Turning Wood Residues into High-Value Exports: Vietnam’s Wood Pellet Industry Surpasses USD 1 Billion for the First Time
Many by-products from the wood processing industry are being effectively utilized and transformed into high-value products that are increasingly in demand across global markets. Notably, Vietnamese enterprises have, for the first time, generated over USD 1 billion in export revenue from this segment.
According to official statistics, Vietnam’s exports of wood and wood products have continued to grow steadily, reaching USD 17.3 billion in 2025 and maintaining their position as one of the country’s key export industries. During the production process, various wood residues such as chips, sawdust, and small branches are collected and processed into wood pellets—an increasingly valuable export commodity.
Data from the Customs Authority shows that in the first 11 months of 2025 alone, wood pellet exports reached USD 1.08 billion, marking a sharp 52% increase compared to the same period in 2024. This makes wood pellets the fastest-growing product segment within Vietnam’s wood industry.
By the end of November 2025, wood pellets accounted for approximately 7% of the total export value of wood and wood products, up from 4.8% in the same period of 2024. Although full-year figures are not yet available, exports have already surpassed the USD 1 billion threshold for the first time, establishing wood pellets as a new billion-dollar export category.
Illustrative image: Vietnamese wood pellets are highly favored in Japan and South Korea. Photo: Do Huong VGP
Wood pellets are valued for their relatively low cost and high energy efficiency. They offer a long and stable combustion process, producing consistent heat output with minimal ash. Compared to many traditional fuels, wood pellets generate less smoke and significantly lower harmful emissions.
As a result, rising demand for bioenergy in key markets such as Japan, South Korea, and the European Union has become a major driver behind the strong growth in Vietnam’s wood pellet exports in 2025.
In 2024, Vietnam exported 6.03 million tons of wood pellets, generating USD 805.27 million in revenue—an increase of 29.1% in volume and 18.5% in value compared to the previous year. Japan and South Korea remained the two largest markets, accounting for approximately 94% of Vietnam’s total wood pellet exports.
However, according to policy analysts from Forest Trends, despite contributing over USD 1 billion to the country’s wood export turnover, the wood pellet industry continues to face several structural challenges. One major issue is the lack of dedicated raw material zones, with producers heavily reliant on secondary supply from other wood processing activities. This dependence makes production vulnerable to seasonality, fluctuations in raw material prices, and supply instability—particularly as demand from Japan continues to grow.
In addition, increasingly stringent requirements on quality and sustainability from export markets present further challenges. South Korea has recently tightened its quality standards, contributing to higher export prices, while Japan requires certifications such as FSC and PEFC and is gradually introducing SBP certification for low-emission supply chains.
Given these realities, experts recommend that enterprises invest in developing their own raw material sources to reduce dependence on secondary supply chains. At the same time, companies need to place greater emphasis on ensuring the legality and sustainability of their products in line with regulatory requirements in key export markets.
