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Vietnam exported around 3.2 million tonnes of pellets of various types last year, making it the world’s second largest exporter of the products, according to the General Department of Customs.

Vietnam now world’s second largest fuel pellets exporter

Hanoi (VNA) – Vietnam exported around 3.2 million tons of fuel pellets of various types last year, making it the world’s second largest exporter of the products, according to the General Department of Customs.

The Vietnam Timber and Forest Product Association (VIFOREST) reported that Vietnamese pellets were mostly exported to Japan and the Republic of Korea to provide input for thermal power production.

Pellets are biomass fuels generally made from wood wastes, such as wood shavings, sawdust, and logging residues; and agricultural wastes, for example, rice husks, corn stover, sugarcane bagasse, and coffee pulps.

The country’s shipment of pellets rocketed to 3.2 million tons last year from just 175.5 tons in 2013. The export revenue increased 15.3-fold from nearly 23 million USD in 2013 to 351 million USD in 2020.

Vietnam has about 80 pellet factories and production facilities, mostly in the southeastern and northeastern regions, with combined capacity of close to 4.5 million tons per year.

The VIFOREST forecast the global demand for pellets is likely to spur about 250 percent over the next decade, to 36 million tons in 2030.

Vietnam Plus Newspaper

 The ongoing debate about costs and benefits of wood-pellets based bioenergy production in the southeastern United States (SE US) requires an understanding of the science and context influencing market decisions associated with its sustainability.

Production of pellets has garnered much attention as US exports have grown from negligible amounts in the early 2000s to 4.6 million metric tonnes in 2015. Currently, 98% of these pellet exports are shipped to Europe to displace coal in power plants.

This paper asks, “How is the production of wood pellets in the SE US affecting forest systems and the ecosystem services they provide?”

International report presents status and prospects for renewable energy using wood pellets from the southeastern United States

To address this question, the authors review current forest conditions and the status of the wood products industry, how pellet production affects ecosystem services and biodiversity, and what methods are in place to monitor changes and protect vulnerable systems. Scientific studies provide evidence that wood pellets in the SE US are a fraction of total forestry operations and can be produced while maintaining or improving forest ecosystem services.

Ecosystem services are protected by the requirement to utilize loggers trained to apply scientifically-based best management practices in planning and implementing harvest. Bioenergy markets supplement incomes to private rural landholders and provide an incentive for forest management practices that can simultaneously benefit water quality and wildlife and reduce risk of fire and insect outbreaks. Bioenergy can also increase the value of forest land to landowners, thereby decreasing likelihood of conversion to non-forest uses.  As with all land-use activities, effects on biodiversity and ecosystem services of producing pellets for bioenergy are highly variable and context specific and can have differential effects across the landscape and over time. Negative impacts can be avoided or reduced by identifying priority areas for conservation and adopting management plans tailored to best achieve multiple goals in production forests.

Monitoring and evaluation are essential to verify that regulations and good practices are achieving goals and to enable timely responses if problems arise. Conducting rigorous research to understand how conditions change in response to management choices requires baseline data, monitoring, and appropriate reference scenarios. Long-term monitoring data on forest conditions should be publicly accessible and utilized to inform adaptive management.

“Prospects for renewable energy using wood pellets” was produced through an effort coordinated by the Department of Energy’s Oak Ridge National Laboratory (ORNL) following a Bioenergy Study Tour held in April 2016. During the Study Tour, participants from the US and eight other nations visited an old growth forest as well as managed forests, a biomass conversion facility, and a pellet mill. The Tour was an excellent way to facilitate communication about bioenergy crops in the US, for different places have unique land-use histories, regulations, and ways to implement good management practices.

“This report demonstrates how science-based analysis can help us make progress toward understanding how production of wood-based pellets can enhance ecosystem services of southeastern forest systems,” said lead author Virginia Dale, Director of ORNL’s Center for BioEnergy Sustainability.

Dr Carly Whittaker, from Rothamsted Research (UK) and a Post-Doctoral Researcher working in the Supergen Bioenergy Hub, attended the Study Tour. “It was helpful to observe the truly vast scale of managed forestlands are in the South US and how productive they are. It is important to realise how diverse the forestlands are in terms of local management practices and how different landowners respond differently to changes in markets. Overall, it is obvious that the level of regulation to ensure that biomass is grown and sourced sustainably is extensive and thorough”.

“Meeting climate change mitigation goals is expected to increase biomass use globally. This new industry in the southeast US provides a great opportunity to gather scientific evidence about how forests can be protected and environmental performance improved as demand increases” said Dr Raphael Slade, Senior Research Fellow at Imperial College London.

Caspar Donnison, doctoral student in bioenergy at the University of Southampton (UK) also attended the Study Tour and said: “Visiting key stakeholders in the US forestry industry helped to put bioenergy into the broader context in the Southeast US; biomass for wood pellets only accounted for around 2% of forest harvest removals in the SE US in 2014. It was also important to understand the economics of the forestry industry in the US, with wood pellets typically low value products that are not driving major forest management decisions.”

Joining ORNL in preparing the report were researchers from the Argonne National Laboratory and the National Renewable Energy Laboratory; foresters and land owners from the southeastern United States; and scientists from Australia, Brazil, Canada, Denmark, Germany, Poland, Sweden, The Netherlands, the United Kingdom, and the United States.

• According to the International Energy Agency, in December 2020, global carbon emissions were 2%, or 60million tons higher than they were in the same month a year earlier. More carbon emission leads to negative effects such as heat trapping, rise in maximum temperature, rise in minimum temperature, etc., which are responsible for global warming.

• Carbon emission rate should be on the lower side in order to curb the harmful effects of global warming, and this can be achieved by introducing energy sources that are carbon-free. Thus, renewable energy sources come into the picture, and clean energy can be produced by using renewable energy sources.

