July 7, 2011 / 3:16 PM / in 6 years

UK company targets African waste wood for fuel

LONDON (Reuters) - A UK company says waste wood projects in Africa could benefit from binding European targets to deploy renewable energy, and aims to raise 30 million euros for wood chipping facilities across West Africa.

<p>A boy works in front of a stack of firewood arranged along a road in Nigeria's northern city of Katsina May 7,2010. REUTERS/Akintunde Akinleye</p>

EU countries collectively have to get a fifth of their energy from renewable sources by 2020 compared with about a tenth now, in a binding target meant to combat climate change and improve security of energy supply.

Some power plants are responding with plans to burn wood pellets and chips -- also called biomass -- instead of coal, including Britain’s biggest coal burner, Drax, and the UK arm of German utility RWE.

UK-based Africa Renewables Limited has signed an agreement with SIFCA, an African agribusiness group, to process and transport wood chips made from rubber trees which have reached the end of their useful life at estates in Ghana.

The company is trying to raise funds to develop a chipping facility there and further afield in West Africa, targeting markets in Britain, Italy and Scandinavia, the company’s Sonia Medina told Reuters on Thursday.

The biomass wood fuel market is still at an early stage with little visibility on pricing, she added.

The wood fuel market is related to long established paper and construction sectors, but distinct because it is less selective in terms of tree species. Pulp and paper for example rely on pine and eucalyptus.

African biomass would have to compete with timber resources in Canada, the United States, Russia and Scandinavia, but growing demand for wood fuel would drive opportunities in the sector, said Medina.

Spent rubber plantations may be a useful resource from a sustainability perspective, she added, given concern among green groups that new wood fuel demand will drive deforestation.

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