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Chilean Pellet Fuel Production Line sucessfully commissioning

 Chilean Pellet Fuel Production Line sucessfully commissioning

The Chilean market has been struggling with the fact that the domestic market is very small. Chile is a very large user of firewood for heating (which causes large environmental problems in the winter). A wood pellet stove would be able to provide cleaner heat, but as (high-quality) stoves are expensive, and no subsidies are available either for stoves or for pellets, it is hard to compete with firewood. In recent years stoves from Rika and KWW have been slowly entering the market, but total volumes are still small. The current volumes are also too small for any meaningful export. Some minor amounts have been exported to Korea in the past, but in containers, which is very inefficient. Also, as Chile is facing the Pacific, and transport distances to the European markets are large, this makes export economics unfavorable. The long term potential for wood pellet production in Chile is large: the country produces about 40 million cubic meters of industrial round wood, and an additional 16 million cubic meters of firewood, so the sawdust and shaving potential is in theory large. However, these residues are currently utilized to a large extent to produce electricity and heat (as electricity prices are amongst the highest in Latin America). Also, most of the forest assets are owned by the pulp and paper industry which are not enthusiastic about the opportunities to produce pellets yet prefer producing electricity. 

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