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President, Green Circle Bio
Fuel Producer, Panama City, Florida
The pulp and paper industry has shrunk over the past decade due to global competition and domestic consolidation. With the traditional forest products industries in retreat, the bioenergy industry is positioned to fill the void, stepping in to use the raw woody materials and manpower. Industry estimates indicate that bioenergy power generation requires four to six people per one megawatt of electricity.
At first blush, Olaf Roed's entrée into the renewable energy sector defies logic: Norwegian ocean shipping line CEO builds the world's largest wood pellet manufacturing plant in Florida. But to Roed (pronounced ROH-ed), starting Green Circle Bio makes complete sense.
First and foremost, Roed and the other Green Circle Bio owners are entrepreneurs. They saw a market in need of a greener product. With the European Union signed on to the Kyoto Protocol to reduce its global warming emissions, Roed and his partners knew that the electric power industry, Europe's largest global warming sector, would have to find cleaner fuel sources to increase electricity production and reduce pollution at the same time.
Roed and his partners noticed over the last 20 years that more homeowners in Europe and the Northeast United States have been burning biomass -- wood and other organic material -- instead of natural gas or oil to heat their homes. The Green Circle Bio owners also learned that most pulp and paper mills burn wood waste to power their operations. Power companies can displace a percentage of their coal emissions that cause global warming by burning wood pellets with coal in power plants. Typically a plant can replace up to 20 percent of its coal fuel with biomass with little or no equipment retrofits.
"The beauty of the wood pellets is that it can substitute the coal," explained Roed, 53. The technology behind most coal-fired power plants is such that "you can easily mix in biomass materials from wood pellets in with the coal without having to seriously modify the [power] plant."
Roed established Green Circle Bio two years ago, and the company now employs 50 people. The plant, located in the panhandle town of Cottondale, will produce 560,000 tons of pellets annually for the European market.
Roed and his partners chose Florida because it gave them access to raw materials and a deep water port. Though Green Circle Bio sells all of its pellets overseas for now, Roed is confident that a biomass market will soon open up in the United States.
"In Europe we've seen a big growth in the industrial need for pellets based on the Kyoto Protocol and the need for reduced emissions," said Roed. "In the U.S., the hope is that there will be a cap-and-trade system on emissions as well and…incentives to reduce the use of coal and increase the use of biomass in power production."
The Florida wood market was ripe for Green Circle Bio to step in given that major pulp companies in the region have reduced their presence there. "We see that paper consumption in the U.S. is flattening out and scheduled to decline," said Roed. "And there's more use of recycled paper."
Green Circle Bio can also use the less desirable wood that regional lumber operations do not want. "Since the saw mills can only use the good stuff in the middle of the larger dimension trees, we can use the residues and the leftover," Roed explained.
Though the company may use as much as a million tons of wood in a year, he points out that the amount is less than what a typical pulp mill would use. Roed adds that "the forest needs to be cultivated and thinned to grow larger trees. And we can use the thinnings."
Roed predicts that biomass will play a significant role in fighting global warming. "It is the renewable that can make the biggest difference in the short term," he said. "The technology and raw material is here and now."