The State of the Pellet Industry: An Interview With Tim Portz
The State of the Pellet Industry: An Interview With Tim Portz
Featuring Tim Portz
With Kyle Titsworth
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Kyle Titsworth
I’m here today with Tim Portz from the Pellet Fuels Institute (PFI). Thanks for joining me today, Tim.
Tim Portz
Thrilled to be here, Kyle. Thanks for having me.
KT
We met at HPBA back in 2025 this year, and then I had the opportunity to join you at the Pellet Fuels Institute Conference in West Virginia. You had me join a roundtable for dealers, which I really appreciated. I learned a lot. Can you tell us a little bit about yourself, your background, your current role at PFI, and how you got involved with the organization?
TP
I’ve been involved in clean energy since about 2010, and I came into the space as a trade journalist. Writing is my background—that’s what brought me into this industry. I started out as a reporter for a publication called Biomass Magazine. That publication is still in operation and still relied upon by biomass industry professionals across the country as a source of news and information.
Biomass Magazine covered a lot of different biomass-to-energy technologies. I covered biofuels, biogas generation, and wood pellet manufacturing and use. For the better part of seven or eight years, that was my relationship to the space—covering the industry. In 2012, the industrial pellet industry really got up and running, and I covered that extensively for three years. Candidly, I didn’t spend a lot of time reporting about the heating pellet sector in the United States during that period. But another part of my job was conference organizing for the same company that owns and operates Biomass Magazine. Every year I would have an association roundtable where I’d talk to various association heads about their industries. That’s really where most of my understanding of the domestic wood pellet market came from. At the time, the executive director of PFI was a woman named Jennifer Hedrick, and I’d been on stage with Jennifer a number of times and really got to understand how the domestic market works.
In 2018, I was approached by PFI to pick up the ball as Jennifer had moved on to different opportunities, and I’ve been representing the domestic wood pellet sector since then. I tell people that I thought, as a trade journalist, people were candid and shared with me how their businesses operated. Then I became the executive director of a trade association and realized there was another level of information people were willing to share once I was advocating on their behalf. My understanding of the wood pellet business—specifically the domestic side—has just grown exponentially since I took over as executive director. That brings us more or less up to now. I’ve been acting as the executive director since 2018. I don’t know if that makes me the longest-serving executive director of PFI—probably someone could dig into the archives and sort that out—but I feel like I have a pretty good chance of being that guy.
KT
Well, that’s awesome. They’re lucky to have you. I noticed how well your questions were written and how well you commanded the stage at the conference.
This interview is brought to you by HPBA.
TP
I appreciate that. I think that comes with some experience and a bit of command of the material too. I’ve been on stage when I didn’t know a lot. I hate to say that, but there’s a first time for everybody. When I started covering these varying sectors, I really didn’t have a lot of depth relative to the policy instruments that were so important to these different industries. I thought the technology was even a bit beyond my grasp. But as I’ve written about it, interviewed people, learned, and been to a lot of different facilities over the course of my tenure—including wood pellet manufacturing sites—you develop some fluency and understanding. I owe a lot of that to my members and the people over the course of my career who have welcomed me into their operations and shared the truth of what they’re up to, how it works, where their challenges are, what markets they serve, and what policies are important. That fluency really helps me on stage as I direct the conversation and ask questions that I think are compelling or interesting. Still learning, though.
KT
We’re all still learning. You’ve got to get thrown into it to learn. You just spoke about policy, and the retailers, distributors, and manufacturers reading this interview are all facing a lot of policy challenges, both at the state level and in Washington. Can you speak to the policy issues that PFI is facing and how they might relate to HPBA and its members?
TP
Absolutely. In many instances, the Pellet Fuels Institute and HPBA are riding on the same rails toward varying policy and regulatory ambitions and goals. I’ll start with a recent loss: the appliance tax credit within 25C. If you read The Pellet Wire or HPBA newsletters regularly, then you knew that the tax credit for qualifying wood and wood pellet appliances was at risk. This was a tax credit that various entities and organizations have been pushing for a long time. It first came to pass in the first Trump presidency with the COVID Relief Act. We enjoyed a three-year tax credit at that time at 30%, and that was considered a huge victory. The tax credit was extended and lengthened in the Inflation Reduction Act, which was signed into law by President Biden and gave us a longer runway of 10 years.
