For more than a decade, John Keppler, Enviva's co-founder, chairman and chief executive officer, has been managing the company's strategic direction and has led the company from its entrepreneurial stage to becoming the world's largest producer of industrial wood pellets.
Enviva has operations in Mississippi, Alabama, North Carolina, Virginia and Florida with facilities that include nearly 3 million tonnes of capacity and 600,000 tonnes of under-construction facilities. Sapick and Wilmington, North Carolina, as well as deepwater shipping terminals in Panama City, Florida and Mobile, Alabama, export to EU customers.
In January, Enviva announced a joint venture with a subsidiary of John Hancock Life Insurance Company called Enviva Joint Venture, which will jointly acquire, develop and construct the Wood Pellets Plant and Sham Shuihans Ferry Terminal in the South East. The joint venture has announced , Intends to acquire a wood pellet plant in Greenwood, South Carolina.
In an interview with Pellet Mill, Keppler answers the challenges facing the European wood pellet market and the future opportunities for Enviva, not only in Europe but also in Asia.
- What is the percentage of Enviva's wood pellets exported to the European market? How can you gain a firm foothold there? Have you successfully entered the European market with a learning curve?
Today, our customers are mainly producers of electricity and cogeneration in Europe who want to reduce their reliance on traditional fossil fuels such as coal and reduce their emissions of carbon dioxide and other pollutants, and European countries have adopted a positive and mandatory renewable Energy Targets Some countries, including the United Kingdom, have set out clear rules that aim to eliminate most coal-fired power plants and because existing coal-fired infrastructure can be converted to wood biomass, Enviva provides a reliable , Both in terms of cost and environmental benefits, I would say that although our competitive output has been delivered to Europe, the Asian market has grown very rapidly and we have plans to ship to Japanese customers this year.
We entered the field of industrial wood pellets in 2007 and we have entered into a long-lasting relationship with a reliable customer who, from the beginning, complemented the heating customers. However, the European Renewable Energy Regulations 2009 for Heating Conversion for Utilities Provided more substantial opportunities and we were asked by our customers to create bigger businesses that could provide a reliable supply at a predictable cost. Soon after, we acquired our first particle plant in Amory, Mississippi (2010 ) And established our first pellet plant in Ahoskie, North Carolina (2011). Currently, we have total capacity of nearly 3 million tonnes / year (MTPY) and another 600,000 tonnes / year under construction plant A factory that has announced it but has not yet completed the acquisition will add another 600,000 tonnes to our capacity.
Admittedly, there is a learning curve for successfully entering the European market, which is not just a matter of successful production of wood pellets, we have to master the entire supply chain. In particular, I came up with two key decisions: the first was the vertical integration of our own deep-water terminal at Chesapeake Harbor, which allowed us to control the supply chain.
The second is from a pure third-party certification focusing on sustainable development and sustainable forestry practices, an integrated approach from innovation to certification, protection and openness. In doing so, we developed and introduced a proprietary data system, Track & Trace Is the first such system in the industry that keeps track of our forestry and supply chain activities and allows us to track every ton of timber we buy from forests or sawmills.We publish Track & Trace data on the corporate website to Make sure it is public and can be used by all stakeholders.
These are just a few of the key elements of the early days that ensured we were able to serve the market quickly and effectively and to establish a unique leadership position in the industry.
- When did Enviva ship the first wood pellets to Europe? Could you describe the experience?
We shipped for the first time in November 2010 (10,000-tonnage vessel) and this is an exciting and significant accomplishment that is almost as loaded with our own deep-sea shipping terminal in Chesapeake Harbor in December of the following year (2011) Our first boat matched.
The facility was originally an alumina import terminal and we bought it in February 2011. Our goal is to be able to load a vessel in the same year.The ship Daishin Maru delivered 30,000 tons of wood pellets to Europe Demonstrating Enviva's superior capabilities: In just 10 months we built 45,000 tons of state-of-the-art storage capacity and transformed a stocking terminal into an export terminal that can deliver high-quality wood pellets quickly, At the designated time to the customer's port.
- How do you see the development of the European wood pellet market in the next five or ten years? Demand is expected to remain stable - Is Enviva looking at other markets? Has the Greenwood plant been acquired recently and plans to build more factories and deepwater facilities to match Future plans?
We see significant potential for industrial particle growth in Europe, both short-term and long-term. CHP and industrial heat in the Dutch market are on the rise, and we see Denmark, the United Kingdom and Belgium continuing to pursue new biomass cogeneration projects. , Poland and Ireland also represent opportunities for large plant-level applications, and we expect the combined thermal and residential heat markets to grow across Europe.
In the 1920s we saw further growth from the European Union's Renewable Energy Directive II, which aims to focus on efficient and scalable assets for the wind and solar power of countries, regions or cities Important System Services We believe that US wood pellet exports will continue to play a key role in achieving Europe's energy and climate goals while ensuring future grid reliability (as outlined by the European Parliament on January 17 regarding the RED II Biomass Energy Quota terms).
