North American wood pellet capacity increased 12% in 2021. This trend is led by export-oriented projects in the U.S. South, which continue to drive sector growth.
Wood pellet production capacity reached 20 million metric tons in North America in 2021. Growth is expected to continue through 2022, with capacity forecast to reach 23 million metric tons. Much of the wood pellet capacity growth is focused on the U.S. South, within economic freight distance to export ports. As the export wood pellet market matured, two main types of projects developed. The first are large projects (400,000+ metric ton/year) complete with a woodyard, dryer(s) and a dozen or more pellet mills, like the large Drax and Enviva operations. The second are the “pellet box” mills, which are co-located or near several large sawmills, consuming only dry material as feedstock. Forisk’s research identifies at least eight projects that are operational or are being developed in this fashion, including proposed Rex Brookhaven and CM Biomass in Alabama. The “pellet box” mills do not have a woodyard or dryers and usually have only one or two pellet mills.
North American Pellet Mills. Source: Forisk North American Forest Industry Capacity Database. Units: thousand U.S. short tons
In recent developments, Enviva Lucedale, Mississippi began commissioning while CM Biomass also purchased the Jasper, Tennessee, Crossville, Alabama, and Quitman pellet plants from Mohegan Renewable Energy. Enviva plans to begin operating the Epes, Alabama facility in 2023.
Canadian wood pellet capacity projects to increase 13% in 2022. Peak Renewable Energy announced a 600 thousand metric ton facility in Fort Nelson, BC. The company purchased Canfor’s Fort Nelson mill assets and forest tenure in the region. The increase of capacity is partially offset by the closure of Pacific Bioenergy’s facility in Prince George, BC in early 2022.
Stephen Wright, Forisk Analyst and Associate Editor of the Forisk Wood Fiber Review, contributed to the research in this blog post.
The Forisk Research Quarterly publishes analysis of the wood pellet sector in North America and capital investment trends. To produce custom reports and maps, check out Forisk’s North American Forest Industry Capacity Database. Discounted rates available for companies that also subscribe to the Forisk Research Quarterly (FRQ). The Forisk Market Bulletin (FMB) provides market intelligence and tracking for U.S. and Canadian forest industry capital investments and timberland transactions. Email bmendell@forisk.com or call 770.725.8447 for pricing information and to place an order.