I advise you to allow the off-taker to write the letter. These are the fundamental conditions that will be set out in the agreement: as a result, it is customary for these facilities to use long-term biomass supply contracts and off-take product supply agreements that are linked to the price of biomass raw materials. Well-structured procurement contracts not only protect the project itself by a certain degree of security, but also provide protection to biomass suppliers, the production site and the facility`s customers: to ensure the greatest possible confidence in the index, the organization providing the index must be considered by all parties involved as an independent market expert. Only a neutral and independent party, which has no economic interest in biomass transactions, should be confident that it provides data that has the potential to influence all parties across the supply chain. For each production process using biomass as a primary raw material, the operating costs with the highest variability are the actual costs of that raw material. This also applies to producers of biofuels or biochemicals obtained from wood-based raw materials. Fuelled by market supply and demand, which includes fluctuations in cost factors such as diesel prices, diesel prices and IPV, the cost of raw materials can vary considerably over time. Japan is a renewable energy support market that aims for 3.7 to 4.6% biomass or 20 million Tpa in pellet equivalents, which offers Pinnacle a compelling opportunity to continue to develop in this market. The contract in South Korea is signed by GS Global Corporation (GS), a large diversified conglomerate in South Korea and the country`s largest dedicated independent biomass producer (IPP).
As part of the contract, Pinnacle will supply 100,000 tpa of industrial wood pellets to GS from 2022. It is actually easier when the field is smaller, as the sole or few customers will probably be very interested in doing business with you. While the main market players have little time for a new entrant who asks for a mail order agreement. February 4, 2019 – Skeena Sawmills Ltd. and Pacific BioEnergy Corporation (PacBio) have entered into a long-term takeover agreement for wood pellets. As part of the agreement, PacBio will purchase all pellets manufactured at Skeena Sawmills` new state-of-the-art pellet plant to support PacBio`s long-term delivery agreements with power generators in Japan. Indexing raw material prices for biomass is the most accurate and balanced instrument to meet the needs of all parties involved.