257 Lithuania 47 125 54 $147 $132 33 $152 $143 19 $283 $163 15 $243 $188 307 1,326 1,073 228 LIT 68 $190 $187 USA; 19 $215 $? Country total exports in the reference year
Wood Chips Supply from Brazil
Wood Chips is a cutted material, and Hog Fuel is a crushed material Wood chips take the form of pieces with a defined particle size produced by mechanical treatment with sharp tools such as knives. Wood chips have a sub-rectangular shape with a typical length 5 to 50 mm and a low thickness compared to other dimensions. Hog fuel is wood fuel in the form of pieces of varying size and shape, produced by crushing with blunt tools such as rollers, hammers, or flails. Hog comes from the Norwegian word hogged, that means chopped in English. ISO 17225 - Fuel specifications and classes It consists of the following parts: Part 1: General requirements Part 2: Graded wood pellets Part 3: Graded wood briquettes Part 4: Graded wood chips Part 5: Graded firewood Part 6: Graded non-woody pellets Part 7: Graded non-woody briquettes
Introduction to wood chips specifications according to ISO EN 17225
Wood chips specifications according to ISO EN 17225 “Solid biofuels - fuel specifications and classes” Part 1 (EN 17225-1) General requirements Part 4 (EN 17225-4) Graded wood chips NOTE The European normatization rules, including EN 17225, normally measure the moisture contents considering the TOTAL WET MASS as denominator of the ratio for moisture (M % in weight over wet basis). The Brazilian normatization NBR 14929 sets the moisture measurement procedures for biomass. This norm considers the DRY MASS as denominator of the ratio for moisture. The sawn wood and energy wood sectors follow this rule (dry basis). However, the Braziliancellulose sector follows the European logic of measurement (wet basis).
Example of product declaration for wood chips: Grade B2 EN 17225 - 4
▪ MSW = Municipal Solid Waste ▪ RDF = Refuse Derived Fuel = MSW concentred to higher energy ▪ PDF = Packaging Derived Fuel : when not included in MSW, present lower challenges than MSW and RDF • Consumer PDF = residential sources - PDF plastic mix only - PDF wood + plastic - PDF paper +wood ▪ RF = Refuse Fuel condensed to Pellets (plastic contents) ▪ Fiber Residues = from wood and other agricultural sources ▪ Peat = fossil turf from the soil fuel rank Solid fuels matrix, according to heating value and challenge for use MJ/kg Eija Alakangas, VTT Bio-only fuels
Eucalyptus species differ in Brazil, and so the density differs too Moisture of wood have impact on density and on heating value Fresh wood (~56% moisture, over dry mass) Eucalyptus specie g/cm3 Age (years) ▪ Eucalyptus grandis is the most common type of firewood in Brazil ▪ The moisture of fresh E. grandis wood is here assumed as 56% ▪ The density of fresh wood is here assumed as 0,480 g/cm3 or 480 kg/m3 ▪ The density of wood chips from E. grandis is here assumed 300 kg/m3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 Wood Lower Heating Value kcal/kg | MJ/kg | MWh/ton Wood density (in average): Softwood (pinus) Hardwood (eucalyptus) 5,167 | 21,600 | 6 4,306 | 18,000 | 5 3,445 | 14,400 | 4 2,584 | 10,800 | 3 1,722 | 7,200 | 2 861 | 3,600 | 1
Solid fuels needed for: 1 GJ = 0.278 MWh = 0.239 Gcal = 0.948 MM BTU 10 MWh = 36 GJ = 8.60 Gcal = 34.12 MM BTU m3 Hans Hartmann TFZ - Technologie- und Förderzentrum im Kompetenzzentrum für Nachwachsende Rohstoffe Eija Alakangas VTT - Technical Research Centre of Finland 64 0,33
NOTE 2018 values are estimated by linear regression, taken by realistic values up to end of May. Source: comexstat.mdic.gov.br 1.6 Mton
Solid biomass fuels is the most used renewable energy source in EU-28 ▪ Biomass Energy use (solid fuels, liquid fuels and bioelectricity) is 59% larger than all other Renewable Energy Sources combined (wind, sun, hydro...). ▪ Solid biomass fuels use (wood chip, pellet, logged wood...) is 15% larger than wind + sun + hydro altogether. Wood chip is the most traded solid biofuel. Bioenergy = Energy from the biodegradable fraction of products, waste and residues from biological origin from agriculture (including vegetal and animal substances), forestry and related industries including fisheries and aquaculture, as well as the biodegradable fraction of industrial and municipal waste. other RES 7% = 72.2 bioenergy 10% =114.6 (59% larger than other RES: wind + sun + hydro) fossils 83% = 934.6 solid biomass 74% = 82.9 (15% larger than wind + sun + hydro) liquid fuels 12% = 14.2 bioelectricity 14% = 15.3
*When considering heating devices lower than 1 MW, marketed wood chip may be even larger source than residential fire wood log, which is locally sourced. 1 ktoe = one thousand tonne of oil equivalent = 41.87 Giga joules Wood chip is the most traded solid biofuel in EU-28, and probably* the most used one
