Graanul - comment
The FT reports that the Japanese government is reducing subsidies for the biomass sector, framing the development negatively as a cut to support for new biomass plants. Despite this, Japan remains a major and expanding import market for wood pellets, with demand largely driven by biomass power generation. While feed-in tariff subsidies for wood pellets, which previously supported rapid capacity growth, are being scaled back, particularly for new large-scale projects, long-term pellet demand in Japan is still expected to increase. These policy changes are likely to moderate the pace of growth rather than reverse it, leaving a sizeable biomass sector intact.
We view the development as only marginally negative for Graanul, with any redirection of pellet supply from Japan to markets such as Europe likely to have a limited impact.