Feasibility Study on Wood Waste Utilization in Serbia - Current Market Analysis

Present Volume of Wood Waste Utilization for Fuel in Industry and Residential Sectors

Serbian industry is generally in a transition period, which means not only transition in ownership, but also transition in the number of number of employees, renewal of production, change of production programs, looking for new markets, or trying to return to the old ones. As a result, from year to year, the main parameters of production in a single company have been changing.

In principal, before privatization, wood processing factories had boilers using waste biomass as fuel. However, it should be pointed out that many boilers are old, usually over 20 years, and that many of them have been out of operation for the last several years.

After the political and economic crisis started in 1990, wood processing companies began losing their markets, revenues went down, and the rate of production decreased. As the economic crisis became severe, the price of electricity became very low, and the general trend many companies followed was switching their biomass or fossil fuel fired boilers to electrical ones. Wood processing companies significantly decreased their rate of production, but the demand for energy was not decreased at the same rate, another reason companies started using fossil fuel and electricity. Some companies were in a favorable position to provide relatively cheap liquid fuel. As a consequence, when the crisis ended many companies had old biomass boilers that had been out of operation for several years. Today, these companies are trying to renew energy production based on available biomass wastes.

The largest wood processing companies in Serbia have not reached the optimal rate of production to date, or even the past production rate. Typically, production does not exceed 50% of installed capacity. The problem is outages of equipment, lack of investments for new equipment, poor quality level of products, and probably an inability to be competitive in the market with products they can produce.

Energy demand is not proportional to the rate of production of wood products. At decreased production levels, energy demand does not decrease as much as the production rate. Therefore, some wood processing companies operating their boilers on wood wastes are in position of insufficient fuel. If they want to operate their biomass boilers, they need additional biomass wastes.

The typical solution is to obtain additional biomass wastes from small enterprises, sawmills that do not use biomass furnaces or boilers, and where a problem with disposing of wood wastes such as sawdust exists. Currently, this cooperation between large and small companies is good, since everyone resolves their problems. But this solution is viable only when small enterprises are relatively close to large ones.

In Serbia, there are only a few large wood processing companies, and more than 2000 small ones. This means that many of the small enterprises should use wood waste resulting from their own production process or solve this issue in another way. Unfortunately, many of them just deposit wood wastes in their surroundings, or dump them in the closest river.

Regarding the quantity of wood wastes used in industry as energy source or for production of briquettes or pellets, it is very hard to make a precise assessment, as the situation is changing from year to year, and from company to company.

It can most likely be assumed that small sawmills which only operate during the warm seasons do not use wood wastes. Hence wood wastes of 240 000 m3 from small sawmills with periodic operation is probably available. That value could be treated as a minimum amount of available wood wastes. The maximum value of wood residues from all sawmills is 480 000 m3 per year. The true volume of wood wastes available for pellet production is somewhere between these two values.

A regular market exists in Serbia for fuelwood with trade of 1,41 million m3 [3]. But a market for wood briquettes and pellets is practically nonexistent, despite some exceptions such as sales at some coal markets or even at some gas oil stations.

The residential sector in Serbia can use wood wastes as fuel practically only if houses are close to sawmills, i.e. to the site where wood wastes emerge. This is the case in small villages with a great number of small sawmills. The residential sector can use only coarse wood wastes, but not woodchips and sawdust, due to the lack of appropriate transport vessels. If a small sawmill is on the property of a household, this household has surplus of wood wastes, which is over their demand for heating during winter. That surplus even if it is used it is done typically out of market, or usually just put at some disposal site. Therefore, it can be said that wood wastes utilization in the residential sector is very small.

Regarding the use of wood wastes for electricity production, co-generation in boilers out of wood processing industry and for use in district heating systems, no such plant exists at the moment.

Current and Expected Demand for Wood Waste in Serbia

Some large wood processing companies, with large-capacity biomass boilers, have a shortage of wood wastes for energy purposes because of a low production rate of their main products and corresponding low rate of wood wastes production. As a result, such companies often obtain, usually free of charge, biomass wastes from small wood processing companies. In that sense it can be said that there is a demand for wood waste. But those are cases for only a few large wood processing companies.

In general, there is currently a significant surplus of forest and wood processing wastes not used in any way.