Comparison of wood chips and pellet in the industrial consumption Plants > 100 MW (electricity + heat) will increase this consumption strongly in next years. odt = oven dried tonne = weight of wood fiber with no moisture at all
2016: A new era for the wood chip market www.hawkinswright.com Wood chips have been used in Europe for power and heat in small-scale plants (<20MW), using locally-sourced wood. However, since 2016 there is a trend for larger wood chip projects for combined heat & power (CHP). ▪ 2016 - Sweden Exergi, formerly Fortum Värme: Vartan plant 130 MW electric (MWe) and 280 MW thermal (MWth); 1Mt/y (green tonnes) of wood chips. ▪ 2017 - Denmark’s Ørsted, formerly Dong Energy, has shifted its focus away from wood pellets, choosing wood chips for its latest fossil fuel plant conversions. Skærbæk unit #3; 95 MWe/320 MWth CHP plant; 450 kt/y. Ørsted also has plans to convert its Asnæs unit #6 and Esbjerg plants to wood chips. ▪ 2017 - France, Uniper (2017): Gardanne plant 150 MWe / 500 MWth; 850 kt/y of wood chips. ▪ 2017 - Finland’s TSE: cofiring biomass at its 146 MWe / 250 MWth multi-fuel CHP plant and plans to increase its biomass use to around 60-70% by the end of 2018, which will be equivalent to around 1 Mt/y of wood chips. ▪ 2019 - Danish utility HOFOR: Amager plant will bring online its 150 MWe / 500 MWth BIO4 in 2019/20, which alone will consume 1.2 Mt/y of chips. The new projects over 50 MWe are unlikely to fulfil all their requirements from European resources alone. That issue was further highlighted this winter when tough weather conditions hampered forest harvesting in the Baltic region and caused a significant shortage of wood chips and pushed users to source elsewhere. The economies of scale that come with these larger volumes will help expand existing supply markets and open up new regions. Only the 5 CHP plants cited above demand 4.5 Mt/y of wood chips, three-fold the Brazilian exports in 2018.
EU-28 Energy Strategy and Targets ▪ On May 2014, The European Comission published the European Energy Security Strategy, which says: • The EU imports 53% of the energy it consumes: crude oil (90%), gas (66%), solid fuels (42%), nuclear fuel (40%). • Few Member States (6 – 8) have a dependency of natural gas from Russia lower than 1/3 of their needs. • Member States plan to add 29 Million tonnes of oil equivalent (Mtoe) of renewable heating and 39 Mtoe of renewable power between 2012 and 2020. These plans could be ‘front-loaded’ using national as well as European Structural Investment Funds, in coordination with European Investment Bank and others. • No objective target for H&C was appointed in the EU Energy Strategy document. ▪ On July 2015, the European Comission published the Communication on an EU strategy for Heating and Cooling: • Heating and cooling (H&C) takes ~50% of the EU energy consumption overall (32% is transport and 18% is electricity) and tends to stand so. 75% of this consumption comes from fossils (46% gas, 15% coal, 10% oil, 4% others). In political terms, more critical to Western Europe than environmental concerns, are the threats to the security of energy supply, due to the dependence on natural gas from Russia. • The H&C contribution is key to achieve the EU objectives on decarbonisation, demand reduction, security of supply and competitiveness. 90% of the renewable share of H&C comes from biomass. • But no objective target for H&C or biomass was appointed in the H&C Strategy document.
EU-28 Energy Strategy and Targets ▪ On November 2016, the European Commission presented the “Clean Energy for all Europeans”, a new package of measures with the goal of providing the stable legislative framework needed to facilitate the clean energy transition – and thereby taking a significant step towards the creation of the Energy Union. • Several parts of that package have been approved by the European Parliament in 2018. • However, no objective target for H&C or biomass yet. ▪ As part of its “Clean Energy for all Europeans” package (2016), the European Commission proposed a recast of the Renewable Energy Directive (2009) for the period 2021 – 2030 (RED II). A final compromise document was agreed among EU Institutions on June 14, 2018. • The new regulatory framework stipulates that a 32 % renewable energy target (overall) is to be achieved by the EU in 2030, a substantial increase compared to the 27 % originally proposed by the European Commission. • One of the directive’s most important and heavily debated figures was the Article 23, which requires member states to increase their proportion of renewable heat by 1.3 percentage points each year up to 2030. • During the consultation period, the renewable heating associations had asked for an annual increase of 2 percentage points of the renewable share in the heating sector.
