Under the terms of the contract, Enviva will supply wood pellets from its facilities in the southeastern US.

The contract is scheduled to commence in early 2013.

Enviva chairman and CEO John Keppler said demand for clean, renewable resources like sustainably produced wood pellets continues to grow as energy generators invest in alternatives to traditional fossil fuels.

"Our partnership with E.ON strengthens the economic and environmental benefits achievable from renewable biomass resources in energy production," added Keppler.

E.ON biomass sourcing manager Jan Groeneveld said strong agreements with companies like Enviva that are focused on growing biomass supply and share the firm’s views on the importance of promoting sustainability are essential for it to invest in biomass generation.