IPPs to boost South Korean pellet demand

: Biomass
20/10/13

South Korea's total demand for imported wood pellets should expand next year with two new independent biomass-fired power plants starting operations at the end of this year.

The country's imported wood pellet demand could increase by up to 3.7mn t in 2021 compared with an expected 3mn t this year. Independent power producer (IPP) GS EPS is expected to start commercial operations at its 105MW biomass-fired power plant Dangjin No.2 in December, while fellow IPP CGN Daesan Power is also expected to start commercial operations at its 109MW biomass-fired power plant by the end of this year, South Korean conglomerate Samsung C&T's senior professional Ted Kim told the Argus Biomass Live — Virtual Conference 2020.

GS EPS started a test run of its Dangjin No.2 biomass power plant in August. The plant is expected to consume 300,000 t/yr of imported wood pellets and 200,000 t/yr of domestic wood chips once it starts commercial operations.

CGN Daesan received its first cargo from Canadian wood pellet producer Pinnacle in August under its long-term contract for testing at its 109MW biomass-fired power plant in Daesan. CGN Daesan's plant is expected to consume around 500,000 t/yr of wood pellets once it starts commercial operations by the end of this year.

Combined IPP demand grows

Combined demand for imported wood pellets for co-firing from power plants Gunjang Energy, Hanwha Energy and OCI SE, along with dedicated plants — such as newbuilds GS EPS's Dangjin No.2 and CGN Daesan — will reach 2.08mn t in 2021, according to Kim.

South Korean state-controlled utility Korea South East Power (Koen) started commissioning its 200MW Yeongdong No.2 unit in August, which has been converted to a 100pc dedicated biomass power plant. This project followed the conversion of Koen's 175MW Yeongdong No.1 unit to 100pc biomass in 2017.

Koen is currently accepting bid applications for a tender seeking 250,000t of imported wood pellets for delivery over 1 December 2020-30 April 2021 for the Yeongdong No.1 and No.2 units. The closing date for bid applications is tomorrow.

Combined demand for imported wood pellets from state-controlled utilities Koen, Korea Southern Power and Korea Western Power could be around 1.62mn t in 2021, Kim predicted.

EWP, Komipo change strategy

But South Korea's overall increase in demand for imported wood pellets will be offset by a significant drop in demand from state-owned utilities East West Power (EWP) and Korea Midland Power (Komipo), which are switching to 100pc unused woody biomass consumption.

EWP decided not to use imported wood pellets from the second half of this year, Kim said. EWP issued tenders for a combined 60,000t of imported wood pellets and 34,000t of domestic unused woody biomass last year, while it has issued tenders for a total 51,000t of unused woody biomass so far this year.

Komipo plans not to use imported wood pellets from next year, he said. Komipo issued a tender in September for 33,000t of domestic unused woody biomass for delivery from a mutually negotiated date with the seller until February 2021.

Demand for unused woody biomass from state-owned utilities has grown since South Korea's ministry of trade, industry and energy lowered the amount of renewable energy credits (RECs) that state-owned utilities can earn by co-firing with wood pellets from 1 REC/MWh to 0.5 REC/MWh from July.

Unused woody biomass is domestic woody forest biomass that will otherwise not be used in any industrial function in South Korea. Raw materials that can be used in unused woody biomass include by-products of harvesting, tree renewal and logging from mountains and forests, by-products from pest control such as the removal of pest-infected trees, by-products from pruning for tree management and by-products that cannot be used for wood production because they have been damaged by forest fires, according to the Korea forest service. Kim forecast that the unused woody biomass market could grow to as much as 1mn t in the future.

It is possible to see more policy changes about biomass use in the future that might render demand for imported wood pellets even more volatile, Kim added.

Low REC, SMP prices

The recent lower electricity prices and REC spot prices in South Korea are also likely to be another factor in reducing the country's imported wood pellet demand.

South Korea's electricity price, known as the system marginal price (SMP), fell as a result of the Covid-19 pandemic and reduced the profitability of selling electricity, undermining demand for imported wood pellets from state-owned utilities and IPPs.

The average SMP price for September was 55.94 Korean won per kWh ($0.05/kWh), 30pc lower than last year's September average SMP price at W79.64/kWh, according to Korea power exchange data.

South Korean REC spot prices have remained weak so far this year, affecting IPP wood pellet demand. The average price of REC spot prices for September was W45,422/REC, 21pc lower from W57,229/REC on the average price of September 2019, according to Korea power exchange data.

