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Wood pellets stand a chance to become a billion-dollar export product

​Demand has increased, the value of wood pellets on the world market is being pushed up, creating opportunities for enterprises in the field of manufacturing this item to increase export sales.

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Using wood chips to make pellets at an enterprise

Dong Nai is one of the two largest producers and exporters of wood and forest products in the country, with an abundant source of raw materials and waste products for tablet manufacturers to find more export markets.

 Export value increased rapidly

 Statistics of the General Department of Customs show that, in the first half of 2022, the export volume of wood pellets has reached nearly 2.4 million tons, with a turnover of USD 354 millio. With favorable conditions, the export turnover of biomass wood pellets in the whole year of 2022 can reach about USD 700 million. In the near future, wood pellets have the potential to enter the group of agricultural and forestry products for export with an export turnover of more than 1 billion USD.

 The output and value of exported tablets have increased sharply in recent years, mainly due to the sudden increase in demand for tablets in EU countries. The reason is that EU countries turned their back on gas from Russia when the Russia-Ukraine conflict broke out earlier, which was imported to serve heating needs. Besides, the market of Korea, Japan (especially Japan), which accounts for more than 90% of the traditional export of Vietnam's wood pellets, is increasing rapidly.
On the world scale, experts forecast the demand for biomass pellets is about 12-15 million tons/year and by 2030 about 50 million tons. The world is gradually turning to renewable energy to replace fossil energy such as coal and oil.

 Research report on production and export of pellets of Vietnam: Current situation and some aspects of policy has just been published by Forest Trends in collaboration with Vietnam Timber and Forest Products Association (Viforest), shows that, wood pellet is a new product that appeared less than 10 years ago, but the export value has grown very fast. In 2018, the export of tablets increased by 67% in volume and 120% in value compared to the previous year, marking an export value of more than USD 362 million. In 2021, the export turnover of tablets will reach USD 413 million. In the first 6 months of 2022, the export of tablets reached USD 354 million, equaling more than 85% of the turnover of 2021.

 To Xuan Phuc, an expert from Forest Trends, said that the demand for wood pellets in the world is increasing, especially in the EU market. Vietnam's wood pellet industry is facing great opportunities to expand production and export.

 Must orient for sustainable development

Although assessing great opportunities for businesses, according to Mr. To Xuan Phuc, there are still a number of factors that have a direct impact on the sustainability of the industry. Specifically, the source of input wood materials plays the most important role in the growth of the industry. The current source of raw materials is mainly waste by-products from wood processing facilities. However, the source of input wood to make pellets is facing fierce competition with the raw materials of the woodchip industry.

 
In addition, the trend of pellet consumption in major markets around the world shows that these markets require pellets using sustainable certified wood as input materials. Therefore, enterprises need to actively capture market information and prepare to meet these market requirements in the future, not only in the short term but also in the medium and long term.

 Sustainable development of forest materials is one of the issues that Dong Nai is actively implementing. To do this, it is necessary to join forces of production enterprises and afforestation units as a bridge between local governments. The province is currently implementing the forestry development strategy for the period of 2021-2025, with a vision to 2050 in the province. Accordingly, the goal of the project is to develop quickly and sustainably the wood and forest product processing industry. This continues to be a spearhead economic sector and makes an important contribution to the province's socio-economic development. And it is also a favorable condition for enterprises in the wood industry in particular, in which there are enterprises making export wood pellets, which have legal sources of raw materials, ensuring increasingly high standards from the export market.

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Author: Vi Quan

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