An October 2017 news article by Bill Phillips of the PG Daily News announced that Sumitomo Corporation of Japan recently acquired a 48 per cent stake in the local company Pacific BioEnergy Corporation (PBEC), which is the second-largest manufacturer of wood pellets in Canada.
Don Steele, CEO of PBEC, describes the Sumitomo investment as a vote of confidence in their vision to continue to build Pacific BioEnergy along with providing employment and economic development benefits in B.C.’s central and northern interior regions. He then describes some events leading up to the investment announcement.
“Sumitomo Corporation owns several power-generation plants in Japan and the investment will help it secure a long-term supply of renewable fuel. The company is Japan’s number one importer of wood pellets and has been importing B.C. wood pellets for power generation since 2008. With the meltdown of the Fukushima nuclear plant in Japan a few years ago, that country has increasingly looked at different way to power the nation, to the benefit of the pellet industry. There’s a lot of a material that is not being used by the sawmilling industry and the pulp industry that can go into the bioenergy stream,” he said. “In fact, there are millions of tonnes of it. We call it secondary harvesting opportunity.”
Katsunori Takamitsu, Sumitomo’s general manager, biomass trading and investment, stated his company is proud to be involved in the environmentally friendly business that helps decrease carbon dioxide emissions. Pellets, which are produced from wood waste such as logging debris, bark, sawdust and wood shavings – materials that were formerly burned and released into the air shed – are used as a clean, renewable energy source with a growing global demand.
The provincial government is also very supportive of these kinds of investments, as stated by the Minister of Forests, Lands, Natural Resource Operations and Rural Development, Doug Donaldson. With much of the Interior forest damaged by wildfires this summer, there will be plenty of fibre for companies like Pacific Bioenergy to create value-added products, rather than burning the material in the field.
According to a press release from the Lesprom Network, this latest agreement with the Japanese company was made possible due to the awarding of a beetle salvage licence a few years ago in the Quesnel Timber Supply Area to PBEC, which developed an agreement with Tolko’s Quest Wood sawmill and Nazko Logging. The agreement gave Tolko another five years’ supply of logs, and also allows the company to invest in a new ‘Biomass Processing Facility’. One of the big pluses is the ability to convert low-value mountain pine beetle-killed logs into pulp chips and biomass fibre for use at facilities in the area.
The agreement also provides certainty for Nazko Logging, which is the largest employer in its community and generates much-needed revenue for community services. The mountain pine beetle, along with the fires of last two years, have ravaged most of the pine forest in their traditional territory, and they now have an opportunity to salvage the beetle-killed fibre, deliver logs to the Quest Wood mill for production, and use the low-value wood in Tolko’s new ‘Biomass Processing Facility’.
It is my assumption that it may make more sense for some of the low-quality fibre in the west Chilcotin to make its way directly to Quesnel via Nazko, rather than coming through Williams Lake. With the additional losses of timber to wildfires, it is important to use the ‘secondary harvesting opportunity’ to make up for the losses of the logs used for lumber manufacture. This Japanese investment also gives Canada better bargaining power in the ongoing soft wood lumber discussions with the USA.
Jim Hilton is a professional agrologist and forester who has lived and worked in the Cariboo-Chilcotin for the past 40 years. Now retired, Hilton still volunteers his skills with local community forests organizations.