Biomass wood pellets – an increasingly popular fuel for heating -will soon be traded on the public markets like other commodities such as wheat, gold and crude oil.
The APX-Endex energy exchange in the Netherlands and the Port of Rotterdam, intend to launch the first exchange-traded wood fuel product by the end of the year, according to Reuters.
The exchange is currently working to develop standardized contracts and specifications, and aims to have 8 to 10 trading members at launch time.
Due to tougher carbon rules and higher energy prices, Europe is the hottest market for wood pellets, and the quoted price would be based on delivery in Rotterdam. APX-Endex said the port handles about 15% of the global wood pellet production, which is between 8 and 10 million tons annually.
Last year, a Swedish company began building the world’s largest wood-pellet factory in Georgia (US) for exports to Europe.
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