Until two years ago there was no significant producer of wood pellets or briquettes in Serbia. However, for the last two years there has been greater interest in pellet production. Several prospective producers announced the start of wood pellet production in the first half of 2008 with capacity of 18 000 t, 30 000 t and 100 000 t per year, while others plan to start production in 2009. Generally, several small and large investors made the decision to start wood pellet production based on the possibility of export, and on an assessment that they could generate revenue from the international market.

One of the main reasons for not using biomass as fuel is the low price of electricity, which results in many homes using electrical heaters for space heating.

An additional reason for the practically nonexistent demand for wood pellets is that until 2008, there were no domestic producers of stoves or small boilers using them. Equipment for wood pellets, not only stoves and boilers, but feeding systems as well, can be purchased from developed countries such as Austria and Italy. But such equipment is expensive for a typical customer in Serbia and cannot be sold in high quantities. Some stoves and small boilers made in Serbia are of outdated construction, and despite claiming to be for biomass combustion, are actually designed for coal.. Hence, when burning biomass such units have low combustion efficiency and high biomass consumption.

It can be estimated that in the beginning of 2009, based on estimated production from six factories, production of wood pellets in Serbia would not exceed 250 000 t per year.

The current price for first and second class fuel wood given by the public company Srbijašume, which manages the state forests, is 15-30 €/m3 stacked at the forest road. Based on the inquiry of a stock market seller, the retail price for customers in Belgrade is on average about 50 €/m3. In this case the stacked volume of wood is1 m3 .

The price of fuel wood varies from town to town. In Belgrade, where the population has the greatest consumer resources, the price of fuel wood is double the price in Pirot, a town located in southeast Serbia (table 4.1).

The current price of wood waste in state owned forests, given by the public company Srbijašume is in the range 4,9 – 11 €/loose m3 or 11 – 20 €/real m3 [11], transportation costs not included.

The prices for other fuels and electricity will have an effect on future demand for wood wastes fuel in Serbia. Beside these domestic prices, demand for wood wastes will be affected by the demand of developed European countries for biofuels - wood pellets.

At present, there is no domestic market for wood pellets and briquettes in Serbia. Practically all production of pellets is exported. Therefore, the price of pellets in Serbia is assumed to take into account prices in European countries where wood pellets are used in large volumes.

The values for energy conversion factors (ή) are assumed for medium and small boilers designed for wood and pellets combustion. In case of considering small boilers of actual state in Serbia the conversion factor would be significantly lower, and cost of heating by wood higher. But we expect that future consumers of pellets will install new boilers designed for wood combustion.

The present ratio between prices of different fuels in Serbia generally favors wood-based fuels. The comparison of heating costs by different fuels shows that wood-based fuel is the cheapest (table 4.1). The price of pellets for customers in Serbia is assumed to be 80 €/t, including transportation. VAT is added to that price, resulting in the retail price of 6912 din/t .

Because of different prices for fuel wood in Belgrade and Pirot, wood pellets would be more expensive than fuelwood in Pirot, but cheaper than fuelwood in Belgrade. The most expensive solution for heating is light fuel oil and LPG (Liquid petrol gas). Then electricity follows, and after that heavy fuel oil (mazut) and natural gas. Heating with different types of coal is relatively close to the cost of heating with wood pellets and fuel wood. Even more, heating in Belgrade based on any kind of coal is little cheaper than using fuel wood. It is worth noting that in Pirot, the price of lignite coal is higher than in Belgrade, due to the fact that the coal mine Kolubara is much father from Pirot than Belgrade. Heating based on lignite Kolubara previously separated and dried is the most cost effective among coals.

The price of heating with wood pellets is competitive to all other fuels probably only in large towns, where the income of the population is high enough, and in the Province of Vojvodina. Vojvodina has relatively small forest areas, wood cutting is low, and therefore the demand for fuel wood is greater than production. Pirot, which is in a region modestly rich in forests, shows that the affluence of the population and the vicinity of forests can lead to a low price of fuel wood. This fact should be taken into account when analyzing the feasibility of pellet production, especially if the production is directed toward the domestic market.

In the domestic market, wood pellets can replace fossil fuels used for heat in different sectors: industry, residential, and agriculture. According to the energy balance of Serbia for 2006, the industrial sector consumed much less coal than the residential and agricultural sectors (Table 4.2). The residential sector includes public buildings. More liquid fuel is consumed in industry than in the other two sectors. Total fuel wood consumption is at the level of natural gas consumption in residential and agricultural sectors.

