Croatia to terminate biomass supply agreements

Croatian state owned company Hrvatske Šume, responsible for managing Croatian forests, is in the process of terminating biomass supply agreements. Over 20 contracts signed during 2010-2016 for a period of 14-15 years will be terminated. Contracts refer to an annual supply of 265 thousand tonnes of wood biomass (3.7 million tonnes overall) and are estimated to be worth around €140 million. These contracts are considered by many to be counterproductive, somewhat ill-defined and potentially disadvantageous for Hrvatske Šume. For instance, they do not condition the obligatory offtake of biomass, nor do they prohibit the resale of the commodity.

According to Eurostat, during the last 10 years, wood biomass prices rose from 26 €/t to over 46 €/t. It remains to be seen how this surge of prices will be reflected in new supply agreements.

Source: Poslovni