Argus Media: Denmark to launch wood chip trading exchange

Denmark to launch wood chip trading exchange
London, 12 January (Argus) — Trading is scheduled to begin on 2 February on Biomasspool, an online trading platform for wood chips in Denmark aimed at increasing transparency and sustainability standards.

The platform expects to launch with four suppliers and five buyers signed up to trade, Biomasspool director Kenneth Lykkedal said today. Up to 100,000t of wood chips are expected to trade on the platform during 2018.

Danish wood chip demand will overtake wood pellets by the end of this year if all the planned projects come on line on schedule.

Danish utility Orsted intends to use Biomasspool in the future. Orsted operates two wood chip-fuelled plants in Denmark, which have a combined capacity of 480MW and consume around 750,000 t/yr. The company is also building the 150MW Asnaes CHP which will add 240,000 t/yr of chips by 2019, and is considering the 371MW Esbjerg CHP project which would consume a further 525,000 t/yr by 2022.

Trading on Biomasspool will be conducted anonymously and deals will be concluded on a cif basis.

The exchange aims to create a more “transparent and well functioning market”, and assist market participants in meeting Denmark’s voluntary sustainability requirements for biomass fuel used to generate energy, Lykkedal said.

Wood chip traded on the exchange must meet the voluntary sustainability requirements launched by the Danish government last year. These apply to fuel used by biomass-fired CHP plants with a thermal output of at least 20MW.

As of this month, 75pc of woody biomass must meet the requirements, rising to 100pc in 2019, of which 90pc must have sustainability and legal documentation, while the remaining 10pc only requires legal documentation. The requirements can be fulfilled by using sustainable biomass partnership certification.

Biomasspool, which is owned by private investors, will be operated by Lithuania’s state-owned Baltpool biomass platform, which hosts trading of wood chips and pellets.

Regulated energy companies in Lithuania are legally required to buy solid biomass supply through Baltpool, unless they are able to find cheaper supply outside of the exchange.
Source/kilde: Argus Media

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