We also expect strong growth in the Japanese market as the demand for imported wood pellets will continue to grow as several utilities and trading houses announce new shared and dedicated biomass projects, with Japan's target of biomass generation reaching 6 to 7.5 GW, which means that demand will reach 15-20 million tons of biomass fuel per annum, which is a projected part of electricity supply in 2030. In 2017, due to the application for submission of biomass power generation capacity exceeding 15GW, The amount of biomass fuel far exceeded expectations.
This new joint venture, which we recently announced, will fully comply with our strategy of developing and constructing new plants and shipping terminals and will in the future increase our production capacity to better serve the growing markets of Asia and Europe.
- Are there any policy issues of particular interest to Enviva - such as the definition of a uniform sustainability for EU countries?
We pride ourselves on producing world-class pellets, which means we are committed to providing our customers with the highest quality products while ensuring the healthier forests we buy. Enviva Foresters and employees throughout the enterprise spend a significant amount of time And energy to maintain our various certifications demonstrates the sustainability of our sourcing and pellet production.
Certification provides our clients with an independent confirmation that Enviva is doing the right thing and can be held accountable.
Currently, Enviva maintains three types of certification:
'Chain of Custody Certification' certifying Enviva's compliance with the highest industry standards for responsible timber procurement, including provisions for the conservation of biodiversity, contractual requirements for the use of best forest management practices, legal and regulatory compliance, and regulatory oversight and participation in the sustainability process .
'Forest Management Certification' where landowners manage their own land in accordance with generally accepted management principles As Enviva enters more countries and markets, we must increase our clients' access to certified timber.
'The Partnership for Sustainable Biomass Certification' is more targeted and sets sustainability standards for the production of wood pellets and chips for industrial, large-scale energy production.
- What do you think of Enviva's success in the wood pellet business? We have seen the rise and fall of many companies over the past decade.What strategy do you have to differentiate your company from others?
We do not define ourselves as a "wood grain business." We see ourselves as a key supply chain partner for key power generation companies looking to improve their energy production environment, which means that nothing we do can stop them from delivering energy to customers, Nor can they stop us from providing them with renewable resources as a fuel, which for entrepreneurs means tireless attention to safety, quality and reliability, as well as a culture of continuous improvement for each profession.
However, our values drive our business practices and we care about the safety and security of our people, hiring and nurturing the best people, integrity, determination, responsibility and the promotion of the health of our forests in the areas we operate in. These values are very good. We are able to build trust with all our stakeholders, from employees and suppliers, to local communities, to everyone who supports our supply chain, to our overseas clients and regulators.
The industry is maturing and we are helping to set standards for safety, sustainability, quality, efficiency and reliability.
- Can Enviva's Track & Trace program and its sustainability policies help your company sell its products in Europe? How does it work?
Absolutely helpful.Our clients rely on us to provide consistent and sustainable products and to contribute to the health of forest land.This starts with a thorough understanding of our supply chain and for this we have launched the Track & Trace program.
Track & Trace is a proprietary and innovative system that tracks every truck material sourced from the forest or sawmill, providing a detailed and easy understanding of the characteristics of the wood. We know the specifics of the forest, The location of the harvest site, the people who own the land, the type of forest, how they were harvested, the number of years since the last harvest, the number of acres harvested, and the total harvest per channel, which enabled us to make informed purchasing decisions, And share this information publicly.
Transparency is critical to building trust - we are constantly reviewing and improving our practices, and we are happy to work with our stakeholders to continue to improve and share information about our purchasing systems. Our Track & Trace data is what we are committed to transparency Pillars are also an important part of Enviva's responsible timber supply program.
- As a major player in the wood pellet industry, what can you say about the major challenges?
This is what we call the 'juvenile' industry. We have to pass many engineering challenges and may take a century to figure out what is the best solution. It takes a lot of perseverance to solve the problem. Culture is very proud that this allows us to continue to improve the productivity of each plant and to improve quality significantly while maintaining safety priorities.
Another challenge is to establish a reliable and scalable supply chain that connects landowners in the southeastern United States with customers around the world, covering all the normal logistical challenges of moving goods while minimizing energy Consumption, develop comprehensive education, certification and transparency programs to ensure that all wood we buy comes from sustainably managed forests.
The last thing I mentioned is an opportunity, not a challenge. With the development of the company and the industry, we can speak the story about us more strongly. We have the opportunity to publicize our profession The Sustainable Development of Biomass Energy in the Southeastern United States plays an increasingly important role in improving the energy production environment and providing economic benefits to communities.With regard to the carbon benefits of replacing coal with biomass and between deforestation and regeneration The positive correlation, I believe it would be a very convincing story.
Author: Patrick Miller from "pellet plant magazine"
pmiller@bbiinternational.com
