International biomass trading platform to tap soaring pellet demand

With the European biomass energy market continuing to go from strength to strength, an innovative UK start-up has sought to exploit the growing demand for biomass pellets with the launch of a new international trading service designed to bring together fuel suppliers and power plants.

The service was debuted last week by Norfolk-based Pellet Zone Ltd (PZL) and will see the company act as the principal in any trades, generating a small margin by purchasing biomass pellets from producers and selling them on to power plants.

Speaking to BusinessGreen.com, Steve Garner, head of the new trading service, said there was considerable pent-up demand for a trading platform that would make it easier for biomass power plants to secure fuel supplies.

"The supply offered in the first week was about 600,000 tonnes and we saw demand of about 300,000 tonnes," he said. "That is not necessarily indicative of the overall level of supply and demand, but does underline the interest in the model."

He added that the trading platform would allow purchasers of biomass pellets to secure more consistent and reliable supplies, while allowing producers to access a wider market and easily offload any unsold stock.

As a spinout from agri-chemicals trading specialist Albaugh, PZL has experience in international agricultural commodities trading, and Garner is expecting demand to climb rapidly as new European biomass plants come online.

"[UK energy firm] Drax has three biomass systems in the pipeline that will each use 1.5m tonnes of pellets a year," he said. "Those projects alone will double the current level of biomass demand in Europe."

The company has also moved to reassure both customers and environmental groups that the pellets it trades are from sustainable sources, appointing third-party verification specialist SGS to certify that the pellets it purchases meet sustainability criteria and do not result in "a net release of carbon from vegetation and soil".