South Korean IPP spot demand for imported wood pellets is largely driven by SMP and REC prices. But Kim does not expect an increase in IPPs' demand for imported wood pellets from current operating co-fired plants in the near future because of persistent lower prices for SMP and RECs.

By Sam Hong

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25/04/21

Vietnam's wood pellet exports rise on year in January

Singapore, 21 April (Argus) — Vietnamese wood pellet exports rose on the year in January, because of more demand from South Korea and Japan. Vietnam exported 596,000t of wood pellets in January, up by 17pc from the previous year's 507,000t, but fell by 7.3pc from a month earlier, according to customs data. The year-on-year increase in exports was because of strong demand for pellets from South Korean end-users, following a change in state subsidies for biomass-fired generators . Higher buying interest from Japan, given new biomass power plants starting up or coming on line in early 2025, also contributed to the rise in exports. The month-on-month decrease in exports was because of a lack of trading activity during Vietnam's nine-day Tet holiday from 25 January to 2 February. Vietnamese wood pellet shipments to Japan stood at 385,000t in January, up by 72pc from a year earlier, but down by 10pc from December 2024. It accounted for 65pc of the country's wood pellet exports in January. South Korea was Vietnam's second-largest buyer of wood pellets, accounting for 28pc of the country's wood pellet exports in January. Vietnam exported 166,000t to South Korea in January, up by 1.5pc from a year earlier, but down by 18pc from December 2024. There were 31,800t of wood pellets exported to France in January, down by 49pc from a year earlier, with no volumes shipped in December. By Joshua Sim Vietnam's wood pellet exports in January 2025 t Quantity on month (%) on year (%) Japan 385,335 -10.1 72.1 South Korea 166,187 -17.5 1.5 France 31,750 N/A -48.9 Total 595,956 -7.3 17.4 Source: Customs data Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Vietnam wood pellet output capacity to rise: Correction

25/04/17

Vietnam wood pellet output capacity to rise: Correction

Corrects capacity in table Singapore, 17 April (Argus) — Vietnamese wood pellet producers are building new pellet mills and manufacturing facilities to increase production capacity this year to meet an anticipated increase in demand from Japan. Producers such as Uniexport — Vietnam's biggest wood pellet producer — and Tam Sen have planned expansion projects, the firms told Argus , and the country could add around 800,000 t/yr of production capacity by the end of 2026, with at least half of this likely to be developed by the end of 2025. The additional capacity would cater for Japanese utility demand, in line with the country's growth in generation capacity. Japan's biomass-fired capacity rose by over 500MW in 2024, and additions of around 700MW are expected for 2025. The simultaneous start-up of many plants could lead to logistical challenges at first. Vietnam has been unable to meet South Korean demand because of its shortage of wood pellets, exacerbated by rains and port congestions , that has prompted suppliers to focus on clearing backlog. The new lines will hence also help Vietnam to provide more supply to South Korea. Uniexport aims to complete most of its expansion projects, which are spread across the country and total 412,500 t/yr of wood pellets, by the fourth quarter of 2025. Uniexport has also planned to have an additional 315,000 t/yr of capacity by the end of 2026, with the overall expansion set to take its total production capacity to 1.46mn t/yr (see table) . The new plants will use varying types of feedstocks, such as sawdust from sawmills, and wood chips from lumber processing activities, depending on the location of the facility. Tam Sen aims to complete the construction of its new wood pellet mill in Binh Duong in southern Vietnam by September 2025. The wood pellet factory will have a 80,000 t/yr production capacity and will mainly use wood residue from sawmills as feedstock for pellet manufacturing, said Tam Sen's factory director, Mai Ly. The expansion will take its total production capacity to 380,000 t/yr. Meanwhile, Japanese energy company eRex has also started up the 150,000 t/yr Tuyen Quang pellet factory in northern Vietnam in March, with plans to build up to 20 wood pellet factories in the coming years. By Joshua Sim New pellet production capacity t Region of Vietnam Plant Location Operational Annual supply capacity Estimated capacity 2025 2026 Central UNE Gia Lai Gia Lai 1Q2025 150,000 150,000 150,000 HDV Daklak M'Drak Daklak 4Q2025 150,000 37,500 150,000 Southern Unifor Renewables Vung Tau 4Q2025 120,000 30,000 120,000 Northern UNE Phu Tho Phu Tho 1Q2025 120,000 120,000 120,000 UNE Nghi Son Thanh Hoa 3Q2025 150,000 75,000 150,000 UNE Bac Giang Bac Giang 4Q2026 150,000 - 37,500 Sub-total 412,500 727,500 Source: Uniexport Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan’s Renova boosts renewable power sales in March

