Pellet Supply Costs Along Three Case Studies

Ehrig, Rita; Behrendt, Frank; Wörgetter, Manfred; Strasser, Christoph

doi:10.1007/978-3-319-07016-2_3

Cited by 1 publication

(2 citation statements)

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“…Other work that could be used to compare the benefits of building a pellet mill among different countries are limited in scope. Nunes et al (2014a) focus on Portugal, Germany, and Sweden, whereas Ehrig et al (2014) look at Canada, Australia, and Russia. The objective of each is to provide market analyses and cost comparisons; however, they do not consider country risk beyond the cost of capital (a single rate is applied uniformly to each country in both papers).…”

Section: Discussionmentioning

confidence: 99%

“…Nunes et al (2014a) evaluate the production potential of Portugal, Germany and Sweden and find only Portugal to be economically competitive in the global market due to lower resource and labor costs. Ehrig et al (2014) estimate the cost of producing in and shipping wood pellets from Canada, Australia, and Russia. Their results suggest that Australia is not competitive due to high supply costs and Canada is risky due to extremely low profit margins.…”

Section: Introductionmentioning

confidence: 99%

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Locational determinants for wood pellet plants: A review and case study of North and South America

Singh

Cubbage

Gonzalez

et al. 2016

BioRes

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The European Union’s Renewable Energy Directive has led many electricity producers in Europe to use wood pellets in place of fossil fuels. North America has become one of the primary suppliers of wood pellets to Europe. This paper critically examines literature, economic models and data, as well as the supply chain and country risk factors, related to wood pellet production to anticipate where North and South American pellet mills should be built to meet Europe’s demand. Canada, the United States, and Brazil maintain the largest natural forest area, planted forest area, and industrial roundwood production; however, South American countries achieve faster plantation growth rates. The World Bank’s Logistic Procurement Index and IHS’s Country Risk Index were used to score and rank countries’ investment climates, based on their supply chain and risk factors. In this regard, the United States, Canada, and Chile performed best, in contrast to Venezuela, Bolivia, and Ecuador. When considering both wood supply and investment climates, the United States, Canada, and Chile were the most attractive countries to build a pellet mill, while countries, such as Argentina, Brazil, Colombia, Paraguay, and Peru present significant trade-offs between having significant wood resources and riskier investment climates.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%