Dual benefits in wood pellet and biomass charcoal production in Nghe An

PROMOTING FORESTRY ECONOMY IN MOUNTAIN REGIONS

Wood processing factories only buy acacia into gas, so people are forced to peel off the bark, cut branches and shoots and leave them in the forest. So even though the price is high, the actual income is not much. Photo: Nguyen Hai

It is not by chance that investors choose Nghe An to invest in factories.biomass pellet productionWith the advantage of being the province with the largest forest area, second in the region and top 5 in the country, Nghe An has abundant raw materials to develop renewable energy projects.

However, these are projects where raw material areas are closely linked to remote areas, so attracting investment is not simple. What is noteworthy about these investors is that instead of investing profitably in central urban areas, they have invested hundreds of billions of VND in particularly difficult areas such as Dong Van commune (Que Phong) and Thanh Huong commune (Thanh Chuong).

The investment project to produce activated carbon and biomass charcoal of Khanh Tam Joint Stock Company in Dong Van commune was invested 5 years ago. Initially, the purpose was only to open a incense stick processing factory to purchase lân from local people. To create a stable raw material area, the Company coordinated with the district to build a project to support the cultivation of lân trees; at the same time, invested in a processing line for incense sticks, activated carbon and biomass charcoal. After more than 5 years of investment, the Company invested more than 300 billion VND, thereby completing phase 1 and going into production. Up to now, the Company has developed a raw material area of ​​2,000 hectares, and the Company has completed procedures to grant certificates for 900 hectares of forest.

Mr. Bui Van Hien - Vice Chairman of Que Phong District People's Committee

In addition to the above project, there is currently an investment project in Thanh Huong commune (Thanh Chuong).Biomass pellet factoryof Thanh Chuong Wood Production and Trading Joint Stock Company. According to the Department of Science and Technology, this is a modern project, using European technology, supported by the province with 700 million VND from the technology innovation fund. The raw material demand is 300,000 tons/year, the production of 150,000 tons of pellets/year has started operating since mid-2021.

Mr. Dang Trong Sang - company representative shared: Newly put into operation, the company purchases by-products, sawdust, branches and leaves from households to produce pellets, but in the long term will use plantation wood as raw material. Currently, the products are mainly exported to Korea, but the Japanese market is determined to be the main market and in the long term will be exported to Europe.

The project to produce biomass pellets from planted forest wood of Biomass Fuel Vietnam Company at VSIP Hung Nguyen Industrial Park is worth 70 million USD. Photo: Nguyen Hai

In addition to the two private enterprise projects, Nghe An also has a large-scale biomass pellet factory.Biomass Fuel Vietnamat VSIP Hung Nguyen Industrial Park with investment capital of 28,300 billion VND, Japanese technology, raw material demand of 300,000 tons/year and production of 161,000 tons of products/year; biomass pellet production project of DKC Energy Joint Stock Company at Nam Cam Industrial Park with investment scale of 250 billion VND, German technology, capacity of 120,000 tons of products/year.

Since the project to produce biomass pellets and activated carbon has been launched, people have been able to save time and effort in shelling and exploiting by-products left in the forest, which increase the risk of forest fires due to vegetation cover. Photo: Nguyen Hai

The biomass pellet factories in the economic zone are all modern technology projects from Europe; there are raw material purchase contracts signed with forest planting units and enterprises in the area. After production, the products are exported to Japan and Europe. These are promising investment projects that contribute to ensuring output for people and forest planting enterprises in mountainous, remote and isolated areas of Nghe An and Ha Tinh.

Representative of Investment Department, Southeast Economic Zone Management Board

According to experts, 100% of the pellet production in our country is exported. Currently, the average price per ton of pellets is 150 USD and the pellet production capacity of our country will increase by 10-15% per year in the coming time.

However, learning from the experience of several years ago, Korean thermal power projects did not import pellets and Vietnam mainly imported pellets for Korea, so the price dropped sharply to 91.63 USD/ton, causing heavy losses to factories. Therefore, on the one hand, it is necessary to constantly improve technology, increase the added value of pellet products, and businesses must proactively seek and diversify markets to avoid dependence, leading to price reductions and price pressures.

