Opportunities and Barriers to Wood Pellet Trade in the Philippines

Abstract

A survey was conducted to determine the current perception of market players on opportunities and barriers to the use and commercialization of wood pellets in the Philippines. Power generating companies and processing plants using coal to generate heat and electricity were selected as respondents in this study. Policy makers, NGOs and experts from academia were also included in the survey. Questionnaires on economic, technical, logistics and ecological barriers were formulated and asked to each respondent. Data and comments from the respondents showed that the main barriers to wood pellet commercialization in the Philippines were unreliable biomass feedstock supply, high cost of investment and competition from fossil fuel (coal). Bad roads and insufficiently developed infrastructure would hamper attempt to commercialize wood pellets in the country. Many respondents indicated that technical and logistical barriers are challenges that can be overcome. Majority of the respondents recognized the environmental benefits of using biomass but they deemed it necessary for government to provide subsidies and incentives to mitigate high investment cost and improve return on capital.