South Korea policy set to drive biomass uptake

July 19, 2011, London, UK – South Korean
biomass demand is forecast to reach 10 million tonnes/year by 2020, following
the introduction of renewable portfolio standards (RPS) for power producers.
The country is targeting a 30% reduction in CO2 emissions from projected levels
by 2020 and expects biomass to play a major role in meeting those targets.
South Korea emitted approximately 716 million tonnes of CO2 in 2010.

Canadian wood pellet exports to South Korea
have risen from 0 to 50,000 tonnes/year in 2011, says Wood Pellet Association
of Canada executive director Gordon Murray, with producers in British Columbia
expecting this figure to grow considerably. Australia's largest producer,
Plantation Energy, supplies the South Korean and Japanese markets on a regular
basis.

The South Korean government has instructed
more than 350 of the country's largest firms to reduce CO2 emissions. Each
company is in the process of submitting plans to the government this quarter,
with the new measures to be implemented in 2012. The RPS for power producers,
which commits them to produce a minimum of 2% renewable energy in 2012,
increasing by 0.5%/year until they are producing a minimum of 10% by 2020, affects
12 South Korean utilities, including Korea Southeast Power, K-Power, and GS
Power.

A feed-in tariff (FIT) scheme is in place
for firms that do not receive capital investment subsidies from the government
of more than 30%. But the RPS will replace the FIT next year, and Canadian
pellet producers have been working hard to secure market share ahead of the
change.

Canadian pellet producer Biomass Secure
Power announced a 10-year supply contract in May 2011 with South Korean
resources and industrial firm LG International.

Vietnam, Malaysia, Thailand, Indonesia, and
New Zealand are also likely to be supply regions for South Korea.