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Q: Wood Pellet Factory ( Answered 5 out of 5 stars,   3 Comments )
Subject: Wood Pellet Factory
Category: Business and Money > Consulting
Asked by: woodman123-ga
List Price: $100.00
Posted: 07 Apr 2006 06:58 PDT
Expires: 07 May 2006 06:58 PDT
Question ID: 716455
I want to get into the woodpellet business I am located in Canada in
the North of Ontario and want the information to be as relevant to my
demographics as possible, I want to know:
Wood pellet business logistics - STATISTICS, demand, supply,
manufactures, shelf life, etc.
Wood pellet mill experts - companies that focus in developing wood pellet mills
Wood pellet equipment and costs
Wood pellet transportation requirements
types of hard wood used for wood pellets
Cost logistics of developing a wood pellet facility

Request for Question Clarification by pafalafa-ga on 07 Apr 2006 07:18 PDT

You sound as if you're looking for a business plan, which generally
cost thousands of dollars, if not tens of thousands, to develop.

You may want to reconsider the scope of what you are asking for, given
the price you have set, and the parameters of the work generally
carried out here at Google Answers.

Just a suggestion...


P.S.  Here's a link where you can click through the steps in the
manufacturing process, in case that's of interest:

Clarification of Question by woodman123-ga on 07 Apr 2006 07:40 PDT
Sorry, not looking for a business plan, I have acquired most of the
answers to the questions I am asking by doing some simple searches,
but I have been impressed with the information some are capable of
finding at google answers.

The business plan and feasibility study will cost 10's of thousands,
but just so I know what the whole industry is about I wanted a

Request for Question Clarification by pafalafa-ga on 07 Apr 2006 07:42 PDT
Sorry if I misconstrued your intent...thanks for clarifying.


Clarification of Question by woodman123-ga on 07 Apr 2006 09:45 PDT
No problem
Subject: Re: Wood Pellet Factory
Answered By: belindalevez-ga on 16 Apr 2006 09:09 PDT
Rated:5 out of 5 stars
<Wood Pellet Factory


The capital costs of the plant depend on the type of material used.
Material with moisture content of greater than 12% will need drying. A
dryer can cost up to 40% of the entire capital costs.

In addition capital will be required to overcome the time it takes to
achieve profitability. Many pellet plants take 6 to 18 months to
refine the process before becoming profitable.

This report compares the costs of various sizes of plant.
1.5 tonne per hour  - $145,000 USD
4.5 tonne per hour - $275,000 USD
20 tonne per hour - $20 million

Capital costs of a three and ten tonne/hour pellet plant. $CDN
Dryer 700,00,    3,550,000 
Hammer Mill  120,000, 530,000
Pellet Machine 280,000, 890,000
Cooler 19,000, 360,000
Storage Conveyors, Separators 430,000, 1,290,000
Peripheral Equipment 740,000, 640,000
Buildings 810,000,  1,520,000
Total 3,100,000,  8,780,000.

This 94 page report looks at the entire landscape of the fuel pellet
industry in Canada.
Source: Strategic analysis of a pellet fuel opportunity in Northwest
British Columbia. By Ernie Urbanowski BSc, University of Saskatchewan.

Case study - AB Forssjo Bruk, pellet production plant in Austria.
Annual turnover ? Euro 5.5 million
Raw material consumption is approx 300,000 m3 sawdust per year.
Annual production capacity 45,000 tonnes of wood pellets.
The plant has two presses for wood pellet production. The capacity is
7 tonnes per hour.

Breakdown of pellet production costs.
Dry material.
Dry material 53%
Staff 20%
General investment 2%
Grinding 2%
Pelletizer 14%
Cooling system 1%
Storage 4%
Periphary 4%

Raw materials 34%
Drying 30%
Staff 13%
General investment 3%
Grinding 4%
Pelletizer 9%
Cooling system 0%
Storage 3%
Periphary 4%

Bulk distribution ? 38 metric tonnes/vehicle.
Bag distribution ? 42 pallets per vehicle.832Kg/pallet (1830lb)

Pellet prices:
Bulk delivery ? Euro 44 per MWh ? Euro 215/tonne
Sack delivery ? Euro 47 per MWh ? Euro 230/tonne
Over 50% of the production costs are related to the raw material cost.

This report also contains European market information.
Source: Sustainable energy Ireland.

Demand and supply

Pellet shipments data and pellet appliance shipment statistics can be found here.

Increased demand for wood pellets, triggered by rising oil prices, is
pushing up pellet prices on the east coast, according to a report by
the Montreal Gazette.

