NNFCC Market Review, October 2013, Page 1 of 8

Feedstocks

Highlights

Page 2 Land use

Page 2 Wood

Page 4 Crops

Page 6 Waste

Page 7 Events

Page 8 Feedstock Prices

NNFCC Market Review Issue Nineteen, October 2013

ach month we review the latest

announcements and news from

across the global crops, wood and

wastes industries that supply bio-based

markets. This service is exclusively for our

members.

Foreword

Welcome to the October 2013 issue of our

market review for biomass feedstocks. This

month, a working group of the

Intergovernmental Panel on Climate Change

(IPCC) published its contribution towards the 5th

Assessment Report on Climate Change, due to

be published in October 2014.

The report, Climate Change 2013: the Physical

Science Basis, highlights the gravity of climate

change and concludes that we can be 95%

certain that the "human influence on climate

caused more than half the observed increase in

global average surface temperatures from

1951-2010." It therefore remains imperative that

any renewable form of energy demonstrates

significant emission savings on fossil fuel

comparators.

There has been much discussion in the UK over

the true carbon benefits of bioenergy this last

year following the release of a damning report

by the RSPB, FOE and Greenpeace entitled

Dirtier than coal? The report highlighted that

using biomass in place of coal could increase

carbon emissions by at least 49% over a 40 year

period.

However, a report published this month by a

collaboration of North American pellet and

European bioenergy associations has clarified

that such studies (which conclude that

bioenergy offers little value in reducing carbon

emissions) often use unrealistic assumptions over

forest management practices (e.g. use of whole

trees for bioenergy) which would correspond to

the delivery of poor economic returns. When

assuming that forests are managed efficiently,

the report concludes that large carbon savings

can be achieved following a short carbon

payback period of just 3 years.

The findings indicate that bioenergy can still

play an important role in decarbonising the

energy industry and mitigating the worst

impacts of climate change.

Read on for all the latest sector news.

E

NNFCC Market Review, October 2013, Page 2 of 8

Land use

One billion acres of abandoned

cropland estimated to be available

for bioenergy production

Source: FWI

One billion acres of abandoned cropland

around the world could provide sustainable

energy storage, according to a new study

that promotes biomass as a key player in

sustainable energy development. Using these

lands for energy crops, instead of converting

existing croplands or clearing new land,

avoids competition with food production and

preserves carbon-storing forests needed to

mitigate climate change.

The study, published by the Department of

Global Ecology, Carnegie Institution,

estimates the global extent of abandoned

crop and pastureland and calculated their

potential for sustainable bioenergy

production from historical land-use data,

satellite imaging and ecosystem models.

The study lists three broad categories of crops

that have potential for bioenergy: food crops,

local native plants and special bioenergy

crops such as switchgrass or elephant grass.

Using a wide range of biomass yields and

conversion efficiencies, potential bioenergy

production has an upper-limit of 5%-30% of

the current US primary energy demand,

according to the study.

The largest potential for production is in the

US, followed by Brazil and Australia—all of

which have extensive areas of abandoned

crop and pasture lands. Within the US, the

east and mid-west have the greatest

potential.

Click here for more information.

Wood

Electricity from wood pellets yields

quick carbon savings according to

new report

A new report prepared by the European

Biomass Association, BC Bioenergy Network,

U.S. Industrial Wood Pellet Association and

Wood Pellet Association of Canada says

wood pellets imported to Europe from the

Southeast U.S. and British Columbia, Canada,

for electricity production have immediate or

very rapid contribution to climate change

mitigation.

The report, “Forest Sustainability and Carbon

Balance of EU Importation of North American

Forest Biomass for Bioenergy Production”,

states that there are fundamental flaws in

prominent studies that have found forest-

based bioenergy to be associated with long-

term carbon deficits and long carbon

repayment periods. Specifically, those studies

are generally based on modeling

assumptions that do not correspond with

current and expected production and are

therefore not representative of actual industry

practices.

