S.C. wood pellet industry branching out

By Chuck Crumbo
ccrumbo@scbiznews.com
Published Dec. 26, 2012

COLUMBIA, S.C. — The wood pellet industry in South Carolina is picking up steam with one plant ramping up production and another about to be built.

When both facilities are operating, South Carolina will have the capacity to produce about 700,000 tons of pellets annually.

Still, South Carolina is “a relatively small player in the export market,” said Hakan Ekstrom, of Wood Resources International, headquartered in Bothell, Wash.

There’s potential for growth in the manufacturing of wood pellets as some countries in Europe are searching for ways to trim carbon emissions in fueling base-load power generation.

Also, countries like Germany plan to shut down commercial reactor units in the wake of safety issues raised by the nuclear accidents at Fukushima, Japan.

To meet the rising demand, wood pellet manufacturing has expanded in the South, helping make the United States the largest exporter in the world.

With continued investments throughout the Southern United States, export volumes are forecast to reach 5.7 million tons in 2015, up from 1.5 tons expected to be produced this year, according to the North American Wood Fiber Review, a publication of Wood Resources International.

It’s estimated that pellet production will at least double over the next four to five years, and some forecasts project 25% to 30% in annual growth globally over the next decade.

Wood pellet exports in the South rose 13% in the second quarter of 2012 over the amount reported for the first quarter despite temporary slowdowns at facilities in Florida and Georgia, because of fires at a U.S. port and at a pellet consumer in the United Kingdom, the publication said.

Lowcountry Biomass has invested $16 million into expanding its existing wood pellet plant in the Jasper County community of Ridgeland.

The expanded facility, which will have the capacity to produce 200,000 tons of pellets annually, will begin around-the-clock operations in the first quarter of 2013.

Meanwhile, Atlanta-based Enova Energy Group plans to build a network of three pellet plants in Georgia and South Carolina. The first project will be constructed in the Edgefield County town of Trenton, off S.C. Highway 121. Work will begin sometime during the first quarter of 2013.

The Enova plant will produce wood pellets to be used as a renewable fuel for export to the European Union under long-term contracts with public and private utilities.

Each of Enova’s new facilities annually will produce 500,000 tons of wood pellets by 2014.

The pellets from the Edgefield plant will move by rail to the Port of Savannah and shipped overseas.

The major source of feedstock for pellets is saw mill residue. The wood fiber material is dried and then pressed through a die, producing pellets 6 to 8 millimeters long or about the length of the first digit of a human finger.

According to the U.S. Department of Agriculture, S.C. mills in 2011 produced 9 million tons of wood residues that was either burned as waste or dumped in landfills.

In South Carolina, where forestry is the state’s No. 1 manufacturing industry, providing more than 90,000 jobs, logging residue is the single largest source of under-utilized biomass, said Tim Adams of the S.C. Forestry Commission.

However, the material “is generally not suitable for pellets because of the amount of dirt mixed in with it,” Adams said. “Logging residues are better suited for use in biomass-fired boilers where the fuel doesn't have to be pelletized.”

Pellet manufacturers generally prefer pulpwood like that used by the pulp and paper industry or by oriented strand board manufacturers, Adams said. Pulpwood can be chipped into a cleaner form of biomass, he said.

With about two-thirds of South Carolina, 13.1 million acres, covered by forest, it would appear that the state has plenty of resources available for wood pellets.

“We actually have more wood here in South Carolina than we’ve ever recorded, and our records go back to the 1920s,” Adams said. “However, our wood supply is not evenly distributed across the state or by age.”

Wood suitable for making fuel pellets is in the forests of the Piedmont, Adams said. But pellet manufacturers prefer to have their plant and operations close to a major seaport to hold down transportation costs.

One of the commission’s roles is to help prospective biomass companies make better decisions on where to locate based on the resource, Adams said.

Finding the right supply of biomass in a location that can be moved economically to an available port facility is a real challenge, Adams said.

Columbia Regional Business Report Editor James T. Hammond contributed to this story.

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