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1. What are wood pellets?

Wood pellets (or sawdust pellets) are one of the most popular Biomass biomass fuel energy solutions made from 100% natural wood such as wood chips, wood pieces, tree trunks, and sawdust... without mixing any other additives. These are all leftover materials and are used after the trees are harvested to make lumber, household appliances, and other agricultural products.

To use for necessary purposes, after selecting the type of wood, and peeling the bark, the wood will be crushed into a material with an average size of less than 6mm. Then, they are processed through a specialized machine system with a high centrifugal speed process, combining radiated temperature and pressure. They are bonded into small, hard wood pellets of uniform size, with a moisture content of less than 15% that can burn out. During the drying process, uniform size will help them catch fire and produce better heat. After being created, tablets must have low moisture and ash content and high heat output.

Because they are produced from wood waste, they are completely safe to use, take advantage of available raw materials and are highly effective when used as fuel. Tablets gradually replace fossil energy such as gas, oil, gas, and are environmentally friendly, so they are increasingly popular.

2. Structure and technical characteristics of wood pellets

The main ingredient of wood pellets is 100% natural wood that is pressed into pellets into a uniform general shape. A wood pellet will have the following technical specifications (Data for reference only, can change according to customer requirements):

TECHNICAL SPECIFICATIONS OF WOOD PELLETS
Tablet diameter	5 - 50mm
Tablet length	10 - 40mm
Compression	620kg/m3 - 700kg/m3
Humidity	6 - 8%
Maximum ash level after using tablets	3%
The heat generated when burning	4,300 - 4,800 Kcal/kg

In addition, for wood pellets exported abroad, additional indicators that need to be declared include the amount of sulfur emitted when burned, Nitrogen, and Chlorine. These indicators will have certain standards depending on the export region.

3. Application of wood pellets

With many outstanding advantages, wood pellets are applied in a variety of fields from industry to daily life. Especially in the industrial field, wood pellets have outstanding applications as follows:

• Used as fuel in boiler systems of industries. They replace traditional fuels such as coal, gas, or oil.
• Used to generate heat in the electricity sector at thermal power plants and electricity production projects.
• Providing energy for Spa systems, saunas, and hot water supply networks for swimming pools and public play areas in winter.
• Used in heating equipment systems such as fireplaces, replacing electric and coal heating
• Used in steaming, drying, pasteurization, and sterilization systems in food and beverage factories.
• Used in heat supply systems for four-season heated swimming pools, and hot water networks for amusement parks, restaurants, hotels, schools, and rehabilitation areas.
• Used in wine-making systems, industrial kitchens at restaurants, large hotels...

According to many studies, using wood pellets in the long term helps businesses and consumers save a lot of costs and is also an important part of protecting the human environment. One ton of wood pellets produces energy equivalent to 120 gallons of oil but the price is 42% cheaper than oil, equivalent to 170 gallons of Proban but the cost is only 67%.

The heat generated by the tablets is also quite high when burned. They produce from 4,300 - 4,800 Kcal/kg, which can be higher or lower depending on the raw materials used for production. During the production process, they produce little smoke, which is good for users' health.

On the other hand, fossil raw materials will be depleted over time, causing prices to increase. Wood pellets take advantage of renewable materials, discharged from wood factories and farms. Rice husk pellets have the least price fluctuations and are abundant and sustainable in reserve.

4. Wood pellets market potential

Wood pellets are popular worldwide because of their superiority over fossil fuels, fuel-related policy changes, market trends...

Specifically, based on a report by Global Market Insight, the wood pellet market size is valued at 12 billion USD by 2023 and is expected to achieve a CAGR annual growth rate of over 17.5% from 2024 to 2032. Growing consumer trend towards renewable energy in major countries in Europe and Asia-Pacific; Global economic and political fluctuations, oil price increases due to the Russia-Ukraine conflict, fuel demand of EU countries such as the UK, Germany, France, and the Netherlands is huge due to the loss of gas and wood pellets from Russia reasons why the wood pellet market is evaluated positively.

Over the past few years, the value of wooden compresses exports has steadily increased in Vietnam, reaching almost $800 million by 2022. In the first 10 months of 2023, revenue from exports of wooden compresses overseas has exceeded $250 million. Vietnam's main markets are Korea and Japan, accounting for over 90% of total annual exports.

5. Wood pellet standards in some countries

Japan, Korea, and Europe are the three main pellet markets of Vietnam. Requirements for technical standards of pellets exported to each country will be different at each time.

Wood pellet standards for export to Korea

It can be said that Korea is Vietnam's leading wood pellet export market. In the past, this market's quality requirements were not too high, so most suppliers in Vietnam could meet them.

The Korean market requires the creation of two separate standards for industrial and civil wood pellets. In particular, industrial wood pellets are classified as types I1, I2, I3. Meanwhile, types used for civil purposes are labeled type A1, A2, or B.

In particular, the minimum calorific value (NCV) is 16.5 GJ/t - equivalent to 3,943.60 kcal/kg. The minimum calorific value is up to 4,000 kcal/kg in Korean state-owned plants, higher than the 3,900 kcal/kg previously required by most Korean power plants. In addition, regarding pellet ash level Wood compression is also required ≤ 5.

Wood pellet standards for export to Japan

Japan is the second potential market but is more stable than the Korean market. But in Japan, tablets have stricter standards than in Korea. Usually, the required ash level is about ≤ 2%. The lower the ash level, the better. Besides, Japanese partners always require full FSC certification for tablets. Usually, only large workshops and factories can supply and satisfy FSC paper for Japanese partners.

When businesses meet their product requirements, Vietnamese businesses will have long-term contracts with higher and better prices for pellets going to Japan. This helps businesses feel secure about output and cost issues.

Wood pellet standards for export to Europe

Compared to the Japanese and Korean markets, it can be said that this is the most demanding market. The strictest pellet quality requirements, in Vietnam's export pellet markets. Standard industrial requirements require a maximum ash level of 1% and must be packaged in 15kg PP bags. For civil pellets, the ash level requirements are more stringent, maximum of 0.5 - 0.7%. In addition, pellets exported to Europe must have a certificate for using wood materials from areas with FSC certification, and Enplus quality certification...

The European market is very competitive and highly demanding. Domestic factories are still very difficult to produce. But in the long term, domestic businesses still need to strive towards it, with long-term and planned support from agencies and sectors.

6. Selling price of wood pellets

The selling price of tablets depends on the price of raw materials at different times and the quality of each manufacturing factory. Understanding the needs of the open market and with the mission of being a leading unit in energy solutions, Thuan Hai brings to the market a line of high-quality wood pellets produced on a modern and closed production line.

The raw materials that Thuan Hai is producing are always and continuously stocked in large quantities. Therefore, the price of Thuan Hai's wood pellets is stable and committed to quality to help businesses feel secure in wholesale imports to meet production needs. Besides, we help businesses develop sustainably with environmentally friendly biomass fuel sources.

If you need to find a source of quality pellets and a reputable pellet transportation service, please contact us. Thuan Hai - Quality and reputable supplier of wood pellets brings customer satisfaction. Contact me for advice!