A central finding of this study is that when

realistic assumptions are applied, production

of energy from woody biomass results in

carbon debt and foregone sequestration that

are very small compared to the substantial

carbon savings that are achieved over time.

The report further concludes that there is a

critical difference between a small and

temporary “carbon debt,” when one might

exist, and the permanent fossil carbon

emissions savings achieved by use of

bioenergy rather than fossil fuels.

Click here for more information.

NNFCC Market Review, October 2013, Page 3 of 8

Impact of climate change on forests

requires early action

Forest managers are encouraged to take early

action in response to climate change, Source: FAO

Early action and more investments are

needed to respond to the threats of climate

change on the world's forests. It will probably

cost less to adjust forest management

strategies immediately to the impacts of

climate change than to react to the

aftermath of climate-inflicted damage, FAO

said in its new Climate change guidelines for

forest managers.

Early action will also help to improve the

livelihoods and food security of local

communities. Decreased forest ecosystem

services, especially water-cycle regulation,

soil protection and the conservation of

biodiversity, may affect millions of people in

rural areas, who use forests for food, fuel,

timber, medicines and income.

The document provides guidance on how to

identify, assess and prioritize options for

adjusting forest management practices in

response to climate change.

Click here for more information.

Canadian pellet production,

consumption grows rapidly

An annual Canadian bioenergy report filed

with the USDA Foreign Agricultural Service’s

Global Information Network provides an

overview of the rapidly expanding Canadian

pellet industry. Citing data provided by the

Canadian Wood Pellet Association, the report

notes that Canada was home to 42 pellet

plants in 2012, with a combined capacity of 3

million metric tons. Approximately 65 percent

of that capacity is located in British Columbia.

In 2010, the country had only 33 plants with a

combined production capacity of 2 million

tons. Capacity is expected to reach 46 plants

and 3.7 million tons this year.

Canadian pellet producers have utilized

approximately 66 percent of capacity in

recent years, producing 2 million tons of

pellets in 2012. Production is expected to

reach 2.5 million tons this year, and increase

to 3.2 million metric tons in 2014.

Last year, Canadian producers exported 1.4

million metric tons of pellets. Exports are

expected to increase to 1.7 million tons this

year, and 2.2 million metric tons next year.

Domestic consumption of pellets in Canada

has also increased in recent years, rising from

65,000 metric tons in 2011 to 233,000 metric

tons last year. Consumption is expected to

reach 690,000 metric tons by next year.

Click here for more information.

Stobart wins new biomass contract

The Western Bioenergy biomass plant in Port Talbot,

Source: Lets Recycle

Stobart Biomass has signed a 15-year

feedstock contract for the 14.7MW Western

Bioenergy Limited biomass facility in South

Wales, which will see a ‘significant’ increase in

the amount of waste wood processed at the

plant.

According to Stobart,around 150,000 tonnes

of virgin and waste wood will be provided by

NNFCC Market Review, October 2013, Page 4 of 8

Stobart under the contract the contract.

Initially, a mix of 80% virgin wood and 20%

grade A recycled wood will be supplied,

moving to 57% and 43% respectively following

planned upgrades to the plant, which are

due to begin in summer 2014.

The biomass fuel company, a subsidiary of

Stobart Group, will supply around 50% of the

feedstock itself and manage and process the

remainder, which will be supplied by an

unnamed third party. At present, Western

Bionergy gives the Forestry Commission as the

largest single supplier to the plant.

Furthermore, Stobart Group’s estates division

has invested £800,000 to take a ‘small’ stake

in the Port Talbot plant, which has just been

acquired by Green Investment Bank (GIB)’s

fund, Greensphere Capital LLP.

Click here for more information.

Pellet facility at North Carolina port

approved

Port of Morehead City, Source: Port Strategy

North Carolina's Council of State has

approved a 20-year agreement between the

North Carolina State Ports Authority and

WoodFuels L.L.C. concerning the construction

of a wood pellet export facility at the Port of

Morehead City.

