North Carolina's Role in the Global Biomass Energy Market - UNC Chapel Hill

The European Union (EU), Japan, and other industrialized nations have made

commitments to increasing the amount of total energy generation from renewable

sources because of long-standing climate concerns and growing dissatisfaction with

nuclear power in response to the Fukushima nuclear reactor disaster in Japan. Wood

and biomass derived energy is particularly attractive because of the availability of global

woody biomass feedstock.

The Kenan Institute will conduct a comprehensive analysis of EU, Japanese and other

global markets that could potentially compete for NC wood and biomass supplies. The

research will include:

1. Comprehensive assessment of the current global market with specific focus on the

EU and Japan for wood / biomass supplies; 2. Compilation and analysis of global and

domestic public policy and the impact of these policies on the global markets that relate

to renewable energy generation; 3.Projection of long-term foreign market demands and

the effects this will have on price sensitivity and the long term effect on NC based

biomass production facilities and NC port facilities; 4. Assessment of NC’s ability to

achieve biofuel goals with woody biomass feedstock and balance other competing

markets which include foreign, power, biofuel and forest products markets.

As outlined above, a general overview of pellet demand will include an assessment of

the buyers and consumers by nation. Compilation of the volume of imports broken

down chronologically by country and end use (heating vs. electricity) and prices will

allow for a simple regression analysis to help understand what drives price and to

provide a baseline for forward modeling of demand and prices. Because the EU market

is driven in large part by legislation, we also will provide a thorough analysis of EU

climate targets and timelines by country. This analysis will allow us to begin to

determine what are the drivers of pellet prices, e.g. CO2 price, EU/EC legislation,

phase-out of coal and nuclear power, fossil fuel prices, other renewable energy prices,

transportation costs, cost of stoves (for consumer-level heating), and competition for

feedstock.

Our assessment of exporters will include the volume of exports, distribution of pellet

plants, transportation modes/costs, and prices all along the industry value chain

(stump/delivered timber prices by state, FOB port, etc.) will be part of this analysis.