With production of 500 000 t/year and an energy value of 210 000 toe [ton of equivalent oil], wood pellets can replace about half the coal consumption in the residential and agricultural sectors, or totally replace the liquid fuel consumption in these two sectors, or totally replace the coal consumption in the industrial sector. Given that wood pellet production can replace 35% of the final energy consumption of coal, or 35% of the final energy consumption of liquid fuel, it is obvious that the energy potential of wood pellets has significant value for the energy sector in Serbia.

Current Wood Waste Utilization in the Region

Serbia, Montenegro, Croatia, and Bosnia & Herzegovina are in very similar positions regarding wood waste utilization.

Forest wood wastes resulting after timber cutting is only partially used, while the utilization of wood wastes from the wood processing industry varies depending on the technological level of companies in that sector.

Until 1992, there were four producers of chipboard in Bosnia and Herzegovina, but currently none are operating. [9]. Furniture production companies have to import chipboard from Croatia and Slovenia, while Serbia has insufficient chipboard production for furniture producers in Serbia.

Chipboard production companies are very good places for utilizing wood wastes for non- energy purposes.

Similar to the trend in Serbia, new enterprises are emerging dealing with pellet production in the whole region. The general motivation for new enterprises or for existing wood processing companies in the region to produce pellets is to sell them in developed countries only. Practically speaking, there is no market or demand for pellets in the region. There are single examples of using pellets, but the majority of pellet production in the region is intended for export.

Until 2007, there were no pellet producers in Croatia. Now, according to the available data, there are several, including one big producer. The total capacity of all pellet production in Croatia does not exceed 80 000 tons per year. An important step in the development of pellet production there was the creation of a cluster of existing and prospective small pellet.

Reliable information about present pellet production in Bosnia & Herzegovina and Montenegro could not be found. The assumption is that Montenegro has only a few small producers, while Bosnia & Herzegovina has bigger producers. The assumed production in these two countries is about 100 000 t/year.

Comparing the values of pellet production in Croatia, Bosnia & Herzegovina, and Montenegro (together app. 200 000 t/year) with the announced capacity for 2009 in Serbia (app. 250 000 t/year), together with annual wood cutting in these countries (table 2.3, 2,59 million m3 in Serbia, and over 10 million m3 in the other three countries), it can be concluded that there is significant potential for pellet production in the region.

European Union Market

In March 2007 the European Union Member States agreed to a 20% binding target by 2020 for renewable energy sources as a response to the European Commission package proposed. Biomass will be the main contributor to achieving that target. According to the European Commission, biomass technology could achieve at that time up to 215-239 Mtoe (only using the indigenous resources). As woodfuels (including wood pellets) are the most available biomass form in most European countries, they will play a crucial role in achieving the 2020 objective. In addition, bioenergy trade (imports) represents a great opportunity to achieve even higher shares.

The main objective of the European Union Biomass Action Plan, put forward in December 2005, is to double the 4% share of biomass energy by 2010.

The availability of raw material, competitive prices, and diversified energy policies favors development of a wood pellet industry in the EU. Sweden, Denmark, Germany, and Austria have the most highly developed pellet markets; others such as Italy, Belgium, France, and the UK recently have been following that trend. In 2006, the production of pellets in the EU was about 4,5 million tons, with Sweden, Austria, and Germany the main producers. Almost 300 pellet plants are located in the EU ranging from small scale producers with an annual capacity from 2000 to 150 000 tons of pellets [18].

In 2006, wood pellet consumption in the EU accounted for around 5,5 million tons, which indicates a significant amount of import. Wood pellets are used both in electricity and heat production (in large, medium, and small scale).

In the EU, the price of wood pellets varies from country to country, which intensifies the trade in wood pellets. The comparison of average prices in Austria, Finland, Germany, Spain, and Sweden in 2005 and 2006 are presented in Figure 4.3.

Austria exports more than half of its pellet production (780 000 tons in 2007 [18]) to other countries. It could be reasoned that this means that the Austrian market has a surplus of wood pellets, and consequently the price of wood pellets would be low. But the price of wood pellets in Austria is high.

Wood pellets are the most expensive in Germany, with Austria and Sweden following. Prices are lower in Finland and Spain. Austria and Sweden have very high prices despite the fact that they have immense wood resources. Their market of biomass use for energy is developed, and the demand for wood pellets is high, which leads to an increase in price.

