The report explains that Japan’s FIT incentive for biomass power has driven a rapid increase in demand for biomass, including domestic and imported pellets, along with imports of palm kernel shells. While the country has abundant biomass resources, they are uneconomic to harvest and transport. As a result, imports of wood pellets and palm kernel shells used for cofiring are expected to increase. The report also indicates Japan is considering the establishment of environmental sustainability standards for biomass products.
In 2015, Japan had 142 pellet plants that produced a combined 120,000 metric tons of wood pellets. Most of Japan’s pellet plants are small, with annual capacities of 100 to 1,000 metric tons per year. The report notes 2015 production was down 4.8 percent when compared to 2014 due to reduced heating demand. Next year, domestic wood pellet production is expected to reach record-high levels due to the expanded use of wood pellets in cogeneration systems.
Wood pellet imports reached 347,000 metric tons last year, up 49 percent when compared to 2015. Of that volume, 261,000 metric tons, or 75 percent, were imported from Canada, with 18 percent imported from Vietnam and 6 percent from China.
Imports of palm kernel shells reached 761,410 metric tons last year, up 67 percent from 2015. Indonesia and Malaysia are the country’s primary suppliers.