Long-term wood chip transport contract signed with Biowood Norway AS

March 12, 2009

Long-term wood chip transport contract signed with Biowood Norway AS

On March 9, Kawasaki Kisen Kaisha, Ltd. ("K" Line) announced a contract with Biowood Norway AS to transport wood chips, used in the production of wood pellets which have attracted considerable attention as a potential biomass fuel source. The signing ceremony was held in Oslo on the same day. Under this long-term contract, the company will acquire two ships designed specifically to carry wood chips, which from December 2010 will begin transporting loads of wood chips from all over the Atlantic to the Norwegian port of Averoy.

At the ceremony, Chairman Olsen and two other representatives of Biowood Norway joined "K" Line Vice President Suzuki in signing the agreement.

Biowood Norway was formed in 2006 as a joint venture between the electric power company Hafslund (which holds a 78% capital stake) and More og Romsdal Biobrensel (22%). The company plans to use the imported wood chips to manufacture an annual 450,000 tonnes of wood pellets, which will then be sold as fuel to electric power companies in Norway and other countries. Though the pellets generate carbon dioxide, the trees which produce the wood absorb an equal amount of CO₂, so the overall fuel cycle does not generate any net CO₂ emission. This is gaining attention as a sustainable energy system that can minimize global warming. Since electric power companies in European countries are trying to cut CO₂ emissions, many are trying to switch some of their combustion-type power plants to wood chips, wood pellets and other forms of biomass fuel. "K" Line intends to focus its efforts on transporting this type of biomass fuel, which will contribute to environmental preservation.

Photo: Mr. Eiichi Suzuki, "K" Line Vice President and Assistant CEO (left),

Mr. Per Kristian Olsen, Chairman of Biowood (and Managing Director of Hafslund) (center), Mr. Lars Frode Askheim, President of Biowood (right)

Please direct any questions about this article to the contact addresses below:

Kazuhiko HARIGAI

General Manager

Thermal Coal, Woodchip and Pulp Group

Kawasaki Kisen Kaisha, Ltd., Tokyo

Tel: +81-3-3595-5502

Goichi TSURUTA

Team Manager

Woodchip & Pulp Team, Thermal Coal, Woodchip and Pulp Group

Kawasaki Kisen Kaisha, Ltd., Tokyo

Tel: +81-3-3595-5463

Fax: +81-3-3595-5371

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