There were some challenges with the tax credit. It wasn’t available to businesses. There was a cap on it, which sort of blunted the impact if you were going to do a whole-home boiler or something like that. But largely, for the most part, for the types of appliances that are sold at your operation, Kyle, the tax credit was viewed as a very good thing.
With the 119th Congress coming into being in January and looking at budget reconciliation, we really thought those tax credits included in the Inflation Reduction Act might end up on the chopping block, identified as pay-fors for some of the tax cuts the administration was interested in bringing back and making permanent. It looks like that’s exactly what happened. HR1, the Big Beautiful Bill Act that the president signed into law on the 4th of July weekend, eliminates our tax credit as well as all the tax credits covered in 25C and a whole host of other tax credits. They’ll expire at the end of this year.
So that’s a loss. It was an interesting topic for us on stage when we were together at the Greenbrier, and I think Jim Beck from HHT said it best: We sold appliances before the tax credit, and we’ll sell appliances after the tax credit. But you hate to give up ground from a policy perspective.
To place it in some context, it’s important to understand that some of the technologies we compete with for space heating market share also had tax credits that were taken away. I’m looking at heat pumps specifically. The data around who claimed the tax credits and which technologies people purchased with them isn’t very complete, but there was some pretty good data from 2023. Wood and wood pellet appliances—somewhere in the vicinity of 50,000 tax credits were claimed that tax year. About five times as many tax credits were claimed for heat pumps, and similar numbers for high-efficiency furnaces. So we certainly took some wind out of our sails, but that same wind just came out of the sails of the competing technologies as well.
The other thing—and this has been an ongoing refrain for me personally—is that HPBA, PFI, and others have to keep an eye on this anti-combustion bias that’s out there in the regulatory community. I think anytime consumer choice is limited—whether at the state or federal level—we need to be wary. For example, some jurisdictions won’t allow new subdivisions to have natural gas lines. Now, as someone who represents pellet interests, you might say, ’Wait a second, Tim. Wouldn’t blocking natural gas create more opportunity for wood pellets?’ I think overwhelmingly the answer is no. Most people would look at an inability to put natural gas in as curtailing combustion of any kind, and of course, our technology requires combustion to work. We’re very wary of that. We’re trying to expand our reach from the federal level all the way down to the state level because that feels like where this battle is being waged now.
After being in this chair since 2018, I would say that whether it’s a Democratic-controlled Congress or a Republican-controlled Congress, there are opportunities to make hay. While we might not have gotten the tax credit outcome we were looking for, I think the Trump administration’s deregulatory posture is probably something we need to be looking at and leveraging to protect consumers’ right to choose what fuels they want to utilize to heat their homes. Those are probably two big ones—playing some offense on tax credits (which didn’t go our way in the long run), and then playing some defense as well (by protecting consumers’ right to combust a fuel inside their homes to produce space heat).
KT
I resonate with you on the multiple levels of government taking some of these rights away from consumers. We’re looking at the federal level, state level, and then, especially in Massachusetts, we’re looking at even the municipal level, where certain towns are banning either gas or combustion. It’s confusing—it’s through building codes or through local laws. It’s hard to stay on top of, and I appreciate that you guys are out there.
TP
Absolutely. It’s paramount. The other thing I find myself thinking about a lot, Kyle, is a law of unintended consequences. I’ve been on a number of phone calls with what I would call the anti-combustion community, and I believe their intentions are rooted in this idea that somehow combustion is bad for the environment. I think it’s going to be difficult to disabuse them of that thinking. I’ve found it’s very difficult to move people off of a position they hold and defend.
What I do want people to consider, however, is this: By driving folks away from combustion toward electrification—overwhelmingly heat via heat pumps—you’re burdening an already overloaded grid and asking more of it. You’re sort of putting all of your energy-need eggs in one basket. Americans are rightly reluctant to do that. They realize that if the power goes out, they’re really stuck.
