Alberta to Add Two Wood Pellet Manufacturing Facilities

An agreement between Mackenzie County and Calgary-based PowerWood Canada Corp. will bring two new wood pellet manufacturing facilities to northern Alberta, according to Woodworking Network (12-30-25).

Mackenzie County Reeve Josh Knelsen announced the agreement on December 23, 2025, describing the project as a way to convert wildfire-damaged timber into energy while supporting regional economic development. Knelsen said the two facilities represent hundreds of millions of dollars in private investment and could create up to 300 direct jobs, with additional employment across forestry, construction, transportation, and local businesses.

Construction at two sites in the Mackenzie County region is expected to begin by mid-2026. One site will focus on pellet manufacturing, while a second location will support rail shipping of finished product and additional production capacity.

PowerWood Canada Corp. plans to produce “black pellets” using fire-damaged timber at its first Peace River facility, to be built on a 65-acre site near La Crete. CEO David Peters said the plant will use a steam explosion process to convert burned wood into pellets by the end of 2026, adding that buyers in Japan have already expressed interest in using the product for power generation.

The facilities are expected to introduce Canada’s first steam explosion pellet production process, developed by Valmet, which the company says produces black wood biofuel pellets with 94% less carbon release than coal. PowerWood said similar plants using the technology are operating in France, Norway, and Malaysia, with additional facilities under construction in Europe and Asia.

Once operational, planned for 2027Q1, the Peace River plant is expected to have an annual production capacity of 350,000 tons of black biofuel pellets. The company said it has secured long-term renewable Crown forestry licenses covering millions of hectares of Albertan forest, providing a 15–20-year supply of fire-damaged timber. PowerWood also said it has agreed terms with a Japanese buyer for 100% of offtake produced at its Peace River pellet plant, on a long-term take-or-pay basis.

PowerWood Canada Corp. plans to open a second Alberta plant and has developed expansion plans for further plants in New Brunswick and Nova Scotia.