Main Conclusions ▪ Heating is the big potential, bottleneck and political concern among all renewable energy applications in Europe. ▪ A major bottleneck is the engagement of citizens, in order to replace obsolete and inneficcient heating devices (actual replacement is less than 1% a year). National policies for funding new residential devices and research for cost reduction of devices are very expected, so to bring strong increase on biomass demand for heating systems. ▪ While the growth of biomass demand for residences relies on device replacement policies, the industrial demand boosts in Europe, notably for electricity production. The industrial demand of biomass for electricity appoints to very big potentials outside Europe as well, notably by the expected replacement of nuclear in Korea and Japan. ▪ Even though an impactful policy on the residential side hasn’t boosted demand yet, the demand for wood from the industrial side has already appointed to the concern on the security of sustainable biomass supply. Tough weather hampered forest harvestings, brought shortage of energy wood and pushed Europe to source elsewhere. ▪ The seek for lower costs has leaded new biomass-fired projects (notably combined heat and power - CHP) to move from pellets to wood chips. In 2016, the total consumption of pellets for power in Europe was 8.3 Mt. Only 5 new European CHP plants announced for commissioning in between 2016-2019 will demand 4.5 Mt/y of wood chips. ▪ As a leader in production and productivity, Brazil is becoming an important supplier of sustainable biomass for Europe (Portugal, France, Sweden, Italy, UK). Its 2018 exports are projected to 1.6 Mt of wood chips (China 940 kt; Japan 550 kt) and 230 kt of pellets (EU). In 2017, future pellet plants were announced in Brazil, moving its capacity from 500 kt/y to 3.0 Mton/y. One of them (400 kt/y) is being invested by the British power producer Drax Group.
Non-coniferous wood chips (including eucalyptus) Total in 2016: $ 3.59 bn China in 2016: $ 1.55 bn (43%) Japan in 2016: $ 1.50 bn (42%) Coniferous wood chips (pinus) Total in 2016: $ 844 m Japan in 2016: $ 247 m (29%) Turkey in 2016: $ 113 m (13%)
Carlos Gonzalez – Head of Operations • Experience in logistics for agricultural commodities since the age of 18, on sales of crops from the agricultural cooperatives at Brazilian midwest to the ports of Santos and Paranaguá • Experience in logistics in road, rail, fluvial and long course - the latter including all customs clearance and international freight • Worked for Ferronorte logistics demand studies and implementation of rail terminals and warehouse (silos) • 15 years of consulting for agricultural groups, advising in routes and construction of 74 silos for grains price hedging • Recent works focused on agribusiness, from the maintenance of agricultural machinery and operation of farms (outsourcing of preparation, planting, spraying and harvesting), and completing the value chain with commodities’ brokerage and logistics Jean Carlo Viterbo, MSc. – Head of Strategy • Bachelor in Business Administration, FGV Brazil; Specialization in Renewable Energy, UniKassel Germany; Master of Science in Naval Eng., USP Brazil; Specialization in Exponential Techs., Singularity University, NASA Ames & Google, Silicon Valley USA • Director at the Brazil India Chamber of Commerce • Evaluation of the competitiveness of Brazilian-borne ship machinery supply chain the for Oil & Gas Industry • Engineering and institutional assessment to promote new export routes for soya beans throughout Amazon waterways • Strategy consultant in several wind energy and agroenergy in Brazil (pellets and biodiesel). • First Brazilian to defend thesis on the matter of Offshore Wind Energy Team Brazil Brazil is, by far, the world’s superpower in agro trade surplus. However, it shows a complexity of institutional and logistical challenges so that choosing a reliable & competent operations & trade company, as like WBS bioenergy, is critical to deal with Brazil Agribusiness.
Global Market Brazil Register CNPJ : 22.225.637/0001-19

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Pellets final

  • 1.
    Opportunity for pelletsproduction in South America Basic data on the global market and supply from Brazil Claudio Langes Pesenti, Managing Director May – 2018 Brazil Register CNPJ : 22.225.637/0001-19
  • 2.
  • 3.
    Pellets (600 kg/m3; moisture7%; 17.5 Mj/kg; ash 0.7%)* Pellets are more standardized than chips, since the industrial processing so that every pellet has very similar (and higher) density and one-digit moisture. Those mean lower relative logistic cost. With uniform density of wood pellets and lower moisture, it is easier for the heater to provide a predictable, even rate of heating over a period, a concept referred to as being in "steady state“. Heat systems running at steady state will be more efficient and provide more reliable indoor comfort. Another critical advantage of pellets is the lower smoke and particulate matter emission. Wood Chips (250 - 300 kg/m3; 25% - 45% moisture ; 13.5 – 9.5 Mj/kg; 1.0 – 1.5% ash)* Lower industrialization, cheaper than pellets (even the higher relative logistic cost, wood chips still shows lower $/Mj, compared to pellets). They are chipped woody biomass in the form of pieces with a defined particle size produced by mechanical treatment with sharp tools such as knives. Wood chips have a sub-rectangular shape with a typical length 5 to 50 mm and a low thickness compared to other dimensions. Cutter chips, forest chips, green chips, stemwood chips, and whole-tree chips. *There are independent commercially acknowledged standards issued for pellets and wood chips, so the values above may vary accordingly.
  • 4.
  • 5.
    (16.5 Gj/tonne) Industrial EUpellet specs are different according to applications Residential Compared to A1 residential grade, industrial grade presents: • Lower requirements for diameter, length, temperature, ash content, mechanical durability and fines. • Higher requirements for bulk density variation.
  • 6.