Now I realize that pellet appliances require a certain amount of electricity to drive the augers. But certainly cordwood stoves—if I was in an energy-constrained environment and I had a cordwood stove in my home, I would be very reluctant to give it up. Because if everything goes south and I don’t have access to power or there are brownouts or blackouts, I know I can still generate BTUs for my home and keep myself and my family warm. And with battery backup, I can do the same thing with a pellet appliance.
I think we’ve got to be careful and thoughtful about how many different things we’re asking our electrical grid to handle. With the rise of AI, there’s a processor ready to gobble up electrons as quickly as we can bring them online. I wonder how long it will be before prices start to reflect that increasing demand. I think we have to maintain a diversity of options for people to heat their homes.
Wood pellets are in less than 1% of American homes. Nevertheless, in those markets where wood pellets make sense and they’re available—and heating oil or natural gas lines aren’t ubiquitous like they are here in the upper Midwest—wood pellets are essential. Everyone in organized municipalities here has access to natural gas, so wood pellets are more of a rural phenomenon in this part of the world. But I really think we have to have all our options on the table. We feel good about how wood pellets are manufactured; we feel good about their carbon story; we feel good about their low emissions characteristics. We’re here to defend consumers’ right to choose our fuel product.
KT
Absolutely. We’re finding that customers who have all-electric homes are coming in. I tend to agree with you that the anti-combustion mindset will be detrimental to combustion-related product sales. However, we are seeing upticks in all-electric houses. To echo your point about how stressed the grid is, we had a big storm come through Massachusetts on 4th of July weekend, and a lot of homes were out of power for over 48 hours. Thankfully, we’re not heating at this time of year, but we’ve also had times where electricity costs spike dramatically during peak demand. I had two ACs running while I was at work to keep my dog comfortable, so I’m bracing for the bill.
TP
Well, that dog deserves to be comfortable, but that can suddenly become a very expensive proposition.
KT
Absolutely. Can you speak to how the clean energy community views biomass and wood pellets specifically?
TP
Industry insiders—biomass energy professionals—will often refer to themselves as sort of the redheaded stepchild of clean energy. I think that’s because of combustion. You look at wind and solar, and if you just see a wind turbine turning in rural Iowa, where I’m from, it’s easy to identify that as clean. There are no emissions coming from that site. Same thing with solar—you see a PV panel on someone’s roof, there are no emissions, there’s no noise. It’s just passively converting solar energy into electrons.
But of course, the supply chain for both wind blades and solar panels doesn’t end at that roof or in that cornfield in Iowa. There’s this entire supply chain that feeds it. In the instance of photovoltaic, there are rare earth minerals, and those have to be mined and harvested, to say nothing of the intermittency of those power sources. The grid does not like intermittency. The grid likes always-on, very stable, predictable electrons flowing into the system. We have to have backups, and those backups are often fossil fuels.
I feel like because biomass does involve combustion—if you went into someone’s home that was burning wood pellets, yes, there are emissions associated with that. But I actually think it’s our supply chain that’s quite compelling. When we go to Washington, D.C. and educate policymakers about wood pellets and why they’re a benefit, we point to our supply chain. We’re proud of the supply chain. We’re proud of the fact that this country is brimming with wood fiber and throws off wood fiber residues from all different industries—sawmills and secondary wood product manufacturing sites.
I don’t think many people understand that when you convert a round tree trunk into square dimensional lumber, you’re going to have waste materials. I’m proud that the Pellet Fuels Institute members and the whole sector stands ready to not only take those materials but pay for those materials. We inject real revenues into the broader wood products category for what might have otherwise been considered a waste stream.
Before wood pellet manufacturing came along, one of the things wood product manufacturers had to sort out was where they took their wood chips and sawdust. Sometimes, there wasn’t a local buyer. Now, there’s a home for all of these, and it adds money back into the greater wood product system.
