Weyerhaeuser Co. (WY) and Mitsubishi Corp. (MSBHY) signed a Strategic Memorandum of Understanding (MOU) to explore the possibilities of collaborating in the biomass-to-energy business.
Bio-pellets are a renewable and carbon-neutral fuel made from biomass, which can include forest by-products. The biomass is compressed and molded into small, cylindrical pellets. Co-firing bio-pellets with thermal coal has proved effective in reducing greenhouse gas emissions at coal-fired power plants.
The companies are specifically interested in assessing the feasibility of jointly investing in and operating a commercial-scale bio-pellet production facility in the United States by 2011. Depending on the success of the joint feasibility study, more facilities could follow. The bio-pellets will be produced using wood based biomass from U.S. forest resources or by-products. These bio-pellets will then be sold to utilities and industrial users for energy production.
The MOU brings together two industry leaders and leverages the strengths of Weyerhaeuser’s capacity to produce renewable biomass on a large scale from its sustainably managed forests and Mitsubishi’s worldwide network and experience in the energy sector and bio-pellet manufacturing business.
New opportunities together with strict cost control will add to Weyerhaeuser profitability in future. Weyerhaeuser is eliminating several underperforming facilities and reducing cost. In addition to several closures undertaken in the recent past, the company announced that it is reviewing a range of alternatives for its fine paper business, which includes continuing or holding the business for a possible sale in the future.
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