    Compared to A1residential grade, industrial* grade presents: • Equal requirements for Nitrogen and Mercury. • Lower requirements for all other pollutants. *The industrial specs listed above refer to industrial grade I2 (the most commonly traded grade). Other industrial grades (I1, I3) are shown in this study. *The “ENplus B” shows tolerance levels for pollutants, ash and smoke, which are between the industrial and the residential grades (A1 and A2). So “ENplus B” is normally driven to non-residential applications as commercial buildings and small industries that are not driven to electricity or heating distribution. Industrial EU pellet specs are different according to applications Residential
  • 7.
    Top 10 pelletconsuming countries 2016 Global wood pellet demand 2016
  • 8.
  • 9.
    World demand forecast2025: Industrial + Residential use = 60 Mtonnes/y Industrial 2025 = 40 Mtonnes/y (15% pa) Residential 2025 = 20 Mtonnes/y (5% pa) 30,000 20,000 10,000 Replacing nuclear? Annual average market growth: ~3.8 Mtonnes/y
  • 10.
    The forecasted pricesfor long term agreement grow smoothly… … but the spot market prices are very volatile
  • 11.
    Additions to globalwood pellet production capacity (as of 2Q 2017)
  • 12.
  • 13.
    The future inthe European Union: in 2017, electricity from wind, solar and biomass exceeded that from coal for the first time biomass solar wind Hard coal & lignite TWh 21% 6% 4% 11%
  • 14.
    EU imports goeshigh, while internal production (excl. Russia) remains stable www.aebiom.org
  • 15.
    Non-residential use takes57,8% of pellets in Europe, mainly by the “Power only” plants, which consumes 33,1% of the total pellets volume.
  • 16.
    2015: Italy 3.1Mton for heating and UK 5.7 Mton for electricity
  • 17.
    2016: Italy 3.2Mton for heating and UK 6.4 Mton for electricity 2016
  • 18.
    The sizes offigures were redimensioned to keep the same scale for the price axis Czech Rep Bosnia Hz Montenegro Serbia Albania Poland Lithuania Ukraine Italy Germany Greece France Austria Spain Sweden Bosnia Hz Prices 2014 – 2017: €/ton; 1 pallet; 15 kg bags; at retail store; incl. VAT
  • 19.
    Prices 2014 –2017: €/ton; 1 truck; 6 ton bulk; delivered 100 km; incl. VAT The sizes of figures were redimensioned to keep the same scale for the price axis
  • 20.
  • 21.
    Brazil is 1of the 3 giants (2017) Bangladesh Pakistan Phillipines Nigeria Russia Australia Canada United States China Indonesia Mexico India Japan Germany United Kingdom France Italy Spain South Korea Brazil *GDP > $ 1 tri *GDP > $ 2 tri Area > 7 M km2 Population > 100 M *International Monetary Fund - World Economic Outlook Database, April 2018
  • 22.
    Brazil is 1of the 3 giants (2017) Pakistan Russia Australia Canada United States China Indonesia India Japan Germany United Kingdom France Brazil *GDP > $ 2 tri Area > 7 M km2 Population > 200 M *International Monetary Fund - World Economic Outlook Database, April 2018
  • 23.
    Source: http://unctad.org/en/PublicationsLibrary/wir2017_en.pdf After China,Brazil is the most preferred for Foreign Direct Investment, among emerging economies
  • 24.
    Source: http://atlas.media.mit.edu/en/visualize/tree_map/hs92/export/bra/all/show/2016/ Brazil totalamount of exports worldwide in 2016: US$ 226 billion Wood products $ 2.91 bn Cellulose & paper goods $ 8.55 bn
  • 25.
    Surplus Deficit 1995 2015 15 highestsurpluses and deficits in the Balance of Trade for agricultural products (US$ bn) Source: WTO merchandise trade values annual dataset - Total 15 : US$ 147 bn - USA with highest surplus. - Canada 2nd highest surplus - Netherlands with 3rd surplus - No significant surplus in Asia - Subtotal 4 European: US$ 38 bn - Subtotal 4 Asean: US$ 21 bn - Total 15 : US$ 194 bn - Japan had the highest deficit - China mainland had no significant deficit - European countries pravailed after Japan; Germany first in Europe - Significant deficit in Russia - Subotal 6 European: US$ 66 bn - Subtotal 4 Asian deficits: US$ 90 bn - Total 15 : US$ 304 bn (+107%) - Brazilian leadership (8 → 69 bn) - USA eliminates its surplus - Argentina raises to 2nd (10 → 32) - Canada down to 4th (20 → 25) - Big growth in Indonesia, Thailand - Ukraine, Spain and Poland replace Denmark and Ireland in Europe - Subtotal 4 European: US$ 55 bn - Subtotal 4 Asian: US$ 57 bn - Total 15 : US$ 360 bn (+85%) - China replaces Japan in highest deficit - Middle East replaces Europe in 3rd - Outstanding growth of deficit in UK - Russia eliminates the deficit - 2 Asian and 1 African replaces 3 European out of the 15 - Subtotal 3 European: US$ 68 bn - Subtotal 7 Asian: US$ 210 bn MiddleEast (WTO) : Bahrain, Iran, Iraq, Israel, Jordan, Kuwait,Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, Yemen WTO Agriculturalproducts:SITC sections 0, 1, 2, 4 minus 27 and 28. Includes animal products, dairy, forestry, all beverages and tobacco. Brazil has shown the world’s highest surplus in agro trade, and China the highest deficit
  • 26.