This is one of the things that PFI gets up to—we remind policymakers, we remind federal agencies, we remind state agencies of the good work we do to capture the energy value in these residual wood waste streams. We’re not going to stop talking about it. I invite people to go look at a wood pellet facility before they besmirch it—before they decide that somehow we’re denuding all these forests all over the country. Go to a wood pellet manufacturing site. See what rolls in. It’s truckload after truckload of chips and sawdust. We’d go broke if we were trying to convert whole trees into wood pellets. We can’t afford to pay that price for dimensional saw logs. We’ve got to be the buyers for the residuals. I think it’s a lack of understanding, and that’s what trade associations are in place for. That’s what PFI is here for—to help educate.
KT
That’s an important point for sure. As we wrap up here, what do you see as the main challenges for pellet manufacturers, and how can retailers help address those?
TP
A couple of things. First and foremost, if you’re not involved in state or federal advocacy right now as a retailer, I’d encourage you to ask yourself why. Why not get involved in some way, shape, or form? I know the regional HPBA affiliates are very active at the state level. The larger organization is very active at the federal level, and certainly PFI is active at the federal level. We’re working to get more involved at the state level with our modest resources. But ask yourself that question: Why am I not advocating more?
What you’ll learn when you dig in is that there are absolutely interests that are interested in curtailing the marketplace you operate in, that are interested in telling you what you can and can’t sell, and making it more difficult to sell this technology versus that technology.
The bigger picture challenge is always who’s carrying the inventory risk. The EIA, the Energy Information Administration, has been tracking wood pellet sales in the United States since 2016. The range of annualized sales is anywhere from 2.2 million tons per year at its high watermark all the way down to just underneath 1.5 million tons. That’s quite a bit of variability—some 700,000 tons is about a 33% swing—so that’s difficult to plan for.
What happens is manufacturers have to lay in inventory in anticipation of the very coldest winter—what’s the absolute maximum demand we can have versus the minimum demand? One of the pieces of the information puzzle that’s helpful is we’ve got a little bit more visibility on inventory now—who’s holding inventory, how much inventory is out there. It certainly helps my members make production determinations.
I think the retail community and the manufacturer community are going to continue to have to communicate closely. A refrain I hear from my producers is, “It feels like buying behaviors are changing. It feels like retailers are holding less inventory.” There are some distinctions between specialty hearth shops and big-box retailers—that’s a longer conversation—but I think this is going to be an interesting question as we go forward into this heating season.
We probably exited the 2024 to 2025 heating season in a pretty strong inventory position. Producers want to continue to make product, but they also need to convert that product into cash, so they need to move it into the retail channel. That’s what the early buy programs that have been in place for so long are about—producers encouraging retailers to engage. The idea is to get as much product into consumers’ hands, in their storage spaces, and in their garages as we can, so we can buy more residuals and make sure there’s product available if mother nature delivers us a really cold winter. That’s when the second buying period starts in December and January.
The industry has really been in a spot where pellet availability has been very strong for five, six, seven years. I remind people that if a grandmother in a rural community can’t get wood pellets at the place she normally gets them, then we’ve got a pellet shortage—despite the fact that there may be pellets available down the way. It’s a very relative situation. Managing who carries the inventory burden is something retailers and producers are going to have to sort out together as we move forward.
KT
Absolutely. Well, Tim, this has been great. We need you, we need the members, and I think we need pellets to be part of the clean energy solution.
TP
We’re here.
KT
How can people find out more about PFI and stay informed about what’s happening in the industry?
TP
Go to pelletheat.org and sign up for The Pellet Wire. It comes out twice a month, and I really try to make it informative. At least once a month we’re talking about the data from the Energy Information Administration, and I think it’s arguably the best portal into what’s happening in the industry—what’s happening with production, what’s happening with sales, what’s happening with inventory positions. Once we get into the meat of the heating season, we start talking about heating degree days too—what parts of the country are cold, what parts aren’t. We do some freezing temperature dances. Anything we can do to drive wood pellet sales and appliance sales, we’re interested.
KT
That’s awesome. Thanks again, Tim.
TP
Thank you, Kyle.