76,000 pellet-burning stoves were sold in Canada in the first nine
months of 2005, a 98% increase over the same period in 2004. Pellet
sales rose 96% in B.C. and 30% in Quebec and the Maritimes.
Buying and shipping pellets from the West Coast has added to higher
prices in the East.
The panic buying that depleted inventories should be corrected for
winter 2006-07 with a planned increase in capacity to manufacture the
Swaan foresees a price correction next year as well and warned
manufacturers and retailers against trying to profit too much from
increased demand.
This report looks at the world supply of wood pellets. It says that
there is increased demand in the UK. Production from Sweden is not
sufficient to meet domestic, UK, Danish and Dutch market for 2004
(700,000t) and 2005 (1.4MT). Source: The Northern Energy Initiative.
This report hightlights the shortage of raw materials in Sweden and
Denmark. Source: EUBIA.

Pellet Flame Inc.

Pinnacle Pellett Inc.

Princeton Co-Generation Corp.
Contact: Gary Johnston/ Dean Johnston
Telephone 250-295-6940, Fax 250-295-6943
Box 2440, Princeton, BC,
Canada V0X 1W0

Premium Pellet

B.C. Pellet Fuel Manufacturers Association
Box 2929, Prince George, B.C. Canada V2N 4T7

Produces 50,000 tons per year.

Dry Creek Products

Premium Pellet Ltd
Largest wood pellet producing plant in the world.

Armstrong Pellet Inc
Dansons Group Inc
Energex Pellet Fuel Inc
La Crete Sawmills Ltd
Lakewood Industries ? Pellet Division.
Langs Dehy Ltd
Marwood Ltd
Pacific BioEnergy Corp.
Pinnacle Pellet Inc
Princeton Co-Generation Corp.
Shaw Resources.
Source : Pellet Fuels Institute.
Industry standards
The pellet fuel industry has developed fuel standards that must be met
by all pellet mills. These industry standards assure as much
uniformity in the final product as is possible for naturally grown
materials that become processed, but not refined, fuel. The pellet
fuel industry, through the PFI, has determined that pellet mills have
the responsibility to test and certify their product. The Institute
recommends that manufacturers conduct both in-plant and independent
laboratory tests of their product on a regular basis.
PFI-graded fuel must meet tests for:
ˇ	Density: consistent hardness and energy content (minimum 40 pounds/cubic foot)
ˇ	Dimensions: length (1 ˝? maximum) and diameter (1/4? x 5 1/16?) to
assure predictable fuel amounts and to prevent jamming
ˇ	Fines: limited amount of sawdust from pellet breakdown to avoid dust
while loading and problems with pellet flow during operation (amount
of fines passing through 1/8? screen no more than .5 percent by
ˇ	Chlorides: limited salt content (no more than 300 parts per million)
to avoid stove and vent rusting
ˇ	Ash content: important factor in maintenance frequency 
This page gives contact details for testing laboratories.
Source: Pellet fuels institute.

Shelf life depends on the composition. Some manufacturers add a
bonding agent to increase shelf life.

Austrian standard for wood pellets.
ˇ	Pellets have to be protected against wetness and pollution during
storage and transport, therefore storage only is allowed in closed
halls and manipulation areas have to be roofed. Manipulation areas and
storages have to be kept clean (especially free from soil, sand or
ˇ	Before delivery of pellets to the (private) final consumer fines
have to be separated up to a maximum content of 1 % fines
ˇ	Transport lorries (over 8000 kg payload) have to be equipped with an
adjusted on-board-weighing system
ˇ	Tank lorries must be equipped with an efficient suction technique
and dust bags to avoid high pressure in the storage room and dust
emissions during filling.
ˇ	Tank lorries must be equipped with pipes at least 30 m long. 
ˇ	Traders and transporters have to develop working instructions for
delivery of pellets and train their stuff according this instructions.
ˇ	Each filling of a storage room at the end-consumer has to be
documented by a check-list. The check list has to contain at least
information whether the heating has been stopped during filling,
whether the storage room is closed, if there are old pellets remaining
in the storage room, length of pipes needed for filling and other
special remarks concerning the storage room or the filling procedure.
Another Austrian standard for pellets storage at the end consumer
(Önorm M7137) has been stated in 2003. In Austria recently about 95 %
of pellets storages are specially equipped rooms in the cellar of the
building. This standard defines quality criteria for pellet storage
rooms or bunkers (under floor or above) at the final consumer to
ensure storage conditions at the end consumer´s home not effecting
pellet quality. Another purpose is to harmonize  storage equipment and
filling couplings of the storage with the equipment of pellet tank
cars and filling operations.
The main criteria of this standard  are: 
ˇ	The storage has to be protected against wetness 
ˇ	The storage has to be made tight against dust 
ˇ	The filling couplings of the storage have to be situated this way
that they can be reached by a 30m  long filling pipe.
ˇ	There must not be installations of electricity, water or waste water
in the storage room
ˇ	The storage needs a opening of at least 400 mm diameter 
ˇ	Regional fire protection regulations have to be fulfilled. 
ˇ	Filling couplings have to be made of metal and have to be earthed.
They have to be mounted properly (untwistable)
ˇ	The filling coupling has to be a Storz A/110 - 4 inch coupling 
ˇ	The suction coupling has to be a Storz A/110 - 4 inch coupling or
Storz F/150 - 6 inch coupling.
ˇ	Except during filling couplings have to be closed with special screw-tops. 
ˇ	Filling tubes should be as short as possible, changes in directions
should not be more than 45°, radius should be more than 500 mm
Source: Dr. Brigitte HAHN. UMBERA GmbH
Pelleting equipment