    What are thereasons for such a strong agro trade growth in Brazil ??
  • 27.
    ... one ofthe major reasons is that biomass productivity = water x soil x sun x science3 what are the reasons for such a strong agro trade growth in Brazil ?? ... and no other country in the world offers such a product of these 4 factors above in higher amount than Brazil
  • 28.
    In: “Os desafiosda Soja no Brasil”. Apres. APROSOJA, jun 2010 Fresh water availability
  • 29.
    According BrasilAgro, Brazil hasalmost 25% of the world's land with more than 975 mm of rain per year. Water and energy crops energy crops (forestry & others)
  • 30.
    World’s largest arableland area: cerrado (savannah) cerrado energy crops (forestry & others)
  • 31.
    “Mapeamento dos Recursosde Energia Solar no Brasil” Divisão de Clima e Meio Ambiente – INPE Labsolar – UFSC, 2007 média diária Sun in Brazil and forestry assets forestry only (all purposes)
  • 32.
    Science on productivity (EMBRAPA agro researchcompany) Science and agro productivity in Brazil – example from grain crops Area - 000 ha or Production - 000 tonnes Productivity Kg / ha
  • 33.
    Science and agroproductivity in Brazil – example from forestry Brazil as a whole International Paper Company São Paulo state farms
  • 34.
  • 35.
    2011: Brazil the4th most competitive on pellets ARA = Amsterdam, Rotterdam, Antwerp 2016: Brazil the 2nd most competitive on pellets Practically tied with the Russian price, if considering coastal pellet mills 162.0 161.0 176.5 173.5 220.0 190.0 6 8 8 2 4 0 5 6 Pellet Cost Breakdown 2016 CIF UK
  • 36.
    Brasil x Russia:analytics of the cost breakdown changes from 2011 to 2016 162 161 8 2 Russia 2011 / 2016 190 6 8 200 5 6 4 0 Brazil 2011 / 2016
  • 37.
    Brasil sounds tobe the most competitive for pellet supply 162 190 6 8 4 0 Brazil 2011/2016 Essay towards a more reliable cost increase for CAPEX in Brazil from 2011 to 2016
  • 38.
    Brazil offers theword’s highest productivity in forestry production www.iba.org
  • 39.
    Brazil offers theword’s highest productivity in forestry production • 1 m3 of wet pinus with bark is equal to 0.828 tonne, resulting in 25.7 tonne/ha.year. 1.58 M ha of pinus, under 25.7 tonne/ha.year, is able to produce 41 Mtonne of pinus per year. • 1 m3 of wet eucalyptus with bark is equal to 0.868 tonne, resulting in 31.2 tonne/ha.year. 5.67 M ha of eucalyptus, under 31.2 tonne/ha.year, is able to produce 177 Mtonne of eucalyptus per year. Potential values for Brazil : www.iba.org
  • 40.
    • Last yearsof crisis reduced internal consumption, so the FDI in forestry (large stocks available) and wood products (strongly dependent on internal demand ) were kept lower. • However, FDI in paper & pulp was kept in high, due to the world’s best competitivess on forestry and cellulose production. The later is strongly oriented (70%) to exports, then not being affected by the internal crisis. www.bcb.gov.br Last years of crisis in Brazil have not reduced the FDI in the Paper & Pulp sector
  • 41.
    Brazil independent woodsuppliers raised from 13% in 2006 to 42% in 2016 7,84 M ha www.iba.org
  • 42.
    FAO – globalforest products facts and figures 2016 17.2; 59% 2.6; 9% 9.2; 31% 0.2; 1% LAC = latin america and caribbean
  • 43.
    Planted trees coveragearea 2015 World production 2016: Forest-based energy products Mton Mm3 Mm3 Mm3 Mton Mm3 Source: faostat
  • 45.
    12% of thebiomass (normally the bark) goes to burning for drying the raw material
  • 46.
    72% 64% 64% 59% Essayson the cost breakdown structure
  • 47.
    Typical mix ofa Canadian pellet plant
  • 48.
    40,000 tonnes plant(5 t/h * 8,500 h * 95% efficiency) Essay on the statement of income for a year NO bank funding
  • 49.
  • 50.
    Brazil pellets exports:tonnage x price
  • 51.
    Brazil pellets exports:tonnage x revenue
  • 52.
