Vietnam’s timber industry has achieved a historic milestone, as wood pellets - once seen as mere byproducts - have now crossed the $1 billion export threshold for the first time. The rapid rise in global demand for sustainable bioenergy, especially from Japan and South Korea, has transformed humble timber waste into one of Vietnam’s most dynamic exports.

According to data from Vietnam Customs, wood pellet exports reached USD 1.08 billion in the first 11 months of 2025, marking a 52% increase over the same period in 2024. This surge makes pellets the fastest-growing product in Vietnam’s wood industry.

In 2025, Vietnam’s total wood and wood product exports hit USD 17.3 billion, with pellets alone accounting for 7% of that figure - up significantly from 4.8% the previous year.

Why the world wants Vietnamese wood pellets

Made from production leftovers such as sawdust, branches, and wood chips, pellets offer high energy density, long burning times, and low emissions. Their clean-burning properties have attracted eco-conscious markets in Japan, South Korea, and increasingly, the EU.

In 2024, Vietnam exported 6.03 million tons of wood pellets, earning USD 805.27 million - up 29.1% in volume and 18.5% in value compared to the previous year. Japan and South Korea accounted for a combined 94% of Vietnam’s pellet exports.

The global push toward renewable energy has turned wood pellets into a vital fuel source for thermal power plants and industrial heating systems. As countries tighten carbon emissions targets, demand for low-emission fuels like pellets is expected to grow even more.

Success comes with serious challenges

Despite the billion-dollar milestone, industry experts from Forest Trends warn that Vietnam’s pellet sector remains vulnerable. The industry still relies heavily on secondary raw materials - waste products from other wood processing operations - and lacks dedicated supply zones. This dependency exposes pellet producers to fluctuations in availability, pricing, and seasonal constraints.

Adding to the pressure are increasingly strict sustainability requirements from export markets. South Korea has recently tightened its quality standards, driving up export prices. Meanwhile, Japan now mandates traceability certifications like FSC and PEFC, and is gradually rolling out SBP (Sustainable Biomass Program) standards for low-emission supply chains.

To maintain its momentum, the sector must address both supply stability and certification compliance. Experts urge Vietnamese firms to invest in their own raw material zones and prioritize legality and sustainability in line with import regulations.

From forest debris to billion-dollar value

Vietnam’s success story with wood pellets is a compelling example of upcycling - transforming what was once considered low-value waste into a strategic, high-demand product.

Earlier in 2025, even broken branches and storm-damaged trees from typhoons like Yagi were collected and processed into wood chips or pellets, helping earn nearly USD 2 billion in revenue from exported forest scraps in just seven months.

With strategic planning and sustainable sourcing, Vietnam’s wood pellet industry stands poised not just to grow, but to lead globally in the renewable biomass energy space.

Tam An