Buhler(Canada) Inc.
Provide modular equipment for wood pelleting.
Contact details:
Mr. Adrian Polman
905-940-6910 ext.227

Mr. Dominik Ladner
905-940-6910 ext. 267

Manufacturers and suppliers of pelleting plant and equipment.

Paladin pellet mills

Directory of manufacturers of pelletizing equipment and plant.
Source: ThomasNet


Residential scale automatic wood pellet fired boilers have become
popular in Europe and North America.
Fuel pellets can be produced from many biomass sources.
Wood pellet costs GBP/MWh 15-30 
Installation rates in the Uk and European market.
The capital cost of fuel producing equipment can be high requiring a
hammer or chipper mill and a drier.
Pellets can be supplied to the residential market at around GBP
25.40/MWh (GBP112/odt).
Source: AEA Technology.

Canada produces about 350,000 tonnes of pellet fuels per year.
Approximately 100,000 tonnes of pelletised wood residues are being
exported annually to Scandinavia from Canada, but the market within
Canada remains underdeveloped. Gasifier pellet stoves are being
produced and sold in Canada that are burning moderately high ash
pellets and grains at 80-85% suffieciency. Numerous attempts have been
made in both Canada and USA to develop a wood pellet market but have
met with limited success.
Heating with biomass is also being proposed for homes. A biomass-fed
furnace offered by a U.S. company can heat houses using fuels such as
corn, rye, pellet fuel or even cherry pits.
Source: Envirochem Services Inc.

Sea transport costs.
This article looks at the costs involved with exporting to Europe. 
Source: A case study of Sweden as an importer. Aruna et al.

Source of funding
The Softwood Industry Community Economic Adjustment Initiative was
designed to encourage long-term, sustainable economic development in
communities reviously dependent on the forestry industry. Many of
those most affected live in small, remote and Aboriginal communities
where there are few other economic options. The program, administered
in the West by WD, in partnership with Community Futures Development
Corporations, uses locally identified and driven initiatives to create
positive long term economic benefits. In all, the Softwood Initiative
has committed $50 million to implement 146 projects in more than 140
western communities. That funding has leveraged another $97 million
from other sources, creating or maintaining 2,500 jobs in communities
most affected by the Canada-United States softwood lumber trade
Source: Western Economic Diversification Canada.

Production process.

This report gives details of how wood pellets are produced.
Source: The Tree Station Project. 2001.

This report gives details of the production process
Source: European Biomass Industry Association.>

<Additional links:>

<Pellet Fuels Institute ? an industry association.>

<Wood Pellet Association of Canada.>

<Search strategy :>

<"wood pellet market" billion canada>

<"wood pellet production plant"  costs>

<canadian "demand for wood pellets">

<"wood pelleting equipment" canada>

<Hope this helps.>

Request for Answer Clarification by woodman123-ga on 18 Apr 2006 20:27 PDT
Thanks for the great research and I do mean GREAT!!! 

There is an important component that your search missed and it would
be great if you could do a little more digging about it.
The US government renewable energy bill "It will cover up to 25
percent, or $3000, of the cost of a solar thermal, solar photovoltaic
(PV), small wind turbine, geothermal (geoexchange), small hydro, or
biomass system with a high enough level of thermal exchange, like a
wood-pellet stove."

a little more on how this directly affects the market would be great,
after all this is the reason I am getting into the business!

Clarification of Answer by belindalevez-ga on 19 Apr 2006 00:11 PDT
<Government policies are having the effect of increasing the building
of biomass plants for generating electricity.

This article looks at the outlook for renewable energy in North
America. Table I shows state targets for renewable energy. Figure II
shows the predicted growth in biomass use to 2012. Biomass is
predicted to grow at a steady rate of approximately 2.7%.
Source: CEO Special Topic: The 10-year outlook for clean energy. David
Glovr. Malcolm Jacobson. Energy Pulse.

