Before Building A Wood Pellet Plant

Questions To Ask Before Building A Wood Pellet Plant

Before you develop your own business plan for pellets manufacture, there are several questions you should try to figure out in top priority:

  • How is the development trend of the global pellets fuel market?
  • What is the pellet price in the target market?
  • What feedstock can I use? How much does it cost?
  • How much does it cost to start a pellet plant?
  • How does the financial feasibility for a pellet plant go?

By answering all the above questions, Eco Wood Pellet Ltd is helping you to find the most profitable way to start your pellet plant.

The Development Trend Of The Global Pellets Market

Typically, the global pellet fuel market for each country can be divided into two parts: the domestic market and the oversea market. Both of the markets include both residential customers and industrial customers. The residential customers use pellet fuel to heat their houses and workplaces, such as residences, schools, business buildings and etc. They have an annual demand for pellet fuel and will buy pellets before the heating season. Each residential customers may need pellets from half a ton to several hundred tons per year.

As the environment problem has been a serious concern of many governments, to use a multi-fuel combustion for industrial plant becomes a trend worldwide. We can take the Babcock & Wilcox Vølund A/S  CHP plants as an example,  they have a multi fuel capability and uses 300 thousand tons of wood pellets annually.

As the previously indicated, the wood pellet market will grow rapidly according to the growing heating and industrial demand. For example, in the Northwest Territories (NWT) in Canada, the government officials indicate that the fuel displacement of the government buildings and the new government buildings will prefer pellet boilers.

The Pellet Price

Let’s take EU as an example, which is the main pellet market and has the longest pellet utilization experience in the world. The pellet price in Europe is about €180 – €210 per metric ton (depending on the season). To be a pellet exporter, the warehousing and transportation costs must be considered. For a Non-Eu exporter, the warehouse costs may add € 10-15 per ton, and the transportation costs may add € 30-40 per ton.

The Feedstock

There are three sources for the wood feedstock: wood residues of wood manufacture process, harvested low-grade wood, wood wastes from residential wastes. As the wood processing industry is on the decline, the supply of sawdust may be less reliable, the harvested low-grade wood is becoming a stable feedstock for industrial pellet plant. But feedstock supplier is quite various in different country and regions. Take first consideration of your feedstock accessibility before you move forward.