The price of wood pellets in Austria significantly increased during the winter of 2006/2007 (Figure 4.4). Just after winter the price decreased to the level of the previous year. It can be seen that during the winters of 2005/2006 and 2007/2008 the price of pellets was very stable. After the winter of 2007/2008, the price decreased slightly in comparison with the same period the year before. Since Austria exports more than half of its production to other countries, and a great part to Germany, the jump in pellet price during the winter of 2006/2007 was likely the consequence of the jump of pellet price in Germany in the same period (Figure 4.5). More and more wood pellet producers are emerging in Europe in the European Union (Ukraine, Belarus, Bosnia, Serbia, and Croatia as well) and the offer of wood pellets is larger, and which probably drives the price decrease.

In January 2007, the price of wood pellets in Germany was extremely high (265 €/t) and reached the price of fuel oil (Figure 4.5). Very soon after that, in March 2007 the price of wood pellets decreased to the level before of before the winter of 2006/2007 (200 €/t). The probable reason for that increase in price was an increased demand for pellets, and the increased demand could be caused by colder weather or by higher incentives for bio-fuel use. Comparing the prices of natural gas, fuel oil, and wood pellets in Germany, it can be concluded that using wood pellets is the cheapest solution for heating.

The Netherlands has very limited domestic resources of wood wastes. But the Netherlands has very great consumption of wood pellets. According to ProPellets Austria, the annual demand for pellets in the Netherlands is around 1,4 million tones. Pellets are imported from South Africa, North America (mainly Canada), and South America (e.g. Chile and Brazil) [18].

A comparison of prices in Austria and Serbia (Table 4.3) shows that electricity in Serbia is much cheaper, almost three times cheaper, than Austria, while fuel oil is somewhat more expensive. It is clear that the price of wood pellets in Austria is absolutely the cheapest fuel in comparison with those listed in Table 4.3, while in Serbia, with the assumed price of about 80 €/t, wood pellets is the cheapest fuel in comparison with the listed ones in Table 4.3, but this is not the case in comparison with fuel wood (Table 4.1).

Regulatory Environment for Wood Waste Fuel Products in Serbia

Biomass pellet and briquette production for the Serbian market is practically nonexistent. National standards for their production have not been officially adopted yet. But because pellet production in Serbia is mainly directed to EU countries, producers in Serbia make wood pellets according to standards of these countries (Table 4.4).

The national Law on Wastes is in preparation, specifically, a draft after revision was prepared a few years ago, but the law has not yet been adopted. The Law on Wastes will define different kind of wastes according to their harmful potential, and will define measures for waste handling and disposal, as well as penalties for disobeying the rules.

Serbia currently has two positive acts regarding wastes - the Law on manipulation with dangerous materials (Gazette of The Republic of Serbia No. 26/1996), and the Rulebook on dangerous materials (Gazette of The Republic of Serbia No. 31/1982) These acts are mainly devoted to toxic materials, which means that they do not cover wood waste from the wood processing industry.

The only act which presently might apply to wood waste is the Law on Waters [14], which prohibits delivering into rivers all materials which can lead to the increase in harmful elements in the water over the prescribed limits. Since wood waste, in a quantity produced by wood processing companies, would endanger quality of water in rivers, it means that it is forbidden to deliver wood wastes in rivers. This prohibition has been enacted, but in practice penalties are very rarely enforced.

The Law on Forests [12] deals with forest management for the optimum utilization of forests, but it does not prescribe treatment or disposal of residues from timber cutting. The general approach is to leave stumps of beech, oak, and conifer, because the cost of removal is high, while the stumps of poplar are removed for clear-cutting. Sometimes biomass wastes in state- owned forests are collected, removed, and disposed of near forest roads, and depending on market value, biomass wastes are sold or are given to local inhabitants. But if a type of biomass wastes does not have any market value, it can be left in forests. Since logs above 7cm in diameter have market value, it can be expected that some quantity of smaller diameter branches will be left in forests.

It can be expected that in the near future, some norms similar to the ones in the European Union would be adopted in Serbia. Such norms consider the balance of different elements in the soil, such as nitrogen and mineral matters. Since the balance of nitrogen in the soil is very important for the regular growth of trees and the development of forests, it is necessary to prevent an overload or shortage of nitrogen in soil. These measures are conducted by removing or leaving some quantities of wood wastes, especially stumps.

