Emission certificates thanks to residual wood in Brazil

MIL Energia Renovável’s 9-megawatt power plant, which has been fully owned by MIL Madeiras since May 2021, supplied in the past around 70 % of the households of the neighbouring city of Itacoatiara with electricity. The power plant also supplies the production site of PW Amazon with about 2 MW. All of the power plant’s electricity (heat for wood seasoning and electrical energy) is generated from the residual wood of the PW Amazon sawmill, i.e., renewable biomass. The company has been fully consolidated since 1 June 2021.

Itacoatiara has been connected to the regional electricity grid since March 2023. For MIL Energia, this means that electricity deliveries to other contractual partners are now crucial in addition to our own consumption. As the current electricity price in Brazil has fallen to an all-time low due to the availability of hydropower plants, we have been producing less electricity since March 2023 and selling the biomass we do not need to third-party customers. The biomass sales allow us to offset the losses from electricity sales that can no longer be realised. However, sales and earnings are expected to continue to decline as long as national electricity prices remain at a low level. As the availability of hydropower in Brazil is volatile, we can expect higher but also highly variable electricity prices in the future.

MIL Energia not only produces electricity and steam or heat. Our activities resulted in a total of 19 730 tons of CO₂ equivalents in 2023, which can be counted towards carbon reduction and thus contribute to global climate protection. The project ended after the maximum term of 21 years in October 2023. A new project for emission certificates at MIL Energia is not possible, as there are no longer any corresponding certification schemes available due to the changed initial situation after the grid connection. Due to a change in the methodology for biomass power plants before the end of the project, the certificates produced in 2021, 2022 and 2023 will not be marketed until 2025.

The biomass power plant in Itacoatiara remains very important for Precious Woods: firstly, from an operational perspective because this results in cheaper electricity and heat procurement costs; secondly due to the opportunity to sell residual wood from timber harvesting and as a by-product of the sawmill; and thirdly because complete utilization of the harvested wood makes an important contribution to avoiding CO₂ emissions and can therefore replace heat and power generation using fossil fuels.