In Vietnam, the production of wood pellets has expanded rapidly over the past five years. The country has now become the second-largest global exporter of wood pellets, after the United States of America (USA), with an annual export volume of more than 3.5 million tons and around US$413 million in turnover in 2021. Strong additional growth is expected in 2022.
The EU’s misguided biomass example is a factor here: Some 95 per cent of these pellets are shipped to Japan and South Korea, as these two countries have imitated the EU in creating incentives for energy companies to burn wood in the name of ‘renewable’ energy.
Added to this, Russia’s invasion of Ukraine stopped all of Russia’s wood pellet exports, in particular to the EU, which has therefore increased EU imports from elsewhere. But since Japan and South Korea also imported pellets from the USA and the additional EU imports are causing tension in USA supplies, Vietnamese wood pellet producers have increased their production to meet the demand, and are expecting still further growth.
Most of the pellets exported to Japan and South Korea come from by-products (such as sawdust, shavings and wood chips) from Vietnam’s wood-processing industry, mostly specialised in the production of furniture and located in the South of the country (Ho Chi Minh City). Some 70-80 per cent of this industry’s supply is imported from the USA, Europe and other tropical countries. The majority of Vietnamese tropical wood imports are considered “high-risk” in terms of the legality of their source.
But the COVID pandemic slowed down the furniture business – and its by-products. The pressure to meet the growing demand in Japan and South Korea now eats more of Vietnam’s domestic wood supply; more pellets come from the country’s tree plantations (mostly acacia), trapping these in a low-quality, fast-rotation business model.
The pressure may also have incited some wood pellet producers to cheat with their Forest Stewardship Council (FSC) certification, demanded by some importers in Japan (but not South Korea): the FSC just blocked An Viet Phat Energy Co. Ltd, a major Vietnamese pellet producer, from using the certification for three and half years, after checks proved that the company had “deliberately ma[de] false claims on a large volume of wood pellets they sold in 2020”. Other companies are being investigated by FSC after numerous claims and allegations “about the integrity of FSC-certified wood pellets in Asia”.
All over the world, activists took to the streets on 21 October 2022 for an International Action Day on Biomass, denouncing large-scale forest biomass burning for energy production as a false climate solution. The worrisome link between wood pellet production in Vietnam and unsustainable forestry practices within the country, as well as deforestation elsewhere – risks aggravated by the war in Ukraine – illustrates once again the globality of wood supply and forestry issues and the need for coordinated, science-informed global responses for a cleaner energy transition.