According to the pact's terms, WoodFuels

would finance and build a $25 million export

facility at the port to receive, store and load

wood pellets for export to Europe, where the

material would be used as a renewable

energy source. The facility would receive the

first shipment of pellets in late 2014.

The development is expected to generate

annual revenue from $1.2 million to $2 million,

and provide $840,000 that could be

reinvested into the Port of Morehead City

each year.

Earlier this year, the authority completed a

deal with Enviva Holdings L.P. to construct

and operate a similar facility at the Port of

Wilmington by early 2015.

Click here for more information.

Crops

US corn sales fall most since ’75 as

farmers harvest crop

The biggest fall in demand for US corn since

1975 in the past year has left a bigger-than-

forecast surplus stacked in silos just as farmers

begin reaping what the government says will

be the world’s largest-ever crop.

Domestic consumption and exports fell a

combined 10 percent in the year ending

August 31, government data show. Total

supply after the harvest starts this month will

rise 24 percent to 14.5 billion bushels (369

million metric tons) as fields recover from last

year’s drought, according to the average of

28 analyst estimates compiled by Bloomberg.

Goldman Sachs Group Inc. analysts say corn

will drop to $4.25 a bushel in three months, or

6.1 percent below current price.

The U.S. will reap 28 percent more corn this

season, doubling inventories before next

year’s harvest after losing market share to

shippers in Brazil, Argentina and Ukraine.

Global supply is surging after prices reached

a record $8.29 in 2012 and futures are

heading for the biggest annual drop in at

least five decades. Cheaper grain is boosting

profit for bioethanol producers such as

Archer- Daniels-Midland Co.

Click here for more information.

NNFCC Market Review, October 2013, Page 5 of 8

Global hunger down, but millions still

chronically hungry

Some 842 million people, or roughly one in

eight, suffered from chronic hunger in 2011-

13, not getting enough food to lead active

and healthy lives according to a report

released by the UN food agencies.

The number is down from 868 million reported

for the 2010-12 period, according to the State

of Food Insecurity in the World (SOFI 2013),

published every year by the Food and

Agriculture Organization (FAO), the

International Fund for Agricultural

Development (IFAD) and the World Food

Programme (WFP).

The vast majority of hungry people live in

developing regions, while 15.7 million live in

developed countries.

Continued economic growth in developing

countries has improved incomes and access

to food. Recent pick-up in agricultural

productivity growth, supported by increased

public investment and renewed interest of

private investors in agriculture, has improved

food availability.

In addition, in some countries, remittances

from migrants are playing a role in reducing

poverty, leading to better diets and progress

in food security. They can also contribute to

boosting productive investments by

smallholder farmers.

The report underlines that economic growth is

key for progress in hunger reduction. But

growth may not lead to more and better jobs

and incomes for all, unless policies specifically

target the poor, especially those in rural

areas.

Click here for more information.

IFAD and FAO target small-scale

agricultural projects facing

challenges

The UN Food and Agriculture Organization

(FAO) and the International Fund for

Agricultural Development (IFAD) have

launched a new joint project to help

developing countries, particularly fragile

states, manage public investments in small-

scale agriculture more effectively.

The UN food agencies will co-finance the $2.6

million initiative focusing on countries where a

lack of strong national governance means

development projects can face serious

challenges in delivering results.

IFAD's Executive Board approved a $2 million

grant for the project in September 2013, while

FAO and participating countries will each

add another $300, 000 to the initiative.

Up to 15 projects in ten countries will be

targeted over a two-year period, with priority

given to projects that are already under way

but that are encountering difficulties.

FAO regularly works with its sister agency

through the FAO-IFAD Cooperative

Programme, which has seen over 300 joint

operations worth almost $9 billion between

1977 and 2012.

Click here for more information.