Regarding the combustion of fuels, including biomass, there are the Rulebook on limiting values of emission, methods and periods of measurements (Gazette of The Republic of Serbia No. 35/1997), and the Rulebook on limiting value of emission, methods of measurements and criteria for determination of measurement sites (Gazette of The Republic of Serbia No. 30/1999). Both rulebooks need updating in order to be in accordance with common practices of European countries.

As it can be seen in Table 4.5, the Rulebook defines emission limits for boilers on biomass above 50 MW, which do not exist in Serbia, while it does not prescribe emission limits for medium and small boilers below 1 MW, which constitute the greatest share of installed biomass boilers. According to the Rulebook, the standard JUS M.E6.110 is applied to boilers below 1 MW. The standard was adopted twenty years ago, without defined emission limits for CO and hydrocarbon.

A rulebook regarding the combustion efficiency of different fuels in small and medium boilers is in preparation and is expected to be adopted this year. Its purpose is to enhance the combustion efficiency of existing boilers. Even though it can be said that high efficiency leads to the minimum volume of unburned particles, and CO and CH4 emissions, this rule will not precisely prescribe emission limits from biomass boilers.

In the event Serbia develops a market for pellets, it would be necessary to develop standards regarding the quality of pellets and briquettes, declarations on products, and standards on the quality of boilers and furnaces.

Environmental and Other Impacts of Wood Waste Utilization



The utilization of forest and wood waste should be conducted in such a way that does not have an environmental impact on life in forests. Pursuant to the Law on Forests, the public companies Srbijašume and Vojvodinašume are responsible for the sustainable use of all forests in Serbia, private and state-owned.

Productive forestry should contribute to biodiversity, which means saving different species of plants and animals. Therefore typical measures in EU silviculture include leaving a number of old trees and dead wood (trunks) on the clear-cut, and preferably some young deciduous trees also. Regarding the branches, whether to remove them or not, the opinion is that once trees have been felled the natural environment is not disturbed further if the branches are also harvested. Consequently, consideration to nature does not imply a barrier to comprehensive use of forest fuel. But it is recommended not to remove all felling residues. Stumps are left in the soil in significant numbers, for both soil-beneficial and technical reasons (erosion prevention), and they favor wood-living organisms.

If the biodiversity in forests is protected and maintained, then almost only positive effects can be reported on the wood wastes utilization.

At the UN Conference on Climate Change in Kyoto in 1997, international obligations were drawn up to limit the emission of greenhouse gases. The greenhouse gases related to forestry and the energy sector are carbon dioxide CO2, methane CH4, and nitrogen-oxide N2O. The EU has resolved to reduce its emission by 8% from the level of 1990 by the period 2008-2012. Serbia is not an EU member and does not have defined obligations for reduction of its emissions. But the Treaty of Energy Community of the Balkan countries impose a duty on Serbia to make a plan for contribution to the implementation of Directive 2001/77/EC of the European Parliament and of the Council related to renewable energy sources.

Also, Serbia ratified the Kyoto Protocol in September 2007, and now is eligible to use one of the Kyoto mechanisms: the mechanism of clean development. That mechanism makes it possible to generate revenue by selling the quantity of emission reductions of CO2 through the implementation of projects that result in emission reduction. These projects can be jointly implemented with foreign partners. The next step of the Government of Serbia should be to establish an institutional organization and adopt the Strategy for Implementation of CDM projects. A great number of CDM projects can be based on biomass utilization for energy purposes.

The utilization of biomass for energy production is treated as CO2 neutral, based on the fact that plants capture CO2 during growth through the process of photosynthesis. Combustion of biomass releases CO2 but the same quantity that is already captured in the plant. If the use of forests is carried out in a sustainable way then all the CO2 released during combustion of biomass would be captured during the growth of the next generation plant. Therefore the EU Directives impose the increase of biomass and other renewable energy sources utilization for energy purpose.

Beside CO2, the use of biomass as an energy source has other positive effects. Comparing contents of ash in biomass and coal, it is obvious that the replacement of coal with biomass would decrease by several times the quantity of ash generated during combustion. Taking into account that ash contains toxic metals, and that ash from one plant is usually deposited in a selected site, means that the soil at these sites is very much polluted. Decreasing the volume of ash will help these sites be less endangered.

