Bio-coal for Marathon? Toronto wood pellet maker eyes former pulp mill.

• Author: Ross, Ian
• Position: FORESTRY

A Toronto biofuel company has innovative plans to use Northern Ontario woody biomass to make a specialty pellet that European power producers may be eager to snap up.

Protocol Biomass wants to set up shop at the former Marathon Pulp mill site and install a roasting process to make torre-fied wood pellets that are growing in global popularity as a coal substitute.

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"We believe we are creating a bonafide coal replacement," said Tom Logan, president of Protocol Energy, a privately held parent company with a regional subsidiary aimed at establishing the so-called 'black' pellet plant on the north shore of Lake Superior.

His business plan for the $100-million project has been making the rounds in the Toronto capital market. But the company and the Town of Marathon kept it under wraps for a year. They only decided to go public this winter in an attempt to prod Queen's Park into speeding up the government's competitive wood supply competition.

Besides creating a pellet-making operation, the company proposes converting biomass into energy by firing a 17-megawatt co-generation unit at the mill site to provide heat and power to the plant and the town centre with a district heating grid connecting the hospital, municipal offices, a shopping mall and other commercial users.

"While we make dog food, we're going to eat it ourselves," said Logan.

Besides the abundance of wood fibre in the area, a major drawing card is the closed pulp mill, which shut down in 2009 with the loss of 200 jobs.

The brownfield site has since undergone considerable environmental cleanup. While forestry giant Tembec and the Ministry of Environment negotiate a settlement agreement, a court-appointed receiver is working with the town's economic development department to find a new buyer for the property.

Logan wants to have the land and the mill assets in his possession by March. He likes the deep water dock and nearby rail access.

"From an outbound logistics perspective, it's a very excellent location."

He's eyeballing potential customers at Ontario Power Generation, power producers in the U.S. Midwest, and especially Europe, where pellets are co-fired at dedicated biomass and coal plants.

"We would like to think we can build a product that they would want."

It's always been tricky economics to ship pellets overseas, but torrefied pellets can be sold at a higher price than conventional 'white' pellets.

The Marathon operation's size would be scalable depending...