Vietnam is turning forest waste into one of its most valuable exports, with trade in wood pellets soaring past US $1 billion last year. That is according to new data obtained by Vietnam Customs, which shows that pellet exports climbed to $1.08 billion for the year to December, a 52 per cent jump on 2024, with the booming bioenergy trade driven almost entirely by power‑hungry Japan and South Korea.
Wood Central understands that demand for pellets, which now make up 7 per cent of Vietnam’s $17.3 billion trade in forest products, is being fuelled by an ’ insatiable appetite for sawdust, branch waste and excess wood chips. Officials claim that Vietnamese forest waste offers higher density, longer burn times, and lower emissions than other pellets, making it an ideal byproduct for fueling thermal power plants and industrial heating systems.
According to officials, Vietnam exported more than 6 million tonnes of pellets last year (or $805.27 million), with Japan and South Korea responsible for taking 94 per cent of those pellets. But as both countries tightened their carbon targets, demand for biofuels grew further, leading to increased reliance on pellets to meet climate targets.
However, Forest Trends, an international non‑profit that monitors global supply chains, has warned that the current boom is masking key structural weaknesses in the Vietnamese pellet supply chain. That’s because the country’s supply chain relies on “secondary raw materials,” including waste from secondary wood‑processing facilities, creating a total dependence that “fluctuates in availability, pricing and season constraints.”
According to Professor To Xuan Phuc, a senior policy analyst at Forest Trends, forest businesses “must invest in developing dedicated raw material zones to reduce the Vietnamese wood pellet industry’s reliance on secondary supply sources and ensure compliance with legality and sustainability standards,” warning that growth could outpace capacity to secure stable, certified feedstock.
And then there are tightening sustainability requirements, with South Korea and Japan increasingly turning to FSC and PEFC certification to shore up their supply chains, according to VietnamNet, one of the country’s largest state-owned media outlets. However, despite challenges, Vietnam’s ability to upcycle residues has become one of its standout success stories. Last year, storm‑damaged timber and broken branches from typhoon Yagi saw millions of tonnes of wind‑thrown forest residue collected, chipped and processed into pellets and wood chips, allowing exporters to ramp up the trade of pallets and wood chips into global markets.