    UK 7,086 97% USA 4,128 $188 $129 Canada 1,385 $156 $125 Latvia 939$156 $163 Estonia 200 $153 $145 Italy 1,664 75% Croatia 150 $159 161 Slovenia 99 $201 $215 Korea 1,717 99% Viet Nam Malaysia Indonesia Denmark 2,054 93% 596 $142 $125 573 $140 $137 Russia 258 $137 $167 Sweden 27 $147 $113 Belgium 906 98% Germany 423 71% Poland Austria 392 96% Romania 190 $169 $160 Czech Rep 83 $187 $191 104 $167 $178 459 $208 $218 107 $214 $201 1,255 $97 $? 199 $100 $99 76 $107 $84 126 $113 $67 533 $177 $123 237 $158 $124 86 $134 $92 102 $169 $ 153 51 $227 $165 53 $134 $108 Japan 347 93% 62 $133 $? 133 $136 $104 173 $160 $184 84 $162 $146 158 $205 $193 Major Pellet Importers Total IMP - all world countries (kton) % of IMP supplied by the combined arrows 378 288 235 149 296 85 Brazil 36 33 $187 $160 Source: Trademap.org (United Nations) 94 $135 $123 73 $181 $163 73 $163 $246 Portugal Netherlands 141 38% 2016: 82% of the global trade flows prices of wood pellets (44.01.31.00), as declared by IMPORTERS – kton; $CIF price; $FOB price 168 $147 $145 UK 61 ITA 19 RUS; 61 $139 $111 94 $187 $146 143 $137 $135 33 $238 $251 20 $160 $282 LAT 47 $200 $170 86 $212 $224 World trade2016: ~17,000 kton/y World forecast 2025: ~42,000 - Japan 2025: 9,000, or 33,000 kton/yin 2030 if nuclearis replacedby biomass - Korea 2025: 8,200 kton/y 5 largest exporters 2016: 11,000 5 largest importers 2016: 13,500 (79% of the world) 5 largest importers 2025: 34,600 Sum of blue arrows 2016: 13,227 (78%) 50 $171 $102 ITA 63; JPN 260; KOR 35 CAN; 63 $172 $131 CAN; 261 $192 $131 CAN; 35 $157 $123 0 $0 $0 13 $286 $194 12 $135 $232 0 $0 $0 7 $116 $98 Kton ; CIF price; FOB price US$/ton (average) 635 $156 $125 ITA 30 $161 $146 4,709 2,373 332 1,611 946 610 358 215 257 Lithuania 47 125 54 $147 $132 33 $152 $143 19 $283 $163 15 $243 $188 307 1,326 1,073 228 LIT 68 $190 $187 USA; 19 $215 $? Country total exports in the reference year
  • 53.
  • 54.
    Wood Chips isa cutted material, and Hog Fuel is a crushed material Wood chips take the form of pieces with a defined particle size produced by mechanical treatment with sharp tools such as knives. Wood chips have a sub-rectangular shape with a typical length 5 to 50 mm and a low thickness compared to other dimensions. Hog fuel is wood fuel in the form of pieces of varying size and shape, produced by crushing with blunt tools such as rollers, hammers, or flails. Hog comes from the Norwegian word hogged, that means chopped in English. ISO 17225 - Fuel specifications and classes It consists of the following parts: Part 1: General requirements Part 2: Graded wood pellets Part 3: Graded wood briquettes Part 4: Graded wood chips Part 5: Graded firewood Part 6: Graded non-woody pellets Part 7: Graded non-woody briquettes
  • 55.
    Introduction to woodchips specifications according to ISO EN 17225
  • 56.
    Wood chips specificationsaccording to ISO EN 17225 “Solid biofuels - fuel specifications and classes” Part 1 (EN 17225-1) General requirements Part 4 (EN 17225-4) Graded wood chips NOTE The European normatization rules, including EN 17225, normally measure the moisture contents considering the TOTAL WET MASS as denominator of the ratio for moisture (M % in weight over wet basis). The Brazilian normatization NBR 14929 sets the moisture measurement procedures for biomass. This norm considers the DRY MASS as denominator of the ratio for moisture. The sawn wood and energy wood sectors follow this rule (dry basis). However, the Braziliancellulose sector follows the European logic of measurement (wet basis).
  • 57.
    Example of productdeclaration for wood chips: Grade B2 EN 17225 - 4
  • 58.
    ▪ MSW =Municipal Solid Waste ▪ RDF = Refuse Derived Fuel = MSW concentred to higher energy ▪ PDF = Packaging Derived Fuel : when not included in MSW, present lower challenges than MSW and RDF • Consumer PDF = residential sources - PDF plastic mix only - PDF wood + plastic - PDF paper +wood ▪ RF = Refuse Fuel condensed to Pellets (plastic contents) ▪ Fiber Residues = from wood and other agricultural sources ▪ Peat = fossil turf from the soil fuel rank Solid fuels matrix, according to heating value and challenge for use MJ/kg Eija Alakangas, VTT Bio-only fuels
  • 59.
    Eucalyptus species differin Brazil, and so the density differs too Moisture of wood have impact on density and on heating value Fresh wood (~56% moisture, over dry mass) Eucalyptus specie g/cm3 Age (years) ▪ Eucalyptus grandis is the most common type of firewood in Brazil ▪ The moisture of fresh E. grandis wood is here assumed as 56% ▪ The density of fresh wood is here assumed as 0,480 g/cm3 or 480 kg/m3 ▪ The density of wood chips from E. grandis is here assumed 300 kg/m3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 farm 1 farm 2 farm 3 Wood Lower Heating Value kcal/kg | MJ/kg | MWh/ton Wood density (in average): Softwood (pinus) Hardwood (eucalyptus) 5,167 | 21,600 | 6 4,306 | 18,000 | 5 3,445 | 14,400 | 4 2,584 | 10,800 | 3 1,722 | 7,200 | 2 861 | 3,600 | 1
  • 60.
