A wrong-way bet on the price of wood pellets has jeopardized America’s biggest exporter of the fuel, even though demand has never been higher among the European and Asia power plants burning wood instead of coal. Enviva said its gambit to buy pellets from a customer, and resell them for more, backfired when prices fell, and that nine-figure losses could trigger a default with its lenders by year-end. Enviva’s shares are down about 60% since it warned investors the trade risked its ability to remain a going concern. The stock has fallen more than 97% this year and recently traded below $1. …“Absent a significant and near-term increase in wood-pellet market pricing, we expect [the trade] will continue to have a negative impact through 2025,” Glenn Nunziata said. …It should have been a great time to be the world’s largest pellet exporter. Prices and exports were running high following Russia’s invasion of Ukraine. [to access the full story, a WSJ subscription is required]

Related coverage in Paper Advance: Enviva at a Crossroads: Navigating Choppy Waters