Bord na Móna abandons plans for €60m wood pellet factory in US

State energy company Bord na Móna has dropped plans to spend €60 million building a wood pellet factory in the US.

The news comes as the company prepares to announce plans designed to safeguard 2,100 jobs in the midlands by supplying fuel to power plants.

Last year, Bord na Móna said it wanted to spend €60 million building a factory in the US state of Georgia that would turn willow trees into pellets to be exported to the Republic as fuel for electricity generators.

It is understood that Bord na Móna has decided not to go ahead with this plan, as it has enough sources of biofuels closer to home in both Ireland and Europe.

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The State company is likely to confirm that it will not go ahead with the proposal on Wednesday, when it will announce plans to develop its biomass business, part of its strategy to move from peat production while preserving jobs.

Burn peat

Bord na Móna is in talks with fellow State energy company, ESB, to supply it with biomass to fuel the latter's two power plants in Lough Ree and west Offaly.

Both currently burn peat, supplied by Bord na Móna, but must convert to a mix of both that fuel and biomass, basically wood or plants, by the end of next year.

Bord na Móna's own power plant in Edenderry, Co Kildare, burns both peat and biomass.

The company will confirm on Tuesday that it can supply enough biomass to fuel its own generator and the ESB power stations.

The group believes that successfully converting both ESB plants to a mix of peat and biomass is critical to its continuing to employ 2,100 people, mostly in the midlands.

Future sourcing

Bord na Móna recently assessed its future sourcing and supply of peat and biomass for the two plants.

It intends using a mix of Irish and imported biomass. As demand rises, the local contribution will fall at first, but Bord na Móna believes that this will increase over time.

While it is understood that the Government was prepared to back Bord na Móna’s plan to build a facility in the US, the company itself decided against the move.