The amount of wood pellets chipped out of British Columbia’s forests and shipped overseas has doubled in the past 10 years, raising concerns the timber industry continues to neglect manufacturing in favour of direct export, a new report says.
The report, released Wednesday by the Canadian Centre for Policy Alternatives (CCPA) and authored by forestry expert Ben Parfitt, analyzes the rise of Japan as B.C.’s largest destination for wood pellets — a replacement fuel that gained popularity after the country shut down its nuclear reactors after the 2010 tsunami-triggered meltdown at its Fukushima nuclear plant.
“We did not have a pellet industry in British Columbia 25 years ago,” said Parfitt. “When you create effectively a whole new demand on forests, you're adding to the pressure on those forests.”
“There are tens of thousands of logs in British Columbia that originate in primary forests that are getting turned directly into wood pellets,” he added.
Part of the problem, said Parfitt, is that B.C.’s forests already face significant demand from sawmill and pulp and paper operations. The result, he said, is “we are on the cusp of a sustained and deep decline of timber availability in the province precisely because we've lost too much too quickly.”
Pellet shipments to Japan alone have skyrocketed 27-fold over the past decade, spiking to 1.7 million tonnes in 2023 from 65,000 tonnes in 2014. The country now absorbs 76 per cent of all wood pellet exports from the province, the report found. But it’s not the only destination for B.C.’s wood pellets.
U.K. power company allegedly chipping logs from ‘irreplaceable’ forest
One of the biggest players in B.C. is Drax, a U.K. power company that has received £6bn in government green subsidies. In 2021, Drax purchased Pinnacle Renewable Energy Inc. in a deal that gave them control of the majority of wood pellet production in the province. By 2023, the company owned eight of 12 B.C. pellet mills and controlled 80 per cent of pellet exports, according to the CCPA report.
In an April 2023 news release cited in the report, Drax said 81 per cent of the wood it uses in its Canadian pellet operations comes from “sawmill residues.”
A year earlier, Parfitt said he stood high on a hillside overlooking a pellet operation in Burns Lake, B.C., where he watched for two hours as trucks dropped off whole logs on a conveyor belt where they were turned directly into pellets.
“It was really a dramatic representation of what is going on,” he said.
In his report, Parfitt adds that the CCPA witnessed similar “‘low-grade’ logs being converted directly into large squares of solid wood” at a sawmill near Witset, B.C. At a pellet mill near Smithers, Parfitt found the valley’s “notoriously poor air quality during slash-burning season has not improved since the pellet mill commenced operations.”
When reached for comment, a spokesperson for Drax said Canada's forests are carefully managed by government regulation and third-party certifications.
“Drax works with government and industry partners to source by-products and residual material for pellets,” said the spokesperson in an email. “The assumptions in this report do not accurately reflect the B.C. government's sustainable management of provincial forests, or Drax's rigorous sustainability standards.”
The Drax spokesperson said it mostly sources its biomass from harvesting and sawmill residues, as well as “low-grade roundwood that is not suitable for sawmilling.”
“These types of fibre are referred to by activists as ‘whole trees’ — a phrase which implies that biomass is produced from the harvesting of sawmill grade trees, which is incorrect,” stated the email.
The Drax spokesperson said the company is not sourcing fibre directly from blocks which overlap with old-growth deferral areas identified by the province, and “to suggest otherwise would be grossly inaccurate and misleading.”
In January, a BBC investigation revealed Drax has been sourcing and burning wood pellets from whole logs pulled from B.C. old-growth forests described as "rare, at risk and irreplaceable.”
The BBC cites forestry documents from the first nine months of 2023 that show 30 timber markings. The markings, they say, indicate the wood came from forests where more than 25 per cent of trees were designated as old growth.
“Drax's use of timber from this ‘irreplaceable’ forest was far from a one-off,” concluded the BBC.
In response to the BBC's reporting, the Drax spokesperson said the company made a decision in October 2023 to stop sourcing wood from old-growth deferral areas (OGDA). Since then, the spokesperson said the company was aware of nine out of 8,000 truck loads that were mistakenly delivered from such forests to Drax chipping facilities.
The email said the company is working to prevent such incidents from happening again in the future and that none of the material on the trucks in question were delivered to Drax Power Station in the U.K.
“Therefore, suggesting that Drax is taking tens of thousands of tonnes of material from sites with OGDA overlap, would be false and an inaccurate representation of Drax’s operations.”
B.C. forests face collision between lack of wood and rising demand
Parfitt says logging rates have fallen 38 per cent in the past decade, a trend he says is forecast to worsen in the coming years as the number of sawmills in B.C. drops from 111 in 2005 to an expected 47 in 2035.
As the residual wood from those operations goes down, he says the wood pellet industry will increasingly be pushed to chip what few whole logs are available.
“We have a bit of a perfect storm,” he said. “We have a stunning increase in demand playing out against clear signs of a supply crisis.”
Among his recommendations, Parfitt says policymakers should enact a strict ban on pellets made from logged primary forests. He also says the province should enact a “solid wood first” policy where companies are penalized if they covert logs into wood pellets when the wood could otherwise be made into value-added products like trusses and joists.
He recommends applying a carbon tax on emissions connected to logs or wood waste now burned as “slash.” And to improve transparency, he proposes a legal requirement that all timber-processing facilities submit to annual reports detailing what wood they use.
Glacier Media reached out to B.C.'s Ministry of Forests but has yet to receive a response.
Editor's note: This story has been updated to reflect comments from a Drax spokesperson.
