Trends of the energy wood chip market in Europe

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1 Jean-Francois Guillon Africa Renewables ltd Trends of the energy wood chip market in Europe AEBIOM conference Brussels May 2014 (under signature)

2 Afriren background Established in May 2010 Headquartered in Belgium Offices/project in London, Ghana, Ivory Coast, Nigeria and Cameroon Over 100 staff worldwide Over 200,000 MT of biomass originated from West Africa over the past 30 months Member of the UN Global Compact FSC certified

3 Contents Current demand Projected consumption 2020 Pricing

4 There are 2 sources driving the woodchips consumption in Europe : - The pulp & paper market. Now gradually weakening... - The CHP markets.now gradually growing - In both cases theses industries have been traditionnaly sourcing their biomass fuel from local market or immediately crossborder markets. - The new rules of phythosanitary requirements and dysfunction of physical availability is now raising the issue of whether imported woodchips would compete with local biomass.

5 European woodchip demand 14.5 MMT /yr Sweden: 2mn t/yr Finland: 2mn t/yr UK & Ireland: 500,000t/yr Benelux: 750,000 t/yr Denmark: 1.75mn t/yr Poland: 2.75mn t/yr France: 4mn t/yr Italy: 2mn t/yr Turkey:

6 France Demand: 4 MMT Sourcing: 70 % is locally sourced with a local production capacity of 2.7 MMT/ yr Production ~85pc capacityl Imports :1.3 M MT /Yr imports from Spain Portugal

7 Poland Demand: 2.75 M MT Sourcing: local Projection: Imports expected to surge + 20% from 2017

8 Denmark Demand : 1.75 MMT / yr Local sourcing : 1.33 M MT /Yr Imports : 420,000 MMT /YR Russia/Baltics AFRICA Germany Sweden France Previsions : imports to double by 2017, Mt /yr

The Russian parameter + 1 MMt /yr of in 2013 300,000t

9 The Russian parameter + 1 MMt /yr of in ,000t 500,000t 120,000t * Source: Bioenergy International Russia

10 Small scale CHP plants in Europe European CHP order book very healthy - Increasing demand from small towns to secure own production of heat and power based from sustainable sources - Woodchip storage does not require investment : open air coning - Woodchip carbon foot print is lower than pellet

11 Development of large-scale power and CHP plants Location Capacity (MW) Est. Commissioning Demand (MT/yr) Limousin, France ,000 Provence, France ,000 Utrecht, Netherlands ,000 Vartan, Sweden ,000,000 Ghent, Belgium ,000,000 Skaerbaek, Denmark ,000 Italy (multiple plants) ,000 Teeside, UK ,000 Ireland (multiple plants) ,000 Southampton, UK ,000 Helsinki, Finland (unconfirmed) ,000

Projected demand for 2020 + 28 M MMT /yr Sweden: 3mn t/yr Finland: 3.7mn t/yr Denmark: 2.

12 Projected demand for M MMT /yr Sweden: 3mn t/yr Finland: 3.7mn t/yr Denmark: 2.55mn t/yr UK & Ireland: 3mn t/yr Benelux: 2mn t/yr Poland: 3.75mn t/yr France: 7mn t/yr Italy: 3mn t/yr Turkey:

13 /GJ Pricing Snapshot Wood chip prices, imports vs local 7,5 7 6,5 6 5,5 5 Argus wood chips, cif NWE FOEX forest biomass Finland, delivered to plant 4,5 4 3,5 3 Apr '13 Jul '13 Oct '13 Jan '14 Apr '14

14 /MWh Historical Prices Local wood chip prices, Finland Finland Statistics, forest biomass, delivered to plant FOEX forest biomass Finland, delivered to plant Jan '07 Jul'07 Jan '08 Jul'08 Jan '09 Jul'09 Jan '10 Jul'10 Jan '11 Jul'11 Jan '12 Jul'12 Jan '13 Jul'13 Jan '14

15 Pricing Market immature based on local sourcing Little datas on reporting and figure collection yet Shortage of local physical biomass pushing CHP to review supply strategy Expected demand to be covered by imports if CHP plant is located max 200 Km from port Import prices CIF Rouen, CIF Crotone, CIF Aarhus is competing with locally produced biomass fuel = 5 Euro /GJ

Organisation study 71bn t, out of the planet s 422bn t of biomass

16 The African Opportunity *Source The Economist Abundance of natural resources in Africa United Nations Food and Agriculture Organisation study 71bn t, out of the planet s 422bn t of biomass can be found in Africa, with only South America housing a greater amount.

17 No phytosanitary restrictions from Africa Phytosanitary import restrictions for wood chips into the EU Trade allowed inside the EU (Portugal has specific exports restrictions) Phytosanitary certificate, debarking or heat treatment required Heat treatment or fumigation required for import to EU (country specific) Import is allowed into EU

African projects drive an important Circle of Socio-Economic Benefits Local

forest threat is alleviated National level Brings hard currency into the

Reduce dependence on fossil fuels Plantation Manager Biomass income is an

18 African projects drive an important Circle of Socio-Economic Benefits Local community Additional jobs Support small-scale charcoal and timber trade Primary forest threat is alleviated National level Brings hard currency into the country New economic activity Technology transfer Lead the green revolution Reduce dependence on fossil fuels Plantation Manager Biomass income is an incentive for replanting Biomass logistic chain of extraction prepares the ground for replanting

19 Africa Renewables Ltd Stability of supply Competitive pricing Supply from Ghana & Cameroon No restricted species for EU phyto requirements Sustainable FSC control wood

Contact J.F.Guillon Managing Director Tel: +44 (0) 203 402 5246 Mob: +44 (0) 7768 078199 jfg@afriren.

20 Contact J.F.Guillon Managing Director Tel: +44 (0) Mob: +44 (0) Louisa Blair Marketing Manager Tel: +44 (0) Mob: +44( 0) Mohammed Safdar Shipping & Operations Tel: +44 (0) Mob: +44 (0)

European Pulpwood Import Markets February 2016, Vietnam

European Pulpwood Import Markets February 2016, Vietnam 1. European pulpwood production Europe. Main Players PULP PRODUCTION European pulp production ~31 Mill tad/yr 11.6 Mill. MT/year 10.5 Mill. MT/year