Thursday, November 24, 2011

Biomass Boom Could Provide Huge Boost To Amsterdam Freight Shipping Tonnages

New Legislation Promotes New Facilities
Shipping News Feature

NETHERLANDS / EUROPE - The port of Amsterdam is gearing-up for a boom in biomass volumes as a result of an increasing focus on renewable energy and new Dutch Government proposals which means that the port could see handling of biomass products rise from a current 1.5 million tonnes per annum to 6 million by 2020.

To meet the expected growth in this sector, the port will allow existing fossil fuel terminals to expand but will not allow the building of any new ones as it increases its focus on bio-energy as well as cooperating with the port of Duisburg to redevelop a transhipment terminal to enable the storage and transhipment of biomass to Duisburg for customers from Amsterdam.

Managing Director of the Commercial Department of Port of Amsterdam Koen Overtoom says the growth in European biomass demand is largely due to moves by Germany to phase out its nuclear power stations by 2022 and an increased focus by other European countries on energy sources that are less polluting than fossil fuels.

But the port also hopes to benefit from proposals recently unveiled in the Dutch Government’s Energy Report 2011, which include a requirement to make the use of some biomass mandatory at the country’s coal-fired energy plants and for the nation’s use of renewable energy to be increased from 4% in 2010 to 14% by 2020.

In anticipation of the new proposal being passed, some coal fired power stations in the south of the country are already blending in biomass. Overtoom says it is estimated that by 2020, the Netherlands, Germany, Scandinavia and the UK will require 15 million tonnes of biomass per year.

“As a result, the port of Amsterdam will acquire a significant market share in the north-west European market for biomass transhipment,” says Overtoom.

“The port of Amsterdam is strong in energy. Most of the cargo that moves through the port of Amsterdam consists of oil and coal,” he added.

Businesses based in the port area are already starting to invest in biomass fuel handling facilities and the Greenmills and Vesta Biofuels’ bio-diesel plants situated at the port are undergoing expansion. Other companies are also in the process of drawing up contracts to build new biomass handling facilities, but are waiting for the legislation to become final.

“We are confident that the demand for biomass will pick up speed within one or two years," says Marco Holleman, Director of MAJA Stuwadoors, a specialist in the transhipment of dry bulk cargo.

“We have one storage facility available and we will continue to invest as soon as there is more certainty about the import of biomass. The Government should provide clarity on this." Niels Boetje, Director of IGMA, a terminal for dry bulk cargo and subsidiary of food and agricultural producer Cargill, says it is in the process of negotiating with biomass manufacturers.

“The most advanced project is wood pellets from Georgia in the US,” Boetje says.

“The paper production industry in Georgia used to be thriving but now that less paper is being used, Georgia’s entire wood industry could be used for biomass as the ground is not suitable for crop production.”

Boetje expects IGMA to tranship about 200,000 tonnes of biomass by the end of 2012, in particular for destinations in the north of the Netherlands and Germany.

The recent decision by the German government to close all nuclear plants over the next few years makes the most powerful economy in Europe also the biggest potential user of biomass energy with consumption this year at 1.4 million tonnes – up from a mere 500,000 tonnes in 2006.

However Ludger Spohr, Manager of Business Development at VIS NOVA Trading, one of Germany's largest producers and traders of wood chips and wood pellets, points out future growth expectations go as high as 140 million tonnes.

“The European market for biomass will grow because of pressure to reduce CO2 emissions," says Spohr.

“But this depends on so many factors, such as oil price, whether or not nuclear energy is phased out and the extent of government subsidies for the use of biomass."

At present there are no plans by the German Government to follow the lead of the Netherlands and make the co-firing of biomass mandatory at coal-fired power stations.

However, Spohr says if it does, the potential for biomass would be huge: “[Germany] burn 250 million tonnes of coal per year in energy plants. A small percentage of mandatory co-firing would mean huge amounts of growth.

“But the German Government wants to be absolutely certain that co-firing is economically viable before making it mandatory.”

He added that: “The conditions in Amsterdam for the European import of biomass are excellent.

“Amsterdam is conveniently located. It is important that the price is attractive; a 50 cent per tonne saving makes a huge difference given the amounts involved.”

Overtoom concluded that: “Biomass volumes are clearly going to grow over the coming years as demand for alternatives to fossil fuel and nuclear power stations increases.

“We are confident that the port community in Amsterdam – and businesses in the wider Amsterdam area – will be amongst the key beneficiaries of this change thanks to our location close to the main consumption areas, our specialist handling abilities and future port developments.”