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B.C. company signs major deal to export wood pellets to Japan, won’t start until 2023

The B.C. government announced a deal that it hopes will provide a boost to the province's forest industry.
The B.C. government announced a deal that it hopes will provide a boost to the province's forest industry. The Canadian Press / Jonathan Hayward

The B.C. government says a new deal with a Japanese company will provide significant help to the province’s struggling forestry sector, but it won’t kick in until 2023.

Premier John Horgan announced a long-term export contract between Pinnacle Renewable Energy and Mitsui & Co Ltd. to ship 100,000 tonnes of industrial wood pellets to Japan annually to fuel Mitsui’s new biomass power generation plant.

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The province describes the investment as “significant” without providing any specifics on how much money will end up in provincial coffers.

“Long-term prosperity for forest workers and forest communities means finding new markets and getting more value from forest products,” Horgan said.

“Pinnacle is creating a new export opportunity that will generate good jobs in B.C. communities, while transforming wood waste into industrial pellets to provide Japan with clean, renewable electricity. It’s a win-win.”

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The pellets will be produced with B.C. wood that is otherwise unusable. Pinnacle is Japan’s largest supplier of industrial wood pellets and the third-largest supplier in the world.

The province is hoping the announcement will boost Pinnacle’s manufacturing facilities in Quesnel, Williams Lake, Houston, Hixon, Armstrong, Lavinton and Burns Lake as well as the export facilities in Prince Rupert and Vancouver.

“We are very pleased to be furthering our company growth, while supporting the B.C. economy through our growing exports of industrial wood pellets to Asia,” Pinnacle Renewable Energy CEO Robert McCurdy said.

“Our growing relationship with the international community and Japan’s commitment to decarbonization continues to have a positive impact right here at home in our B.C. communities.”

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The provincial government has been criticized for not doing enough to support the struggling forestry industry.

The provincial government announced $69 million to establish an early-retirement bridging program for older forest workers and to create a new short-term forest employment program focused on fire prevention, community resiliency projects, and access to skills training.

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In September, Forests Minister Doug Donaldson said there have been four permanent mill closures in B.C.’s Interior, affecting between 500 to 700 workers.

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The province is also dealing with 13 indefinite closures affecting around 1,000 workers. When the curtailments are added in, Donaldson says a total of around 3,000 workers could benefit from the province’s funding.

At the time of the announcement BC Liberal critic John Rustad said the government was far too slow, and workers have been directly impacted because of it.

“This could have been done months ago. We sent a letter months ago. Part of that is the federal government stepping in. I don’t get why they are so slow to respond,” he said.

Donaldson says B.C.’s forestry industry has been affected by a number of issues.

“The end of the mountain pine beetle harvest and low lumber prices, and the ongoing Canada/U.S. trade dispute are creating real uncertainty in many interior communities,” he said.

“But the value of wood pellet exports continues to grow, and I believe that as forest companies and communities come together to map out their futures, value-added wood products like mass timber and industrial wood pellets will become more important.”