Jean-Francois Guillon Africa Renewables ltd Trends of the energy wood chip market in Europe AEBIOM conference Brussels May 2014 (under signature)
Afriren background • Established in May 2010 • Headquartered in Belgium • Offices/project in London, Ghana, Ivory Coast, Nigeria and Cameroon • Over 100 staff worldwide • Over 200,000 MT of biomass originated from West Africa over the past 30 months • Member of the UN Global Compact • FSC certified • www.afriren.com
Contents • Current demand • Projected consumption 2020 • Pricing
There are 2 sources driving the woodchips consumption in Europe : - The pulp & paper market . Now gradually weakening ... - The CHP markets .Now gradually growing … - In both cases theses industries have been traditionnaly sourcing their biomass fuel from local market or immediately crossborder markets. - The new rules of phythosanitary requirements and dysfunction of physical availability is now raising the issue of whether imported woodchips would compete with local biomass .
European woodchip demand 14.5 MMT /yr Sweden: 2mn Finland: t/yr 2mn t/yr Denmark: 1.75mn t/yr UK & Ireland: 500,000t/yr Poland : 2.75mn t/yr Benelux: 75 0,000 t/yr France: 4mn t/yr Italy: 2mn t/yr Turkey:
France Demand: 4 MMT Sourcing: 70 % is locally sourced with a local production capacity of 2.7 MMT/ yr Production ~85pc capacityl Imports :1.3 M MT /Yr imports from Spain Portugal
Poland Demand: 2.75 M MT Sourcing: local • Projection: Imports expected to surge + 20% from 2017
Denmark Demand : 1.75 MMT / yr Local sourcing : 1.33 M MT /Yr Imports : 420,000 MMT /YR – Russia/Baltics – AFRICA – Germany – Sweden – France Previsions : imports to double by 2017, + 840’000 Mt / yr
The Russian parameter + 1 MMt /yr of in 2013 300,000t 500,000t 120,000t * Source: Bioenergy International Russia
Small scale CHP plants in Europe – European CHP order book very healthy – - Increasing demand from small towns to secure own production of heat and power based from sustainable sources - Woodchip storage does not require investment : open air coning - Woodchip carbon foot print is lower than pellet
Development of large-scale power and CHP plants Location Capacity (MW) Est. Commissioning Demand (MT/yr) Limousin, France 25 2015 150,000 Provence, France 150 2015 500,000 Utrecht, Netherlands 50 2016 300,000 Vartan, Sweden 300 2016 1,000,000 Ghent, Belgium 300 2017 1,000,000 Skaerbaek, Denmark 400 2017 500,000 Italy (multiple plants) 100 2017 400,000 Teeside, UK 300 2018 800,000 Ireland (multiple plants) 200 2018 700,000 Southampton, UK 150 2018 500,000 Helsinki, Finland (unconfirmed) 50 2020 275,000
Projected demand for 2020 + 28 M MMT /yr Sweden: 3mn Finland: t/yr 3.7mn t/yr Denmark: 2.55mn t/yr UK & Ireland: 3mn t/yr Poland : 3.75mn t/yr Benelux: 2mn t/yr France: 7mn t/yr Italy: 3mn t/yr Turkey:
Pricing Snapshot 2013-14 Wood chip prices, imports vs local 8 7,5 7 6,5 6 Argus wood chips, cif NWE € /GJ 5,5 FOEX forest biomass Finland, delivered to plant 5 4,5 4 3,5 3 Apr '13 Jul '13 Oct '13 Jan '14 Apr '14
Historical Prices Local wood chip prices, Finland 24 22 20 € /MWh 18 Finland Statistics, forest biomass, delivered to plant FOEX forest biomass 16 Finland, delivered to plant 14 12 10 Jan '07 Jul'07 Jan '08 Jul'08 Jan '09 Jul'09 Jan '10 Jul'10 Jan '11 Jul'11 Jan '12 Jul'12 Jan '13 Jul'13 Jan '14
Pricing • Market immature based on local sourcing – Little datas on reporting and figure collection yet – Shortage of local physical biomass pushing CHP to review supply strategy – Expected demand to be covered by imports if CHP plant is located max 200 Km from port – Import prices CIF Rouen , CIF Crotone , CIF Aarhus is competing with locally produced biomass fuel = 5 Euro /GJ
The African Opportunity *Source – The Economist • Abundance of natural resources in Africa • United Nations Food and Agriculture Organisation study – 71bn t, out of the planet’s 422bn t of biomass can be found in Africa, with only South America housing a greater amount.
No phytosanitary restrictions from Africa Phytosanitary import restrictions for wood chips into the EU Trade allowed inside the EU (Portugal has specific exports restrictions) Phytosanitary certificate, debarking or heat treatment required Heat treatment or fumigation required for import to EU (country specific) Import is allowed into EU
African projects drive an important Circle of Socio-Economic Benefits Local community National level Plantation Manager • Brings hard currency into • Additional jobs • Biomass income is an • Support small-scale the country incentive for replanting • New economic activity charcoal and timber • Biomass logistic chain • Technology transfer trade of extraction prepares • Lead the green revolution • Primary forest the ground for • Reduce dependence on threat is alleviated replanting fossil fuels
Africa Renewables Ltd • Stability of supply • Competitive pricing • Supply from Ghana & Cameroon • No restricted species for EU phyto requirements • Sustainable – FSC control wood
Contact J.F .Guillon Managing Director Tel: +44 (0) 203 402 5246 Mob: +44 (0) 7768 078199 jfg@afriren.com Louisa Blair Marketing Manager Tel: +44 (0) 207 228 4010 Mob: +44( 0) 7554 398 664 ljb@afriren.com Mohammed Safdar Shipping & Operations Tel: +44 (0) 203 402 2232 Mob: +44 (0) 7590 976247 mos@afriren.com
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