AMSTERDAM (Reuters) - Europe's first exchange for trading wood pellets, used to replace coal in electricity generation, will be launched on November 3 in the port of Rotterdam, Anglo-Dutch exchange APX Endex said in a statement.
The global market of wood pellets is growing as a result of world-wide policies to cut CO2 emissions and replace fossil fuels with renewable sources of energy.
The biomass exchange is joint project of Anglo-Dutch power and gas exchange APX-Endex and Europe's biggest port, agreed in 2010.
Currently, the global wood pellet market is estimated at 10 million tonnes and it could grow sixfold by 2020.
"In the port area itself, we foresee a market of two to three million tonnes in 2025. Outside Rotterdam, demand will be many times larger," said Hans Smits, Rotterdam Port chief executive.
The Netherlands, Germany, Scandinavia, and Belgium are among the biggest consumers of wood pellets in Europe, with the bulk of the Dutch intake used in Essent's Amer coal-fired plant.
"Contracts offered for trading include three months contracts, three quarters and three calendars," APX Endex said in the statement.
It said that by 2012 "clearing services for wood pellets contracts will be developed and implemented, providing further financial security to market participants."
(Reporting By Ivana Sekularac; editing by James Jukwey)