International Bio Fuels Marketing (IBFM) has entered into contracts with French energy major Engie to build four wood pellet plants in Asia with construction starting this year.
The joint venture, which has established a Singapore-based company called Consolidated Biomass, plans to start construction of the first plant in Vietnam in about September. Work on a second plant is scheduled to begin in early 2022 with the construction of two more plants in Malaysia to start from late next year.
Each plant will cost about $12 million, take 12 months to build and be capable of producing 70,000 tons of wood pellets a year.
The majority of waste wood used as feedstock will be offcuts and branches from Forest Stewardship Council (FSC) approved plantation rubberwood, after the trunks of the tropical hardwood have been sold off for lumber and furniture manufacturing.
Wood pellets, pictured below, are used for co-firing with coal at power plants, helping utilities and major end-users meet their carbon targets.
Europe is the world’s largest wood pellet market, consuming about 29 million tonnes in 2018. However, Japan’s demand for the product is growing fast following the Fukushima nuclear plant accident in 2011, which sparked a major overhaul of the country’s energy policies.
IBFM managing director Neville Wills started the business from the kitchen table of his boat moored in the North Haven Marina about a decade ago.
The business moved ashore to an office at the marina in 2016 after director Andrew Ly joined the company.
After receiving FSC approval for its processes in 2016, IBFM developed two plants on a consultancy basis in Vietnam in 2017.
Engie has 170,000 employees worldwide, annual revenues of almost $100 billion and hundreds of power plants around the world.
The Consolidated Biomass wood pellet plants will involve an eight-step end-to-end process that begins with the arrival of the waste wood through to the delivery of the manufactured pellets to Engie at the port.
Wills said cheaper labour costs, availability of wood waste materials and the proximity to Japan made Vietnam and Malaysia ideal locations for wood pellet production.