Wood-Pellet Processing Plant Helps Curb Coal-Fire Emissions Abroad While Employing Locally

Pellet PowerA local wood-pellet processing plant helps curb coal-fire emissions abroad while employing locallyBy Jason Dehart

What goes around, comes around. And in humanity’s rush to find a better, more sustainable source of fuel for our hungry power plants, it appears we’ve gone back to basics: wood. These days, though, it’s called “biomass.”

The $100 million-plus Green Circle Bio Energy Inc. plant near Cottondale, run by the JE Group Company of Sweden, is now shipping out bite-sized wood “pellets” at the rate of about 600 tons a day. Completely uniform in shape, texture and moisture content, these little gems are being freighted overseas from Panama City to Holland and Belgium.

“The reason for our focus on the EU countries is related to the incentives that these countries have developed for the use of renewable energy in their power generation,” says Morten Neraas, Green Circle’s senior vice president of commercial/finance. “At the present time, these incentives make it possible for us to offer biomass as a viable alternative to coal and other fossil fuels.”

Neraas and Bill Waller, manager of wood procurement, say the pellets do their part in reducing the greenhouse-gas emissions of coal-fired power plants.

“When most countries of the world signed the Kyoto agreement, they pledged themselves to reduce the amount of fossil fuel they burn back to 1990 levels, and some of the countries of northern Europe had done much of their increase in energy since 1990 by coal-fired power plants, and adding new coal-fired power plants,” Waller says. “So those countries and power companies had a long way to go to get back to 1990 levels.”

But instead of walking away from investments worth hundreds of millions of dollars, these companies have sought out a cheap alternative fuel source.

“Their cheapest alternative is to ‘co-fire’ something that is non-fossil fuel with the coal,” Waller says. “And wood pellets are the cheapest alternative. So what our customers right now are doing is supplementing wood pellets with coal. And that reduces the number of tons of fossil fuels they’re burning.”

The Green Circle Bio Energy plant — the largest of its kind in the world, according to Waller — is located just a minute south of Interstate 10 on State Road 231. Apparently, this part of the southeastern United States is the best place to set up shop, Waller says.

“They looked all over the world, every continent, and the best location as far as wood fiber, logistics and business climate that they could find — in the whole world — was here in Cottondale,” he says.

The plant began production on April 4, one year after site preparations began. It employs more than 50 people, most of whom live nearby, and Waller says some 20 or so suppliers keep the inventory yard filled with pine tree logs and sawdust. According to the Jackson County Development Council, Green Circle will buy 1.5 million tons of lumber annually, generating some $30 million in revenue for regional timber industries.

The logs come from timber stands within 50 miles of the plant, mostly from small, non-industrial landowners, while the sawdust is trucked in not only from Florida but Alabama and Georgia as well.

“Probably 25 percent (of the logs) comes from landowners with over 10,000 acres, such as St. Joe Timberland,” Waller says. “We have received a few loads of wood from the Apalachicola National Forest. We are located in one of the most active forest plantation areas in the world. That means that most landowners will replant their stands after they have harvested the lots.”

Neraas says the company received a combination of local, state and federal grants to help it pick Jackson County as the plant site.

“Most of these were in the form of infrastructure investment,” he says. “There were incentives provided to us in order to attract the plant to this area, which we are very grateful for, and in today’s economic climate, more so than ever.”

All told, there was more than $116 million in direct government and private investment and economic incentives. The Florida Department of Community Affairs provided a $750,000 community development block grant, the WIRED Northwest Florida Initiative provided $300,000 for employee job training assistance and the U.S. Department of Commerce provided $1.14 million in grant money as well.

Local property tax collections are now expected to increase by more than $700,000 a year. But nobody is more thankful for the new jobs than Jackson County Chamber of Commerce President Art Kimbrough.

“I think there are a couple of factors that are important about Green Circle,” Kimbrough says. “The jobs it brings, and the spillover effect. The direct jobs are an extremely important element of our economy, and the second element is the ‘indirect’ direct jobs — the trucking industry, the tree harvesting industry, all of those support businesses that are required to cut, harvest and deliver the product to the plant for manufacture into pellets. That itself touches up to possibly 150 individuals. So the spin-off effect of their being here increases other jobs.”

However, while there are domestic coal-fired power plants that might benefit from co-firing their furnaces using wood pellets, Green Circle doesn’t yet have plans on selling its product in the United States.

“We hope and believe that there will be a domestic market on the power-generation side opening up in the future,” Neraas says. “There are a considerable number of coal-fired power plants in the U.S. that could replace some of the coal they use with wood pellets with relatively moderate investments and in a relatively short period of time.”

“We’re always looking for our best deals,” Waller says. “We have contracts with the Port of Panama City, the ship loaders, and we have to satisfy those first. But if we were to expand or produce wood pellets beyond those contracts, then we would love it to be domestic if that’s where the best deal is.”

Kimbrough says he’s OK with the fact that it is a completely export business. The worldwide attention the plant has been getting is worth its weight in “green” gold.

“(The company) has appeared on the cover of possibly a dozen publications throughout Europe related to the energy industry,” Kimbrough says. “People all over the world are reading about this. It has become an international symbol of energy independence and what is possible in energy creation.

“Another thing it has brought us is political attention,” Kimbrough says of the wood-pellet processing plant. “This is a top visible entity on the governor’s radar screen and that of our federal legislative delegation. So the jobs, the global visibility and the political visibility have given us a place at the table in the discussion of renewable energy and renewable energy jobs in the Panhandle.”