Biomass trading platform BioEx launches in Latvia

BioEx is launching a biomass trading platform that will serve as an online tool for all biomass users in Latvia – from producers and traders to heating and cogeneration companies. The company aims to bring together all major Latvian energy and forestry companies that use biomass in their operations.

Market participants can already register on the platform, and the first trading session is scheduled for 6 February 2023.

“The core value of the BioEx platform is the transparency of transactions, based on information exchange and an efficient pricing mechanism, namely, open auctions. Nothing ensures market efficiency like a transparent online trading platform that brings buyers and sellers together,” says Jurijs Adamovičs, co-founder of BioEx.

The total consumption of wood chips, a type of biomass, in Latvia is around eight million MWh per year, which is around 320 million euros in monetary terms. “The primary objective of the BioEx platform is to ensure trading efficiency that will bring significant benefits to Latvian heating and CHP companies, municipalities, biomass producers, as well as heat and electricity consumers.

For greater transparency

“The BioEx platform will work in a similar way to global online commodity exchanges, allowing market participants to buy and sell biomass products in open, regular, and transparent trading sessions, which will determine the best price and delivery terms for biomass such as woodchips at the time. The platform’s strategic partner Industra Bank will guarantee secure settlements and act as an execution agent for the platform.

“All biomass market players, from municipal boiler houses to pellet producers, are currently transacting and procuring in a fragmented, non-transparent market with no transparent information on supply and demand. This is a market where there is significant potential for efficiency gains, which we will be able to exploit with the BioEx solution in the future,” promises Gunārs Greiža, member of the board of BioEx.

The first version of the platform will now include market participant registration, classification by qualification criteria, trading sessions, delivered biomass quality and settlement reports, a biomass energy calculator, system support, guarantee management, and other features necessary for efficient transaction management.

A step towards a more organised energy market

Minister of Economics Ilze Indriksone points out that the introduction of the biomass trading platform is a significant step towards the clean-up of the Latvian energy market, especially in the heating sector. “An open and accessible trading solution for all participants will bring practical benefits to Latvia’s energy end-users, i.e. the citizens, as the new trading platform will ensure fair competition between buyers and sellers and, consequently, the best possible conditions. It should be noted that a large part of the heating supply companies in Latvia are linked to municipalities, which directly serve the population of their region. The new trading platform will give these municipalities the confidence that their biomass purchases are being made as efficiently as possible,” said the Minister.

Latvia has several hundred players in the biomass market, such as 62 regulated heating companies producing heat from biomass and at least as many producers that are smaller and do not meet the requirements of the regulated market but are active on the market. There are also around 50 pellet, biomass export, and other wood-based raw material producers in Latvia. An additional market is also made up of several hundred biomass producers, transporters, and biomass holders, which is virtually every forest and agricultural landowner.

Member of the Board of the Latvian Association of Heat Companies and Chairman of the Board of SIA Jūrmalas siltums Valdis Vītoliņš says that the new platform is designed to enable a quick and reasonable assessment of what is currently an appropriate market price and the quality of the offer. “Our companies’ task is to offer users uninterrupted, reliable and high-quality services at a price that is economically justified, and this platform will probably give them confidence that raw materials are being purchased as efficiently as possible. It is important that this IT tool also ensures that small and medium sized woodchip supply companies can operate successfully in a freely competitive environment,” he says.

Owners: EcoHeat Holdings and FortySeven Software Professionals

The BioEx biomass trading platform was created by companies with expertise in heat supply and IT solutions, combining industry knowledge with how best to build a digital platform for better trading. EcoHeat Holdings, a Latvian group of companies specialising in metalworking and manufacturing, as well as the operation of environmentally friendly heating systems in urban and industrial facilities, is a 75% member of BioEx. The group’s companies are active in the manufacture of modular boiler houses and in the provision of heating services to Latvian municipalities through the installation and management of modern mobile container-type boiler houses.

BioEx’s 25% shareholder FortySeven Software Professionals is a United Kingdom-based IT consultancy and full-cycle software development company with more than 10 years of experience in projects in a variety of industries, including banking and fintech, commodities and energy, as well as public administration.

Source: Press release (labsoflatvia.com). Publicity photo.