Egypt says biofuel use should be

evaluated amid food shortages

The use of grain and oilseed crops to make

biofuels should be “looked at in great depth,”

as countries face food shortages and high

prices, Egypt’s minister for agriculture and

land reclamation, Aymane Farid Abu Hadid

NNFCC Market Review, October 2013, Page 6 of 8

said through a translator during a webcast of

a United Nations’ Food & Agriculture

Organization meeting earlier this month.

Aymane Farid Abu Hadid continued:

“The problem of the increase of food prices

has been very difficult in Egypt….We have

large numbers of people suffering from

malnutrition, which is why those foodstuffs

should be used for food and not fuel.”

Egypt is historically the world’s largest wheat

importer. The minister warned that

government is providing its poorest consumers

with food ration cards. The country is working

to improve storage and production facilities

to reduce the amount of food lost after

harvest.

Click here for more information.

Waste

The World Market for Waste

Incineration Plants 2013/2014

Research and Markets has announced the

addition of the "Waste to Energy (Analyst

version) - The World Market for Waste

Incineration Plants 2013/2014" report.

The annually published study is the world's

largest data collection and market analysis

for thermal waste utilisation.

The report states that throughout the world,

there are almost 2,200 energy-from-waste

plants. They have a capacity of around 255

million tons of waste per year. By 2017, a

further 180 plants, with a capacity of around

52 million tons, is expected to be additionally

constructed.

The report further includes:

A detailed analysis of pros and cons,

technology and costs of waste

incineration, including all the important

political, economic, managerial and

technical trends.

A description of the current and future

market volumes by countries, up to and

including 2017.

A project list with new construction,

extension and renewal projects.

Click here for more information.

Multi-billion pound savings available

to the grocery sector

UK supply chain waste arisings, Source: WRAP

New innovative research launched by WRAP,

identifies how much food, drink and

packaging waste arises in the grocery retail

supply chain. It also looks at where in the

sector it arises, what the waste is, and how it is

managed.

The new data examines waste across the

supply chain and shows how waste is

managed, where food is being redistributed

to and where it is used as an ingredient in

animal feed. The report also assesses other

materials arising from the production of food.

WRAP estimates that there is 6.5 Mt of waste

arising in the grocery retail supply chain. From

this figure, 3.9 Mt arises from food and drink

manufacturers, and the majority of this is

food. Retailer’s main waste comes from

packaging which, in total, accounts for

around 1.2 Mt.

NNFCC Market Review, October 2013, Page 7 of 8

It is estimated that food and packaging

waste in this area has a value of £6.9 billion.

This represents some 7% of the value of food

and drink sales to households, money which

could be used to increase exports or

investment to help individual businesses and

the economy to grow. By focusing on the

opportunities for improving waste prevention,

businesses can add the savings benefit

straight to their bottom line.

Click here for more information.

Cool Planet, Acritaz to turn palm

waste into biofuel in Malaysia

Palm plantation waste, Source: EcoSeed

Biorefinery developer Cool Planet Energy

Systems and Acritaz Greentech will be

building commercial facilities in Malaysia to

transform palm plantation waste products –

empty husks, wood, and bark waste – into

biofuel and biochar.

Acritaz Greentech, a group of companies

that bring biomass processing and bio-

technology innovations to plantations, has

signed an agreement with Cool Planet to

explore the building of multiple commercial

biomass processing facilities using Cool Planet

technology in Malaysia.

Acritaz and Cool Planet will use biomass raw

materials that are abundant in Malaysia –

such as palm plantation waste – to create

renewable cellulosic fuels for the Asian

market. They will develop a plant design that

satisfies the specific needs of Malaysia with

the first such plant to begin construction in

2014.

Acritaz will work to commit $60 million for this

first facility before the end of 2013. They plan

to locate this facility in the Malaysian state of

Johor.

The two companies will then work to build

multiple such facilities across Malaysia, with

Acritaz purchasing proprietary equipment

and consumables from Cool Planet.