    Solid fuels neededfor: 1 GJ = 0.278 MWh = 0.239 Gcal = 0.948 MM BTU 10 MWh = 36 GJ = 8.60 Gcal = 34.12 MM BTU m3 Hans Hartmann TFZ - Technologie- und Förderzentrum im Kompetenzzentrum für Nachwachsende Rohstoffe Eija Alakangas VTT - Technical Research Centre of Finland 64 0,33
  • 61.
    NOTE 2018 values are estimatedby linear regression, taken by realistic values up to end of May. Source: comexstat.mdic.gov.br 1.6 Mton
  • 62.
    Solid biomass fuelsis the most used renewable energy source in EU-28 ▪ Biomass Energy use (solid fuels, liquid fuels and bioelectricity) is 59% larger than all other Renewable Energy Sources combined (wind, sun, hydro...). ▪ Solid biomass fuels use (wood chip, pellet, logged wood...) is 15% larger than wind + sun + hydro altogether. Wood chip is the most traded solid biofuel. Bioenergy = Energy from the biodegradable fraction of products, waste and residues from biological origin from agriculture (including vegetal and animal substances), forestry and related industries including fisheries and aquaculture, as well as the biodegradable fraction of industrial and municipal waste. other RES 7% = 72.2 bioenergy 10% =114.6 (59% larger than other RES: wind + sun + hydro) fossils 83% = 934.6 solid biomass 74% = 82.9 (15% larger than wind + sun + hydro) liquid fuels 12% = 14.2 bioelectricity 14% = 15.3
  • 63.
    *When considering heatingdevices lower than 1 MW, marketed wood chip may be even larger source than residential fire wood log, which is locally sourced. 1 ktoe = one thousand tonne of oil equivalent = 41.87 Giga joules Wood chip is the most traded solid biofuel in EU-28, and probably* the most used one
  • 64.
    Comparison of woodchips and pellet in the industrial consumption Plants > 100 MW (electricity + heat) will increase this consumption strongly in next years. odt = oven dried tonne = weight of wood fiber with no moisture at all
  • 65.
    2016: A newera for the wood chip market www.hawkinswright.com Wood chips have been used in Europe for power and heat in small-scale plants (<20MW), using locally-sourced wood. However, since 2016 there is a trend for larger wood chip projects for combined heat & power (CHP). ▪ 2016 - Sweden Exergi, formerly Fortum Värme: Vartan plant 130 MW electric (MWe) and 280 MW thermal (MWth); 1Mt/y (green tonnes) of wood chips. ▪ 2017 - Denmark’s Ørsted, formerly Dong Energy, has shifted its focus away from wood pellets, choosing wood chips for its latest fossil fuel plant conversions. Skærbæk unit #3; 95 MWe/320 MWth CHP plant; 450 kt/y. Ørsted also has plans to convert its Asnæs unit #6 and Esbjerg plants to wood chips. ▪ 2017 - France, Uniper (2017): Gardanne plant 150 MWe / 500 MWth; 850 kt/y of wood chips. ▪ 2017 - Finland’s TSE: cofiring biomass at its 146 MWe / 250 MWth multi-fuel CHP plant and plans to increase its biomass use to around 60-70% by the end of 2018, which will be equivalent to around 1 Mt/y of wood chips. ▪ 2019 - Danish utility HOFOR: Amager plant will bring online its 150 MWe / 500 MWth BIO4 in 2019/20, which alone will consume 1.2 Mt/y of chips. The new projects over 50 MWe are unlikely to fulfil all their requirements from European resources alone. That issue was further highlighted this winter when tough weather conditions hampered forest harvesting in the Baltic region and caused a significant shortage of wood chips and pushed users to source elsewhere. The economies of scale that come with these larger volumes will help expand existing supply markets and open up new regions. Only the 5 CHP plants cited above demand 4.5 Mt/y of wood chips, three-fold the Brazilian exports in 2018.
  • 66.
    EU-28 Energy Strategyand Targets ▪ On May 2014, The European Comission published the European Energy Security Strategy, which says: • The EU imports 53% of the energy it consumes: crude oil (90%), gas (66%), solid fuels (42%), nuclear fuel (40%). • Few Member States (6 – 8) have a dependency of natural gas from Russia lower than 1/3 of their needs. • Member States plan to add 29 Million tonnes of oil equivalent (Mtoe) of renewable heating and 39 Mtoe of renewable power between 2012 and 2020. These plans could be ‘front-loaded’ using national as well as European Structural Investment Funds, in coordination with European Investment Bank and others. • No objective target for H&C was appointed in the EU Energy Strategy document. ▪ On July 2015, the European Comission published the Communication on an EU strategy for Heating and Cooling: • Heating and cooling (H&C) takes ~50% of the EU energy consumption overall (32% is transport and 18% is electricity) and tends to stand so. 75% of this consumption comes from fossils (46% gas, 15% coal, 10% oil, 4% others). In political terms, more critical to Western Europe than environmental concerns, are the threats to the security of energy supply, due to the dependence on natural gas from Russia. • The H&C contribution is key to achieve the EU objectives on decarbonisation, demand reduction, security of supply and competitiveness. 90% of the renewable share of H&C comes from biomass. • But no objective target for H&C or biomass was appointed in the H&C Strategy document.
