By Martin Clark
Active Energy Group (AEG) is a London-quoted biomass-based renewable energy business listed on AIM, but with a major focus on North America and other international markets .It has a history of involvement in forest management but now focuses on two trademarked products — CoalSwitch and PeatSwitch — that convert woody or peaty biomass into pellets that can replace coal in existing power stations with minimal changes.
The last time we covered the company was in May 2021, and progress at that time was slow going.Share prices have languished in recent months after a small bounce in early 2021, but have never really recovered from the heady days of 2018. But this month there was a bit more to shout about after the company announced that it had achieved Chain of Custody (CoC) and Controlled Wood certification compliant status with the Forest Stewardship Council (FSC) standards for its CoalSwitch fuel.
The FSC certification is the basic market prerequisite to permit biomass products to be sold into many of AEG’s target markets. In a 15 March 2022 statement, it noted that certification to FSC represents a “significant milestone” and allows the company to engage with a wider range of prospective customers. While not a legislative requirement in many jurisdictions, a number of its prospective customers have indicated that FSC certification will support their corporate Environmental, Social and Governance (ESG) agendas, enhancing the prospect of future orders.
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“We are delighted to have received certification to FSC, following an audit by an accredited third-party certification body, SCS Global Services, of our current and forthcoming operations, from the sourcing of our waste residuals, through to the final production of the CoalSwitch biomass fuel,” said Michael Rowan, AEG’s chief executive. “Not only does this certification confirm to our prospective customers that protection of the environment is at the heart of our operations, the FSC certification guarantees that CoalSwitch is produced from responsibly managed sources.”
Rowan said this opens up new sales opportunities in other key markets, including Asia.“Japan is a key target market for new generation biomass fuels,” he said. “Active Energy has been delivering samples of CoalSwitch to potential customers who regard FSC as a major pre-requisite for future sales contracts
.”The process of attaining certification included rigorous audits to examine the full CoalSwitch production process, encompassing the entire supply chain — from feedstock source to final production of fuel.AEG’s certification to FSC standards confirms that its production will use forest-based materials from responsible sources and that its suppliers have committed to the strictest standards currently governing forest management.
On a practical level, it will mean gearing up pellet production in order to meet demand from clients.”We look forward to updating shareholders further as we continue to progress on the development of our Ashland production facility in Maine,” added Rowan. “We are looking forward to beginning to produce significant volumes of CoalSwitch to meet the indicative international demand we are seeing.”
Earlier this year, the company also revealed the results of its first phase independent combustion testing programme conducted on CoalSwitch fuel in Utah, which it said demonstrated the superior quality of the fuel over existing biomass fuels.It reported that CoalSwitch had an increased heating value of 9,313 British Thermal Units per pound (BTU/lb), which represents a 12.9 per cent premium to the traditional white pellets currently being produced for the biomass market.The trials also reported significant reductions in key emissions compared to coal.
According to Rowan, the tests highlight CoalSwitch’s superior qualities over white pellets.He believes the product now offers a new pathway for heavy, hard-to-decarbonise industries in the USA, which are increasingly pressured to reduce emissions and pollution. “CoalSwitch provides a unique ability to achieve these goals without requiring costly, complex and yet-to-be-proven mitigation technologies like carbon capture.
It would allow customers to ‘drop-in’ our CoalSwitch fuel and see immediate and meaningful reductions in emissions and air pollution.”The test results will add momentum to ongoing discussions with prospective long-term buyers both in North America and worldwide, which bodes well for the future. At what point these prospects will bear real fruit for investors however remains to be seen.