Texas last week signed into law an expanded Renewable Portfolio
Standard (RPS). Plans are to add 500 megawatts of biomass-generated
electric power. The new state law creates a market demand of
approximately 10 million tons annually. The news comes on the heals of
20 new biomass power plants planned to go on line in New England in
2006, requiring 10-20 million tons annually.
Source: Green Energy sources. August 8, 2005.

This report gives an overview of the US biomass market and biomass
plants in California and highlights opportunities in the industry. In
particular it states that certain biomass facilities have been idled
due to lack of fuel.
Source: Energy from Agriculture.

The Arizona Public Service Company, Inc. (APS) recently announced that
the $4-million Stone Forest Biomass Project, a plant located in Eagar,
AZ that "will consume approximately 96 tons of forested wood each day
and...produce three megawatts of electricity," is expected to be
completed in November. APS noted that the new plant, which will be
operated by Western Renewable Energy, will also help the company
"develop a template to build biomass plants that use similar
technology in other parts of the state," such as Flagstaff, Payson and
Prescott. Source: EIN Renewable Energy Today, 8/26/2003.'03.htm

Officials who hope to build a biomass-fueled power plant south of
Estancia  The plant will pay $3.5 to $6 million a year for biomass
material over the 30 to 40 year life of the plant.
Source: Wilson?s help is sought for biomass plant. John Brennan.
Mountain View Telegraph.

ONEONTA - A proposal by Catalyst Renewables Corp. to construct a $70
million biomass plant in the city would create about 170 direct and
ancillary jobs, and generate a market for low-grade wood. The biomass
plant would use 400,000 tons of low-grade wood a year to produce

Source: Firm put energy behind biomass plant. By My-Ly Nguyen. Press &

This article looks at the Senate enery bill. 
Amdt 919: National Security and Bioenergy Investment Act - Introduced
by Sens. Harkin, Obama, Lugar, and Coleman

- Creates Assistant Secretary of Agriculture for Energy and Biobased Products. 
- Amends Biomass R&D Initiative of 2000 (P.L. 106-224)- subject to
appropriations- increases yearly funding from $14 million to $200
million from FY06-FY2010 (total of $1 billion)
Sec. 222 Biomass Commercialization Grant Program (President's Healthy
Forests Initiative) $20 per green ton of biomass delivered from areas
of highest risk. $25 million/yr authorized to Sec. of Interior and
Sec. of Agriculture
Sec. 223 Improved Biomass Utilization Program- to provide grants to
offset the costs of developing or researching proposals to improve the
use of biomass or add value to biomass utilization. Max. grant
$500,000. $25 mill/yr. authorized to Sec. of Interior and Sec. of

Source: Senate Energy Bill Biomass Provisions. 29 June 2005.

Initiatives in the European Union are also increasing the market for biomass fuel.
The global market for renewable energy technology is expected to soar
by 70% over the next three years," according to McIlvaine. "The market
is currently worth $27 billion and expected to reach $46 billion in
2008." According to the UK's Environmental Finance Magazine December
issue, biomass power plants lead all other renewable energy sectors by
a margin of more than 2 to 1, for plants scheduled to go on line
between 2006 and 2012 -- an estimated 80 new biomass power plants. the
European Commission adopted an action plan last month to step up the
use of biomass energy. The plan outlines measures in three sectors:
heating, electricity and transportation, and announced more than 20
actions to be implemented from 2006 onward.
The Commission estimates that the measures in the plan will increase
the use of biomass to about 150 Mtoe (Million Tons of Oil Equivalent)
by 2010 (compared with 69 Mtoe in 2003).
Source: European Union Takes Action to Accelerate Biomass Energy in 2006.

800 new biomass plants were installed in Germany in 2005. Source:
Deutshland magazine.>

<Hope this helps.>
woodman123-ga rated this answer:5 out of 5 stars

Subject: Re: Wood Pellet Factory
From: daniel2d-ga on 09 Apr 2006 22:39 PDT
What are pellets made of?  By-products of wood manufacturing - saw dust etc.
You need a supply of this to make pellets.  That's why pellet
factories are co-located next to saw mills.
Subject: Re: Wood Pellet Factory
From: woodman123-ga on 10 Apr 2006 06:46 PDT
not necesaraly, depending on the size of pellet mill you are developing.
Subject: Re: Wood Pellet Factory
From: logistististisian-ga on 15 May 2006 10:43 PDT
I work with a BC company and we're currently finalizing our
pelletizing business plan.

For equipment the company to see is ESA Process Equipment out of
Vancouver,WA 360-576-2824).  They've designed and supplied most of the
process equipment for all the major BC pellet mills.  We found them to
be a very usefull source of info for our business case.

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