  • 67.
    EU-28 Energy Strategyand Targets ▪ On November 2016, the European Commission presented the “Clean Energy for all Europeans”, a new package of measures with the goal of providing the stable legislative framework needed to facilitate the clean energy transition – and thereby taking a significant step towards the creation of the Energy Union. • Several parts of that package have been approved by the European Parliament in 2018. • However, no objective target for H&C or biomass yet. ▪ As part of its “Clean Energy for all Europeans” package (2016), the European Commission proposed a recast of the Renewable Energy Directive (2009) for the period 2021 – 2030 (RED II). A final compromise document was agreed among EU Institutions on June 14, 2018. • The new regulatory framework stipulates that a 32 % renewable energy target (overall) is to be achieved by the EU in 2030, a substantial increase compared to the 27 % originally proposed by the European Commission. • One of the directive’s most important and heavily debated figures was the Article 23, which requires member states to increase their proportion of renewable heat by 1.3 percentage points each year up to 2030. • During the consultation period, the renewable heating associations had asked for an annual increase of 2 percentage points of the renewable share in the heating sector.
  • 68.
    Main Conclusions ▪ Heatingis the big potential, bottleneck and political concern among all renewable energy applications in Europe. ▪ A major bottleneck is the engagement of citizens, in order to replace obsolete and inneficcient heating devices (actual replacement is less than 1% a year). National policies for funding new residential devices and research for cost reduction of devices are very expected, so to bring strong increase on biomass demand for heating systems. ▪ While the growth of biomass demand for residences relies on device replacement policies, the industrial demand boosts in Europe, notably for electricity production. The industrial demand of biomass for electricity appoints to very big potentials outside Europe as well, notably by the expected replacement of nuclear in Korea and Japan. ▪ Even though an impactful policy on the residential side hasn’t boosted demand yet, the demand for wood from the industrial side has already appointed to the concern on the security of sustainable biomass supply. Tough weather hampered forest harvestings, brought shortage of energy wood and pushed Europe to source elsewhere. ▪ The seek for lower costs has leaded new biomass-fired projects (notably combined heat and power - CHP) to move from pellets to wood chips. In 2016, the total consumption of pellets for power in Europe was 8.3 Mt. Only 5 new European CHP plants announced for commissioning in between 2016-2019 will demand 4.5 Mt/y of wood chips. ▪ As a leader in production and productivity, Brazil is becoming an important supplier of sustainable biomass for Europe (Portugal, France, Sweden, Italy, UK). Its 2018 exports are projected to 1.6 Mt of wood chips (China 940 kt; Japan 550 kt) and 230 kt of pellets (EU). In 2017, future pellet plants were announced in Brazil, moving its capacity from 500 kt/y to 3.0 Mton/y. One of them (400 kt/y) is being invested by the British power producer Drax Group.
  • 69.
    Non-coniferous wood chips (includingeucalyptus) Total in 2016: $ 3.59 bn China in 2016: $ 1.55 bn (43%) Japan in 2016: $ 1.50 bn (42%) Coniferous wood chips (pinus) Total in 2016: $ 844 m Japan in 2016: $ 247 m (29%) Turkey in 2016: $ 113 m (13%)
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    Carlos Gonzalez –Head of Operations • Experience in logistics for agricultural commodities since the age of 18, on sales of crops from the agricultural cooperatives at Brazilian midwest to the ports of Santos and Paranaguá • Experience in logistics in road, rail, fluvial and long course - the latter including all customs clearance and international freight • Worked for Ferronorte logistics demand studies and implementation of rail terminals and warehouse (silos) • 15 years of consulting for agricultural groups, advising in routes and construction of 74 silos for grains price hedging • Recent works focused on agribusiness, from the maintenance of agricultural machinery and operation of farms (outsourcing of preparation, planting, spraying and harvesting), and completing the value chain with commodities’ brokerage and logistics Jean Carlo Viterbo, MSc. – Head of Strategy • Bachelor in Business Administration, FGV Brazil; Specialization in Renewable Energy, UniKassel Germany; Master of Science in Naval Eng., USP Brazil; Specialization in Exponential Techs., Singularity University, NASA Ames & Google, Silicon Valley USA • Director at the Brazil India Chamber of Commerce • Evaluation of the competitiveness of Brazilian-borne ship machinery supply chain the for Oil & Gas Industry • Engineering and institutional assessment to promote new export routes for soya beans throughout Amazon waterways • Strategy consultant in several wind energy and agroenergy in Brazil (pellets and biodiesel). • First Brazilian to defend thesis on the matter of Offshore Wind Energy Team Brazil Brazil is, by far, the world’s superpower in agro trade surplus. However, it shows a complexity of institutional and logistical challenges so that choosing a reliable & competent operations & trade company, as like WBS bioenergy, is critical to deal with Brazil Agribusiness.
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    Global Market Brazil RegisterCNPJ : 22.225.637/0001-19