Creating a sustainable and scalable supply chain - Platts · These are our „oilfields“ easy to...
Transcript of Creating a sustainable and scalable supply chain - Platts · These are our „oilfields“ easy to...
Creating a sustainable and scalable supply chain
Christian Rakos
These are our „oilfields“
easy to find
can be established
slower to produce
never decline if properly managed
produce competitive fuel: 56$/bbl OE
The potential of producing biomass from forests and agricultural land is very large
US DOE: in the US one billion tons per year - equivalent to 3 BBOE could be produced
Annual global primary biomass production: 4500 EJ, Global Energy demand 2007 470 EJ
5% = 225 EJ would cover almost 50% of current global energy demand (World Bioenergy Association)
An example of a pellet supply chain
Waycross, Georgia Plant owned & operated by RWE Production: 750.000mt p.a.
Demand - the essential precondition for establishing supply chains
Demand for pellets for power production has been established by EU policies to reduce CO2 emissions and increase renewable energy use
Demand for pellets for heating is created by their economic advantages (currently 50% cheaper than heating oil)
Pellets use in Europe grows at 20% p.a. and will exceed 20 Million tons by 2015
What are the risks regarding demand?
Dependence on policy: incentives for power production are indispensable
Heat market: weather related change of demand, captured consumers
Preconditions for successful supply chain development
access to sustainable sources of raw material
proper production location
dedicated and certified quality management
efficient logistics
Sustainability of raw material supply is essential
Utilities are under scrutiny by NGOs and insist on sustainability
Requirements include: maintenance of carbon stocks, respect of protected areas, impacts on soil, air and water, respect of need of local communities, of labour rights etc.
EU is considering to publish binding sustainability criteria
How can sustainability be proven?
use of existing forest certification schemes
calculation of CO2 emissions along the supply chain
a dedicated sustainability certification scheme currently discussed by utilities
Criteria for adequate new production locations
Typically outside of central Europe
Close to a fiber basket
Often brown field developments on sites of closed sawmills, boardmills
Close to a harbour, rail access
Pellet quality: ENplus certification
Certification scheme developed to guarantee consistent pellet quality in the heat market
ENplus is now industry standard in the heat market
Now extended to pellets for power
Adds value by reducing risk of buyer
Will allow flexible use of pellets both in heat and power markets
Will include sustainability requirements
Conclusions
pellet markets offer very promising business development opportunities
sustainability of production is both a requirement and an advantage
Professional and certified management of quality is indispensable
Efficient management of logistics is as important as for other commodities
Thank you for your attention!