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Norway's Arbaflame, trader Terval eye term pellet deal

Norwegian biotechnology firm Arbaflame has signed a five-year offtake agreement for 200,000t of steam-cracked wood pellets with Belgium-based commodity trading firm Terval, Arbaflame told Argus.

Arbaflame will begin delivering its Arbacore pellets to Terval in the second quarter, with an option to extend the deal by one year at the end of the current five-year contract period. Arbaflame will initially deliver 40,000 t/yr of pellets produced at its full-scale commercial plant Arba One in Kongsvinger, Norway.

Arba One produced 30,000t in 2023, with capacity expected to ramp up to 45,000 t/yr this year and reach nameplate capacity of 70,000 t/yr in 2025. The plant only uses fully certified sawdust as feedstock to produce pellets that carry many of the properties of coal, including being water-repellent, which makes it easier to transport, store and handle. And Arbacore pellets have higher calorific value compared with widely used white pellets. Arbacore pellets have been tested at 14 power plants operated by nine different utilities in Europe, Japan, the US and Canada, according to Arbaflame.

A ship filled with wood pellets

Terval plans to sell pellets acquired from Arbaflame to both manufacturing firms and power and heat generators in France, Germany and the Benelux region, Arbaflame said.

"We have already verified the use of Arbaflame's solution in full-scale industrial trials with our customers, and this agreement will enable us to offer our end-customers a renewable drop-in alternative to hard-to-abate fossil fuels," Terval managing partner Hakim Hennen said.

The deal "confirms that Arbaflame's solution has a large market and can help industry players take action to deliver on their decarbonisation ambitions", Arbaflame chief executive Steve Paulsen said.

Arba One has a bio-refinery arm, which is currently in a research and development stage. The bio-refinery produces crude furfural out of condensate released by the pellet production process, Arbaflame said. The firm is also producing bio-methanol and methane from the condensate, both of which are used as internal process fuel. Arbaflame plans to complete the commercialisation of its existing products and continue to research and develop additional biochemical products "together with our partners", it said.

Arbaflame is actively searching for new locations and raising capital to start constructing 1-2 new plants.


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