• Renewable energy is a prominent alternative to conventional energy (which is generated from fossil fuel), and several nations have imposed stringent rules to lower the use of fossil fuels and reduce the carbon footprint. Thus, a surge in the demand for renewable energy sources fueled renewable power generation by an approximately 4%in 2019, which was the highest over the past five years. Production of renewable electricity stood at 2537 GW in 2019.

• Wood pellets are made from compacted sawdust and related industrial wastes from the milling of lumber, manufacture of wood products, and furniture. After the combustion of wood pellets, the emission of harmful gases is very low as compared to other fossil fuels. Demand for wood pellets is considerably high from thermal industries to generate clean energy; power can even be generated by co-firing wood pellets with coal. Thus, huge capital investment is not needed to generate power using wood pellets. These reasons create lucrative opportunity for the global wood pellets market.

Canadian Companies Ensure Supply for Rail Networks amid COVID-19

Modifying shift schedules to reduce employee contact and suspension on international trade are among the many strategies adopted by companies in the global wood pellets market amid COVID-19 pandemic. This has affected business in Japan, since Canada accounts for more than 50% of the country’s supply for wood pellets. As such, alternate revenue streams such as critical industries, including forest products, utilities, and energy are keeping economies running during the pandemic.

Canada is under great scrutiny during the pandemic, as it is responsible for exports to Europe and Asia to generate clean, renewable, and low-carbon electricity in power plants. Companies in the Canada wood pellets market are gaining recognition for maintaining robust supply chains for home heating applications in rural areas that lack accessibility for natural gas grid. They are working at breakneck speeds to keep Canada’s national rail network and ports busy in times of reduced economic activity.

Long Term Supply Agreements Compel Stakeholders to Diversify Feedstock Sources

The wood pellets market is expected to advance at a robust CAGR of ~11% during the assessment period. The increasing number of pellet plants is heavily dependent on the use of sawmill residues as feedstock. However, lack of adequate residues for saw dust and shavings is posing as a challenge for manufacturers and suppliers. Hence, stakeholders are sourcing additional and alternative sorts of woody feedstock involving forest industrial round wood, bark, and wood chips from saw mills, among others, to boost the production of residential and industrial-grade pellets.

It has become imperative for stakeholders to diversify their feedstock sources, since an increasing number of pellet consumers in Europe and North America is procuring long-term supply agreements from suppliers.

Biomass Boiler Grants Support Investment in Systems

Innovations in wood pellet boilers are acting as key drivers for stakeholders in the wood pellets market. The market is projected to reach the valuation of US$ 31 Bn by the end of 2030. Manufacturers are increasing the availability of self-cleaning systems in wood pellet boilers that require minimal user input. However, in many cases, these boilers require frequent maintenance, and the heat exchanger must be often brushed in order to have the highest working proficiency. Hence, companies in the wood pellets market are increasing awareness about its environment-friendly advantages and cost effectiveness of wood pellets to boost boiler sales.

Since the upfront cost of boiler systems can be relatively high than traditional gas boilers, companies in the wood pellets market are increasing awareness about biomass boiler grants to help support the customers investment.

Engineered Pellets Grow Popular in Residential Heating for Cold Regions

People in cold regions are gravitating toward wood pellet stoves, as the cost of natural gas is relatively higher than wood pellets. Wood pellets are growing increasingly popular as a cost efficient way for residential heating. Companies in the wood pellets market are capitalizing on this opportunity to source waste wood materials and sawdust to boost production volumes. These feedstock sources are being bound into pellets using high temperature pelletization processes sans the need for glue or additives.

In order to boost credibility credentials, manufacturers in the wood pellets market are refraining from cutting down trees and focusing on trees killed by the mountain pine beetle. They are increasing the availability of engineered pellets that have uniform size and moisture content that can be cleanly burned in specially designed automatic pellet furnaces.

The global wood pellets market is estimated to be USD 10.52 billion in 2022, and it is expected to reach USD 16.75 billion by 2027, at a CAGR of 7.28% during 2022-2027 (mentioned by Mordor Intelligence in their academic website: www.mordorintelligence.com).

Due to the COVID-19 pandemic, the market witnessed reduced demand and shortages of raw materials. However, Asia significantly had a low impact due to the already existing oversupply and suppressed consumption. The primary drivers for the market include increasing demand for wood pellets in clean energy generation, especially in the European region. However, the adoption and increasing deployment of alternative renewable energy sources such as solar photovoltaic, wind energy, and geothermal in various parts of the world is likely to hinder the market growth during the forecast period.

Figure 1: Wood Pellet Market: Growth Rate by Region (Source: Mordor Intelligence)

Along with the development of the Asian market, Vietnam is no exception in capturing this potential wood pellets production market. Specially, up to now, wood pellets and their products have become one of the export products important to Vietnam. In recent years, the amount of wood pellets exports per year reach about 3 million tons, equivalent to USD 350 million in turnover. Korea and Japan are the most important pellets import markets compression of Vietnam, with export volume to 2 markets accounts for over 90% of the total annual export of pellets. This Report provides updates on the situation of wood pellets exports of Vietnam until the end of the first 8 months of 2021 (according to Forest Trend, Oct 2021).

Figure 2: Export turnover of wood pellets of Vietnam (from 2013 to the first 8 months of 2021)

The special thing coming from this industry is the production materials. Many people may find it hard to believe that this high-efficiency and environmentally friendly product is produced by wood waste products. Wood chips, shavings, sawdust, scraps, twigs, etc. are all waste products of the wood industry in Vietnam. They seem to be just waste, but these waste products are expected to bring in from USD 450-500 million in export value when used to produce wood pellets.