Comparing the sulfur content of biomass on one hand and coal and liquid fuel on the other demonstrates that utilization of biomass instead of these two types of fossil fuels would lead to a decrease of SO2 emission. SO2 is not a greenhouse gas, but its negative effect is the formation of so-called acid rains, which is harmful to forests, causing leaves and needles to drop off, and other forest damage.

In spite of the fact that it is useful for the sake of biodiversity to leave some residues after clear-cutting a forest, leaving all these residues in the forest would cause more damage than benefit. Areas under the residues would be degraded. The degradation would occur because of nitrogen and metals leaching from the residues. Nitrogen is very important for the growth of trees. Neither the lack nor an excess of nitrogen in soil is good for forests. It is of great importance to maintain the balance of nitrogen in forest soil, as well the balance of minerals. The balance of nitrogen can be controlled by leaving or removing some quantity of forest residues, while the balance of minerals, in the case of intensive use of forests for wood production, can be partly maintained by leaving part of residues, but also with wood ash recycling. It means that the ash generated after combustion of wood residues should be prepared in granules and returned to the forest soil.

In addition to the environmental impact, the utilization of wood residues would have positive effects on forest regions. If wood wastes utilization was developed and financially attractive, including residues of forest cutting, forest owners and managers would try to increase the forest area that would be used as a resource. Therefore, it is necessary to improve the existing forest infrastructure and develop new forest infrastructure. This will enable forest managers and staff to reach all forest areas and to act if necessary for the protection of forests against disease and fires.

The regions with the largest area of forests in Serbia are some of its poorest ones. The municipalities of Kuršumlija, Prijepolje, and Majdanpek are examples. Sustainable and intensive utilization of forests and wood residues in these areas would lead to an increase in employment of local people. Since the bulk density of forest and wood residues are rather low, it is not economically viable to transport residues long distances, and therefore industry of wood processing and wood fuel production would operate more intensively and new enterprises would be established.

It is hoped that the intensive exploitation of forests will lead to a greater concern and understanding for sustainability and environmental protection. Activities directly connected to wood processing and fuelwood production, as well as activities related to maintenance of sustainable use of forests, environmental protection would ask for a new engagement of the local population. This new engagement could lead to the improvement of the population’s social status. It must not be forgotten, the potential damage, which could occur if the utilization of forests is not sustainable and if wood fuel is not used in an efficient way.

As it was previously mentioned, forests must be used in a sustainable way with protection of the biodiversity. A sustainable way means that the forest area and the volume of trees must not be decreased in the long term and the forest soil must not undergo degradation by the depletion of minerals and nitrogen. Trees and animal species must be preserved, and animals be provided with secure new settlements prior to new clear-cutting of forests.

The biomass combustion process is generally treated as CO2 neutral, which contributes to the decrease of greenhouse gas emission. But if boilers and furnaces are inefficient then gaseous combustion products can contain a high concentration of methane, as a result of incomplete combustion. Methane is a gas with potential for greenhouse effects 21 times higher than CO2. Therefore, incomplete combustion with methane emission decreases the positive effects of biomass use as an energy source on the greenhouse gases balance in the atmosphere.

Possible Utilization of Wood Waste for Non-Energy Purposes

Different kinds of wood waste appear in forest wood cutting and wood processing. Typical wastes of forest wood cutting are: stumps with large roots, thin branches up to 7cm in diameter, bark of round wood. Some residues from wood cutting result from milling appropriate dimensions and shapes of commercial assortments. These residues have limited potential to be used for production of wood products, or be used for any other commercial purposes other than fuel. That means an estimated volume of 1,1 million m3 forest residues would be used mainly as fuel.

Wood residues in wood processing firms such as sawmills, pulp and paper factories, wood panel production, or factories producing furniture, doors and windows, are of a different kind. In sawmills and pulp and paper factories, wood residues consist of bark, woodchips, and sawdust, and biomass wastes containing toxic components after the chemical treatment of wood. Woodchips have many different uses, especially for board or panel production. Sawdust can also be used for board production, while bark is mostly used for energy purposes. Biomass wastes containing toxic components can be used as fuel only.