Biomass pellets are used to produce electricity to replace fossil fuels such as coal and oil in thermal power plants. Photo courtesy

The current world demand for biomass pellets is 12 - 15 million tons/year and by 2030 about 50 million tons, while the current supply of pellets is about 12 million tons/year. With a forest area of ​​up to 13.8 million hectares, of which nearly 7 million hectares are production forests, Vietnam is one of the 10 largest pellet producing countries in the world with a capacity of 2.5 million tons/year. Nghe An with 4 factories, the annual raw material demand is 700,000 tons and produces about 500,000 tons of pellets.

(Source: Market analysis of investment projects in Nghe An)

SUSTAINABLE ENVIRONMENT PROTECTION

Biomass pellet productionis the new trend of the world to protect the environment, fight climate change. When the world switches to using renewable energy, replacing fossil fuels, if Vietnam invests in modern pellet production projects, we will simultaneously achieve two goals: protecting sustainable forests, while exploiting the potential and advantages of land, bringing livelihoods to people in mountainous areas. In the projects of Nghe An Agriculture sector on restructuring agricultural production and developing forestry economy, the province has demonstrated this major orientation.

Comrade Hoang Nghia Hieu - Member of the Provincial Party Committee, Vice Chairman of the Provincial People's Committee visited the Biomass Fuel Vietnam biomass pellet factory at VSIP Hung Nguyen Industrial Park. Photo: Quang An Document

The advantage of producing biomass pellets or activated carbon, biomass charcoal uses, processes planted forest trees such as acacia, eucalyptus... In addition, it also takes advantage of sawdust, bark, branches and leaves that have been discarded for a long time after exploitation, which people often leave in the forest. Currently, the rate of utilizing wood products after harvest is still a weak point causing waste in our country's forestry.

The average rate of wood utilization in the world is 30-35% of tree volume and in countries like Russia it is 80-85%, Germany is nearly 90%, while in our country it is only 18-21%, which is too wasteful. Therefore, modern activated carbon or biomass coal factories invested in our country will contribute to overcoming this limitation. Not only that, if the previous wood processing production lines often caused pollution, the technology of producing and processing compressed pellets is safe.

People in Chau Binh commune (Quy Chau) import and sell hybrid glue to collectors. Photo: Van Truong

Mr. Tran Manh Cuong - a truck owner specializing in collecting forest products on National Highway 48 added: Previously, trucks entering the villages only purchased finished wood products at an average price of 1 - 1.2 million VND/m³; other by-products such as bark, branches, and tops are all thrown away; now there is a biomass pellet factory, so except for the leaves, all by-products such as tops and bark are purchased, which is quite convenient. Except for the leaves, the purchase price is only 1 million VND/m³but reduces the risk of forest fires due to the layer of vegetation left behind.

By-products such as branches and tops of acacia hybrid trees after exploitation are dumped and left by people on the road to Lien Hop commune (Quy Hop). Photo: Nguyen Hai

One of the concerns of biomass pellet production project is the raw material area. Currently, although the factories are located in Que Phong, Thanh Chuong districts or inNam Cam Industrial Parkor VSIP Industrial Park both have raw material areas of up to tens of thousands of hectares, but in the long term, to be proactive in raw material areas, each project must have a reasonable planting and exploitation plan, both to limit the phenomenon of "buying and selling competition" and to reduce deforestation, forcing down prices and making it difficult for people.

Nghe An provincial leaders witnessed the signing ceremony of the project's funding for sustainable forest protection and ensuring raw material areas for biomass pellet production plants. Photo courtesy of Quang An

In addition, the production of biomass pellets and activated carbon has strict requirements on origin and forest certification, so the province must have a policy on forest development and a reasonable exploitation plan to effectively promote the potential of forest land. Nghe An's production forest land area is still quite large and the secondary forest products are also quite abundant, but not all enterprises are granted forest certification. If we do well, we will not onlyforest economic developmentbut also protects forest area and increases green coverage.

Experts recommend that, entering the post-Kyoto Protocol period on climate change, the world will gradually shift to using renewable energy to replace fossil fuels such as coal and oil. The average price per ton of pellets at the factory is 145 USD/ton and at the thermal power plant is 200 USD, equivalent to 5 million VND/ton. Therefore, to ensure economic value, in addition to modern technology investment projects and market diversification, countries and localities with pellet production projects need to have plans and strategies for legal and sustainable forest exploitation.

Mr. Dang Trong Sang - Director of Thanh Chuong Wood Production and Trading Joint Stock Company