Click here for more information.

Events

Health, Safety & Environmental

Management in Anaerobic Digestion,

22 October in Wiltshire UK

www.ciwm.co.uk/web/FILES/Education/RWW

_HSAnaerobic_Oct_2013.pdf

Health, Safety and Environmental

Management in Anaerobic Digestion

provides real information and practical

advice for all those in, or embarking on

anaerobic digestion. Invaluable for all AD

developers, this conference will prove

unmissable for all those looking to run

efficient, safe and well managed plants.

Increasing Methane Yields Course -

Newark, 12 November in Newark, UK

www.nnfcc.co.uk/events/increasing-

methane-yields-course-4

Following the success of the inaugural

training course at the Innovation Centre,

Exeter, The National Skills Academy course

'Increasing Methane Yields' is now being

offered at a range of venues across the

country. It is designed to provide AD operator

staff essential knowledge of the science

behind AD.

NNFCC Market Review, October 2013, Page 8 of 8

Feedstock Prices

Arrows indicate rise (↑), unchanged (–) or fall (↓) from previous month.

ENDEX Wood

Pellets Futures

Wood Pellets Delivered

(5% VAT), UK

Ex-Farm Barley

Straw (D1000), UK

Ex-Farm Wheat

Straw (D1000), UK

Date €/tonne £/tonne £/tonne £/tonne

Oct 13 - 215.25-270.00 (– -↑) 40.00-55.00 (– - –) 35.00-50.00 (– - –)

Nov 13 126.35 (–) - - -

Dec 13 126.95 (–) - - -

Q4 13 128.39 (–) - - -

Q1 14 130.00 (–) - - -

Q2 14 130.00 (–) - - -

Q3 14 - - - - For details on European wood pellet futures prices see www.iceendex.com

For details on UK wood pellet spot prices contact enquiries@nnfcc.co.uk

For details on straw spot prices see www.fwi.co.uk

LIFFE

Wheat

MATIF

Wheat

MATIF

Rape-seed

CBOT

Wheat

CBOT

Maize

CBOT

Soybean

Date £/tonne €/tonne €/tonne cnts/bsh cnts/bsh cnts/bsh

Nov 13 160.00 (↑) 195.75 (↑) 367.25 (↓) - - 1292.00 (↓)

Dec 13 - - - 692.75 (↑) 446.00 (↓) -

Jan 14 161.00 (↑) 195.50 (↑) - - - 1292.25 (↓)

Feb 14 - - 368.50 (↓) - - -

Mar 14 162.75 (↑) 195.50 (↑) - 702.25 (↑) 458.25 (↓) 1277.25 (↓)

May 14 166.00 (↑) 196.00 (↑) 368.25 (↓) 707.75 (↑) 466.75 (↓) 1256.25 (↓)

Jul 14 166.15 (↑) - - 699.00 (↑) 473.50 (↓) 1250.75 (↓)

Aug 14 - - 364.00 (↓) - - 1239.00

Sep 14 - - - 703.50 (↑) 478.50 (↓) -

Nov 14 155.00 (↑) 191.50 (↑) 369.50 (↓) - - -

Dec 14 - - - 713.25 (↑) 486.50 (↓) - For details on futures prices see www.hgca.com

Other biomass feedstock prices are available upon request, simply contact enquiries@nnfcc.co.uk

Credits and Disclaimer NNFCC Market Review is edited by Dr Michael Goldsworthy for NNFCC members. Feedback is

welcome. The Review has been compiled in good faith and NNFCC does not accept responsibility

for any inaccuracies or the products or services shown.

NNFCC The Bioeconomy Consultants

NNFCC, Biocentre, Phone: +44 (0)1904 435182

York Science Park, Fax: +44 (0)1904 435345

Innovation Way, E: enquiries@nnfcc.co.uk

Heslington, York, Web: www.nnfcc.co.uk

YO10 5DG.