Residues used in the production of wooden windows and doors, and furniture, can be pure wood, contaminated wood, and parts of boards or panels. If the residue is contaminated wood, previously protected with some resins or paint, or parts of board containing resin in glue, then its utilization is limited. If it is not possible to find uses for large pieces of residue in the production of furniture, windows, and doors, this residue should be used as fuel, in an environmentally safe way, in the combustion process. An environmentally acceptable way means the combustion gases should satisfy the defined concentration limits regarding toxic gasses containing chlorine and mercury, while ash with higher concentrations of some metals, such as cadmium, zinc, and lead, should be specially treated.

This means contaminated residues are not suitable for pellet production or for use in households with open fire stoves. Standards for pellets (Austrian, Danish, German, EU) define the maximum content of dangerous metals in pellets. The solution for production of pellets could include mixing low contaminated wood residues with pure wood to keep the level of hazardous metals down, so as not to exceed the maximum levels allowable.

The production of wood based panels in Serbia is low. The process of privatization is ongoing. Some companies are already privatized, and they are trying to reach their former production rate. Only one factory partly satisfies the domestic demand for chipboard, while a factory for medium-density fiberboard (MDF) does not exist. Therefore, it can be expected, that instead of importing different wood based panels, existing factories will start to produce these themselves. Another solution is to build new factories for that specific purpose.

Particleboard production has good prospects in Serbia for two reasons: expressed domestic consumption that surpasses 100 000 m3/year, and available raw material for their production. Currently, much of the raw material needed for particleboard production is going unused or is used for heating. These actions could lead to competition between factories of wood based panels and wood pellets. However, taking into account the volume of forest residues, which is about 1.1 million m3, it can be concluded that forest residues provide enough raw material for production of both wood based panels and pellets.

Attitude of Main Stakeholders towards the Production and Utilization of Wood Waste for Energy Purposes

The stakeholders related to wood waste production and utilization can be divided into two main groups: entities in the chain of production and entities in the chain of utilization.

Stakeholders in the chain of production are: forest owners, entities doing harvesting, wood processing companies, and enterprises producing pellets.

Stakeholders in the chain of utilization are: householders, municipalities with heating systems for schools, hospitals and other public buildings, and wood processing companies.

Forest owners, both state and private, are generally very interested in as much utilization of their resources as possible. Of course, they must keep in mind the sustainable use of forests. The sustainability guidelines are defined by the public companies Srbijašume and Vojvodinašume. These companies mark the trees and define the quantity of trees that can be felled every year in all the forests of Serbia.

Entities dealing with the harvesting the forests also have interests in widening the forest assortments that can be commercial.

Some wood processing companies have opposite attitudes. Companies producing wood based panels where wood residues and bark can be used would have no interest in producing pellets. These companies are more interested in trying to satisfy their heat and electricity demands by using wood residues without the intention to produce pellets.

Others, who produce wood products but cannot use all the wood wastes they make, would try to make their wastes valuable. There are two possibilities for this: the first one is to sell or give the wood wastes to other entities which can produce biofuel or use them for heat production, and the second possibility is to produce biofuel /pellets themselves.

Presently, the first option, to give the wood wastes free of charge to another entity, is not as probable. This is because there is no obligation for producers of wood wastes to solve the wastes problem. A more probable option is to sell the wood wastes.

The second option, to produce the biofuel itself, is a feasible option only if the enterprises have enough volume, have a suitable quality of non-toxic wastes, and have the financial capabilities for new investments. It should be taken into account that many companies are new or have been recently privatized, which means that many of them have already spent a lot of money on investments in the main production line.

Presently, there are few enterprises in Serbia producing wood pellets. These enterprises are interested in enlarging their production of pellets. Some new entrepreneurs are interested in installing wood pellet equipment; it is just a matter of the market. Since the present price of wood pellets on the international market is over 150 €/ton, it seems very financially attractive for domestic producers. But in the future, the pellet producers who do not base production on their own wood wastes will probably have difficulty locating enough wood wastes.

Regarding consumers of wood wastes, the first place should be taken by wood processing companies. Usually they use wastes from their own production, sometimes supplemented with wastes from neighboring sawmills. But that consumption of wood wastes is out of the market.

Households are potentially great consumers of wood pellets. In addition, municipalities in forest regions with public buildings (schools, hospitals) are potentially great consumers as well.

