Fuel Pellet Sector Means Big Business for U.S. Alternative Fuels Industry

According to the U.S. Energy Information Administration (EIA), wood-based biomass such as fuel pellets accounted for only 0.8% of power generated in the U.S. in 2023. However, that number belies the big business of fuel pellet production in the U.S. Industrial Info is tracking more than $2 billion worth of active capital and maintenance projects involving fuel pellet production in the U.S. As most fuel pellets are intended for export abroad, heavily wooded areas and access to a means of shipping the pellets are desirable for siting plants.

One of the world's largest fuel-pellet producers, Enviva Incorporated (Bethesda, Maryland), is putting the finishing touches on what will be its largest production facility in Epes, Alabama. Construction kicked off in the summer of 2022, and upon completion, which is expected soon, the facility will be able to process a mix of softwood and mill residuals into 700,000 metric tons of pellets annually. Production eventually could be increased to more than 1 million tons per year. The Epes plant will ship pellets via barge on the Tombigbee River to a deepwater terminal in Pascagoula, Mississippi, for export to Europe and Asia. Subscribers to Industrial Info's Global Market Intelligence (GMI) Alternative Fuels Project Database can click here for more details.

Drax Group (Selby, England) is not only involved in fuel pellet production, but also biomass-fired power generation itself in a portfolio of renewable energy assets in England and Scotland, which includes the U.K.’s largest power station in Selby, North Yorkshire. Drax’s Selby plant generates about 5% of the U.K.’s power needs from fuel pellets. The group is targeting 8 million tons of production capacity by 2030, which entails adding 3 million tons of new fuel pellet production to its portfolio. Some of that increase will come from the U.S., where Drax is underway with a grassroot pellet plant in Washington and is planning an expansion at an Alabama plant.

Drax is underway with a grassroot pellet production plant in Longview, Washington, that will process wood waste feedstock into 450,000 metric tons per year of wood pellets. With the West Coast location, Drax is aiming for the Asian pellet market. Drax is in the late planning stage for the expansion of its plant in Aliceville, Alabama. The work includes adding new pelletizers and other upgrades that will lift the plant’s production from 250,000 metric tons per year to 380,000 metric tons per year. Work is expected to begin later this year and be completed in 2027. Subscribers can learn more by viewing the reports on the Washington and Alabama projects.

In February 2024, a wood pellet plant in Seymour, Missouri, owned by Fiber Energy Products (Mountain View, Arkansas) caught fire--an obvious disaster for a plant whose primary purpose is making fuel to incinerate. The facility was subsequently bought by Lignetics Incorporated (Louisville, Colorado), which toward the end of this year plans to begin rebuilding the 127,000-ton-per-year plant. The work is expected to last about a year, when the plant will begin ramping up to meet or exceed its former production. Subscribers can click here to learn more about the project.

At another idled plant, this one a former particleboard facility in Adel, Georgia, Spectrum Energy Georgia LLC (Adel) plans to this year begin work on what could become one of the largest fuel pellet plants in the world. Phase I will include equipment to process all forms of biomass, including sawmill residues, pulpwood, top wood and more, into 600,000 metric tons of pellets per year. The icing on the cake comes several months after Phase I’s completion, when an expansion project will start to more than double capacity to 1.32 million tons per year. The project’s final completion remains some ways off, in early 2028, and the project must weather citizens concerned about the amount the forest clearance the plant would require. Subscribers can learn more by viewing the reports on the Phase I and Phase II of construction.

In addition to several other capital projects in the sector, Industrial Info is tracking more than 100 planned maintenance events at U.S. wood pellet plants, including more than 45 remaining this year that are valued at a collective $26 million. Subscribers can learn more by viewing the related project reports.

Subscribers to Industrial Info’s GMI Database can click here to view reports for all of the projects discussed in this article and click here for the related plant profiles.