According to statistics from the General Department of Customs, Vietnam’s wood pellet exports in 2020 reached approximately 3.2 million tons. With this volume, Vietnam became the second-largest supplier of wood pellets in the world. Nearly 100% of Vietnam’s wood pellet exports are shipped to Japan and South Korea.
Wood pellets are produced from residual materials in the agriculture, forestry, and fishery sectors. They are diverse biomass resources. Specifically, the raw materials for supplier of wood pellets primarily include by-products from wood processing and agricultural by-products.
Currently, there are many countries that use wood pellets as input materials for thermal power plants.
Wood pellets from Vietnam
Dr. Phuc, a specialist at Forest Trends, noted that Vietnamese wood pellet exports increased quickly from 2013 to 2020. Specifically, the export quantity went up more than 18 times, from 175,500 tons in 2013 to 3.2 million tons in 2020. The export value rose 15.3 times, from nearly $23 million in 2013 to USD 351 million in 2020. While a small portion of Vietnam’s wood pellets is used for wood drying domestically, the vast majority is exported.
However, the export prices have been decreasing during the period. This prices have dropped due to an increasing number of businesses entering the production sector, leveraging diverse agricultural and forestry by-products.
There were 74 enterprises in Vietnam, which participated in wood pellet exports in 2020. Among them, 17 large-scale exporters shipped more than 50,000 tons annually. In the meanwhile, 10 medium-sized exporters shipped between 20,000–49,000 tons. The remaining were small-scale enterprises exporting less than 20,000 tons annually.
Acacia wood pellets from Vietnam
Vietnam currently has about 80 factories and private facilities producing wood pellets. They provide a total capacity of nearly 4.5 million tons per year. These facilities locate mainly in the Southeast and Northern provinces.
Raw materials for wood pellet production primarily come from wood residues such as sawdust, shavings, and small branches of plantation forests. The processing factories will compress these materials under high pressure to create wood pellets.
Small-scale production facilities purchase any available wood by-products to produce pellets. They usually buy through a system of intermediary agents. Meanwhile, large enterprises source plantation timber, including timber certified for sustainable forest management (FSC).
Rice husk pellets from Vietnam
Research by Forest Trends predicts that global demand for wood pellets will continue to grow rapidly. The demand will increase of 250% from 2017 to 2030, from 14 million tons in 2017 to 36 million tons by 2030. Apart from Japan and South Korea, many European countries have also adopted wood pellets as fuel for thermal power plants.
Despite its rapid growth, the supplier of wood pellets faces several challenges:
Firstly, the input raw materials have not been adequately controlled, leading to inconsistent product quality and even low-quality products. This issue drives the export price of pellets down. Uncontrollable input materials also pose potential risks to forest resources.
Coffee husk materials for pellet production
Secondly, although it has become one of the important export products, the production and export of pellets have not received adequate attention from regulatory authorities.
Thirdly, there is currently no mechanism to connect businesses and processing facilities within the industry, nor is there a unified voice in production and business activities. This has led to unhealthy competition among enterprises.
Fourthly, competition for input raw materials occurs not only among companies producing pellets but also between these companies and those manufacturing other products such as wood chips and plywood. Many indications suggest that competition for raw materials will become even more intense in the future.
Fifthly, many pellet production and export companies, especially small-scale enterprises, lack information about export markets. As a result, they fail to understand the preferences for purchasing and using pellets, as well as the specific characteristics of raw materials.
Wood pellets in jumbo bags
Vietnam has significant potential for utilizing agricultural by-products like rice husks, straw, and dried crop stems for pellet production. However, much of this material is currently wasteful due to the absence of collection systems.
Experts recommend that the government and the ministries recognize and prioritize the wood pellet sector. With proper strategies, this industry could become a billion-dollar export sector, enhancing the value of agricultural, forestry, and fishery production.
Vietnamese source: https://vneconomy.vn/viet-nam-tro-thanh-nuoc-xuat-khau-vien-nen-lon-thu-hai-the-gioi.htm