Presently, households in villages use fuelwood and different kinds of biomass wastes, usually collected on their own land. Among the different biomass fuels, generally only fuelwood is used for heating houses and apartments in cities. Most public buildings in forest regions use fossil fuels, and in only a few cases fuelwood. Wood wastes, or biomass wastes of any kind, are not generally used in these entities.

For example, only few out of 15 agricultural and forestry secondary schools use agricultural and wood wastes for heating during the winter season. These schools mainly use fossil fuels, in spite of the fact that they are usually located at the periphery of small towns and have their own forest and arable land. Different kinds of biomass wastes are available to them, because almost all these schools have their own arable land and forest for conducting practical education of pupils.

There are several reasons entities do not use biomass wastes as fuel. One important reason is the level of fuel prices and electricity. The price of electricity price is fairly low compared to neighboring countries. Prices for light fuel and natural gas are as high as other countries. But the price of heavy fuel oil (mazut) is much lower than light fuel oil, and many entities with liquid fuel boilers would like to replace light fuel oil with mazut. The only investment in that case is changing the burner and fuel reservoir. All other equipment can be retained. The problem with using mazut is its sulfur content, which leads to higher emissions of SO2 than with other fuels, even domestic coal. Since there are no environmental restrictions on using low-quality mazut in small boilers in residential area, this is a way for owners of liquid fuel boilers to have cheap fuel without a big investment.

Public buildings under the management of municipalities have their heating provided by the municipalities. As a result, these entities are not as motivated to introduce technology using cheaper fuel that requires an operator’s skill and responsiveness. Lessons were learned in the past, during the economic crisis, when responsiveness was low and many facilities stopped operations, which forced many entities to replace biomass or coal boilers with another type where the need for a skilled operator was lower. Now it is not easy to return to technologies that require skilled operators.

A more serious consideration of the municipality budget would show that the utilization of wood wastes from that municipality would improve the economy. These municipalities would not have to pay for imported liquid or gaseous fuel, people of the area would be employed to collect and transport the wastes, and local enterprises of wood processing would have the potential for additional revenue. It should also be noted that the forest regions are mostly regions of low development and a boost to their economy is greatly needed.

Present prices of wood pellets on the international market are very attractive for producers in Serbia to export, but they are not favorable for consumers in Serbia. Taking into account that the present price of heating with the first rank fuelwood is about 31,2 €/MWh (Table 4.1), the price for lignite and brown coal is about 30 €/MWh , considering these priced it cannot be expected for consumers to use wood pellets with a much higher price.

Wood pellets however, are acceptable for wealthy households and small enterprises with their own heating systems. They can afford the additional equipment for the automatic operation of small boilers using wood pellets, and can afford the relatively high price of wood pellets as well.

In addition to the availability of wood wastes or pellets it is very important for the market to offer modern boilers with auxiliary equipment. Presently it is not the case.

The adoption of laws on wastes would change the attitude of many wood processing companies and force them take more care about the wood wastes they make. Adoption of a rulebook on the upper limits of gas emission from small and medium boilers, and strict application of penalties for not meeting the limits would, in many cases, lead to considerations of other options, for example, using wood wastes and providing new boilers. Improving the awareness of municipal management related to utilization of local resources would most likely change their attitude towards using biomass wastes.

However, the most powerful mechanism for a change of attitude is price. With the regulation of different fuel prices, by adding a tax or by tax exemption, some fuels and wastes can be favored or disadvantaged.

Another very important issue indirectly related to the attitude of prospective consumers is the necessity of adopting standards regarding wood pellet quality. Without standards prescribing the main technical parameters of wood pellets, including stability in shape, standard dimensions, and heating value, and without parameters regarding the chemical composition of wood pellets, wood pellets could be found dangerous during combustion. This condition would discourage many consumers from using pellets.

Note: This text is an excerpt from the document-guide for investors Feasibility Study on Waste Wood Utilization in Serbia.

The project is implemented with the support of the USAID Serbia Competitiveness Project.

ALSO READ THE TEXT ABOUT PRIMARY BIOMASS RESOURCE ANALYSIS

USAID Srbija Projekat za razvoj konkurentnosti Beograd

JP Srbijašume Beograd

JP Vojvodinašume Petrovaradin

Feasibility Study on Wood Waste Utilization in Serbia

Djerdap

biomass

biogas

pellet

Spatial Plan of the Republic of Serbia

wood waste

cellulose

cut wood

timber

briquet

Law on Waste

Law on Forests

Kyoto Protocol