Viet Nam's wood pellet exports can fetch US$1 billion in 2023: specialist

Monday, Oct 31, 2022 12:20

Viet Nam has become the second largest exporter of wood pellets in the world. —Photo courtesy of Vietnam Wood Pellets Branch

Wood pellets are likely to become one of Viet Nam’s key export agro-forestry products with an estimated export turnover of US$1 billion in 2023, according to Do Xuan Lap, Chairman of Vietnam Timber and Forest Product Association.

He was speaking at the congress of establishing Vietnam Wood Pellets Branch in Ha Long City in the northern province of Quang Ninh Province on October 28.

Lap said that pellet production was thriving, bringing significant value to the forestry value chain. This year, wood pellets ranked 4th in terms of export value in eight export items and forest products, behind interior and exterior furniture, wood materials and wood chips.

The first ten months of this year have recorded a sharp rise in output and export prices of wood pellets. In 2021, the amount of wood pellets exported from Viet Nam reached 3.5 million tonnes with a turnover of over $413 million. However, that amount reached nearly 3.5 million tons in the first ten months of this year, worth around $550 million, increasing by 35 per cent in volume and 81 per cent in value over the same period of last year.

“Viet Nam has become the second largest exporter of wood pellets in the world. Japan and South Korea are the two largest customers of Viet Nam’s wood pellet production,” Lap said, adding that more than 90 per cent of Viet Nam’s wood pellets have been purchased by the two Eastern Asian countries.

The congress of establishing Vietnam Wood Pellets Branch was held in Quang Ninh Province on October 28. — Photo

According to wood industry enterprises, the demand for importing wood pellets as fuel for this winter is increasing rapidly in EU countries, Japan, and South Korea.

Speaking at the congress, Bui Chinh Nghia, Deputy Director General of the General Department of Forestry under the Ministry of Agriculture and Rural Development, said that the production and export of wood pellets has constantly grown in both scale and quantity.

“Viet Nam now has about 80 enterprises engaged in the production and export of wood pellets," he said.

"The export value of wood pellets has been continuously increasing from $145 million in 2017 to over $500 million this year."

If the growth is maintained at the current rate, export turnover for the whole year of 2022 may reach around $700 million.

Nghia emphasised the importance of establishing the Vietnam Wood Pellet Branch to unite and unify the enterprises producing and exporting wood pellets, solve arising obstacles and ensure the sustainable development and effectiveness of the industry.

He added: "I hope that after the Congress, there will be a branch that has a voice and plays an important role in the development of the association and the wood industry."

Also at the congress, Vu Duy Van, Deputy Director of Quang Ninh Provincial Department of Agriculture and Rural Development, said that the province has many good conditions to become a centre for transhipment of imported and exported goods to the international market, including items processed from wood and forest products.

According to the deputy director, the export turnover of wood of Quang Ninh has grown steadily over the years. As of October 2022, the province's export value of wood was estimated at $210 million, up 9 per cent over the same period last year. The main export markets are Japan, China, and South Korea.

He said: “I expect that the establishment of the Vietnam Wood Pellet Association will act as a premise for investment and development of modern and intensive forest product processing factories nationwide and in Quang Ninh Province in particular. The province is always willing to create the best conditions for potential investors.”

Wood pellets, commonly made of raw materials such as wood chips, sawdust, shavings, bark, crop straw, and other biomass materials, are becoming a billion-dollar industry with no export tax, according to insiders. Such pellets are now a promising choice as a form of fuel.

Wood pellets are considered a form of carbon neutral renewable energy. The pellets are also used on a large scale in the industry to enhance the thermal value of waste and reduce pollutant emissions.

Europeans use wood pellets in small fireplaces and hot water supply systems to replace electric or gas fireplaces. — VNS

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