BIOMASS FOREST MANAGEMENT: 
TALLOIL CASE STUDY
by Brian Menzies

Biomass energy products, such as wood pellets, are becoming a global commodity. The pellets are considered an excellent substitute for fossil fuels such as coal, and will become a problem solver for the mountain pine beetle (MPB) disaster in BC’s forests.

Wood pellets - a form of biomass derived from wood fibre - are touted for both their sustainable and environmental characteristics. The pellets can be burned in residential wood stoves or in large, industrial, thermal power plants. The biggest advantage over fossil fuels is that the pellets reduce greenhouse gases by 30%, meeting the European Union emission targets. 

While biomass energy has great environmental benefits, it also provides an opportunity for better forest management. TallOil Canada is making a large investment in BC to produce wood pellets and help rehabilitate the MPB- damaged forests, help reduce the threat of forest fires and better utilize wood waste while developing a new environmentally-friendly and sustainable energy product derived from our forests.
Four years ago, Henrik Lundberg, a Swedish bioenergy expert and founder of TallOil, and BC-based forestry engineer Clay Anderson joined to develop a proposal to make industrial wood pellets from round logs. Most people they talked to did not believe this was economically feasible in BC. Although wood pelletization already exists here, these operations mostly manufacture wood pellets from sawmilling waste for the domestic market. Four years later, energy prices have risen and the MPB epidemic has grown exponentially, generating a much stronger interest within BC to explore biomass opportunities. 

Last year, TallOil Canada Inc. won four timber licenses. The total volume awarded was just over one million cubic metres per year. TallOil intends to develop four pellet plants that convert round wood into pellets. Its investment will be over $160 million and it will be employing over 600 people throughout the interior region, which has been heavily damaged by the MPB epidemic. TallOil will manufacture industrial-grade wood pellets for the European biomass energy market or develop biomass energy opportunities here in Canada.

TallOil is well suited to develop wood pelletization in BC since they have a long history of developing bioenergy products and combustion technology in Sweden, and later in Europe. It is a leading bioenergy company in Sweden, where 25% of the national energy needs are derived from bioenergy products. It develops products such as bio-diesel, ethanol, and solid biofuel products from agricultural and wood waste. It also provides logistical support including shipping and its own port for distributing its products. TallOil, through its subsidiaries, TPS Termiska Processer AB and VärmeTeknisk Service AB, specialize in combustion technology that enables the use of biofuels without major modifications or replacement of existing furnaces and boilers. TallOil is an innovative, vertically integrated company that is actively participating in the development of biofuels and renewable markets, and the resulting improvements to the environment.
The bioenergy market demand is very strong in Europe. Electricity production from solid biomass has increased markedly between 2004 and 2005 with a growth of 16% (an increase of 6.1 TWh [one thousand Giga Watt hours] from a total of 44.1 TWh). Europe’s strong demand for biofuels is currently driving producers to look to other continents, including North America, as a supply source.

Although there is a vibrant European market for biomass wood pellets, there is a good potential to develop BC’s bioenergy industry. TallOil is looking for energy opportunities here and they are working with the provincial government in developing the new bioenergy strategy, whether through electrical generation, co-generation opportunities or development of district heating. Until there is a market for bioenergy products in the province, TallOil will continue to develop its biomass products for distribution to the highly active European bioenergy market.

Biomass energy products help pulp mills and wood manufacturers to improve their production and wood products utilization. Most people believe the by-products such as sawdust or wood chips generated from wood manufacturing are the only means for manufacturing wood pellets. In TallOil’s case, it has a patent technology that will convert round logs to wood pellets. This means that TallOil will be able to extract logs from the wood supply chain that are either left behind during harvesting or sorted before the manufacturing process. When poor quality fibre is removed for biomass production early in the supply chain, pulp and sawmilling production moves more efficiently, with a higher percentage of desired log inputs. This is very important as most interior sawmills are having increased difficulties processing MPB-damaged fibre.

More importantly, sourcing fibre from round logs can help rehabilitate BC’s forests. The Crown forests have large areas that will not be harvested by the conventional harvesting industry. This is largely due to the decaying MPB-damaged stands that are not suited for pulp or wood manufacturing. There is also a large area within the inventory identified as problem forest types such as overstocked, over-mature, non-contributing forests. The government must undergo a costly program of forest removal and reforestation to convert damaged forests into productive forests contributing to the timber harvesting land base. The Crown’s costs to rehabilitate these forests are estimated at $5,000-$10,000 per hectare.
TallOil believes that the best solution to this looming Crown liability is to harvest as much round wood as environmentally possible for wood pellet manufacturing. With its current licenses, TallOil plans to treat up to 12,000 hectares per year that will contribute to the allowable annual cut and help to offset the future harvesting decline.

The large fuel loads after decades of fire suppression activity in the forests is now threatening rural communities. The conversion of round logs to wood pellets can help to reduce the risk of interface fires by removing low value fibre that is the primary contributor to fire hazard. Even after wildfires, damaged forests that are not salvageable for lumber production can be converted to wood pellets and efficiently rehabilitated. These opportunities will ensure TallOil is committed to pellet production and forest management in BC even beyond the current MPB epidemic.

TallOil Canada is currently seeking locations for its wood pellet plants. The company is also developing its harvesting plans. Along with their existing licences, TallOil is working with other forest companies and First Nations for opportunities to acquire more fibre. This will ensure that biomass wood pellets will not only provide rehabilitation opportunities for its own licenses but for others as well.

Biomass wood pellets are helpful for our environment not only as a renewable energy source, but also for helping to rehabilitate our forests.

Brian Menzies is Public Affairs Consultant for TallOil Canada Inc. at www.talloil.ca and President of Direct Public Strategies, Inc.