25/04/14

Japan’s Renova boosts renewable power sales in March

Tokyo, 14 April (Argus) — Japanese renewable energy developer Renova's electricity sales rose in March from a year earlier, according to data published by the company on 11 April. Renova sold around 256GWh of renewable electricity in March, including solar, biomass, and geothermal. This is up by around 26pc from the same month in 2024. Electricity sales generated by biomass-fired power plants totalled around 222GWh in March. Ronova's biomass-fired power capacity was 395GW with six plants at the end of March. The company sells electricity from the 75MW Sendai Gamo plant, the 75MW Kanda plant, the 75GW Omaezaki Kou plant, and the 75MW Tokushima Tsuda plant under Japan's feed in tariff (FiT) scheme. Electricity generated by the 75MW Ishinomaki Hibarino plant and the 21MW Akita plant is sold under the county's feed in premium (FiP) scheme, based on long-term power purchase agreements (PPAs). Renova delayed the start-up of the 50MW Karatsu plant in southern Japan's Saga prefecture, which is expected to generate up to 350GWh/yr of electricity, from March to September 2025 because of technical issues. The plant will sell electricity under the FiP scheme based on a long-term PPA with its client from the beginning of commercial operations, according to the company. By Takeshi Maeda Renova's biomass-fired electricity sales in March 2025 Capacity (MW) Electricity sales (GWh) Start of operations Akita 21 13 Jul-16 Ishinomaki Hibarino 75 37 Mar-24 Sendai Gamo 75 51 Nov-23 Tokushima Tsuda 75 41 Dec-23 Omaezaki Kou 75 30 Jan-25 Kanda 75 50 Jun-21 Total 395 222 Source : Renova Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs may tighten Vietnam's wood pellet supply

25/04/09

US tariffs may tighten Vietnam's wood pellet supply

Singapore, 9 April (Argus) — Tariffs imposed on Vietnamese wood furniture exports to the US could pressure furniture production and tighten supply of byproducts, which are used to produce wood pellets in Vietnam. US president Donald Trump announced tariffs on nearly all US trading partners on 2 April, which took effect on 5 April, with only oil and other energy commodities exempt from the package. This means a sharp 46pc tariff has taken effect on Vietnamese exports, including wood products from the southeast Asian country. This could weaken US demand for Vietnamese wooden products, which could result in an overall cut in furniture production. Vietnam exported 53,000t of wooden furniture to the US in 2024, from 37,000t a year earlier, mirrored US customs data on furniture exports show. This accounted for nearly 12pc of Vietnam's overall wooden furniture exports last year. A drop in Vietnamese furniture exports and manufacturing would result in less process residues — such as sawdust and wood chips — made available for pellet producers. Manufacturers in southern Vietnam, which typically cater for the South Korean market, would be particularly affected because they use furniture residues as a key feedstock. But wood pellets sold to Japan, which are usually more expensive and certified for Japan's feed-in tariff market, mainly use wood chips from lumber processing as raw material. And trade data suggest that Vietnam does not export any lumber to the US, meaning there should be little impact on lumber-based wood pellet production. A drop in furniture residues would add to the pressure on an already-tight raw material market in Vietnam since the start of the year. A shortage in raw materials had caused a backlog in wood pellet loadings from before the Tet holiday in January. And unfavourable weather conditions have disrupted feedstock supply since February. It is still unclear whether the tariffs could be removed in the near future. Vietnam's secretary general of the ruling Communist Party To Lam proposed in a call with Trump on 4 April to remove all tariffs on US products. Trump posted on social media platform Truth that he looks "forward to a meeting in the near future". Impact on other biomass markets Other biomass market participants in Asia, such as palm kernel shell (PKS) traders, are also monitoring the impact from US tariffs. The most immediate risk faced is the uncertainty of foreign exchange rate fluctuations, which could hamper trading activity. But PKS traders and sellers said it was too early to determine an impact from tariffs and they have not seen any significant changes in the market, especially after the recent Idul Fitri holiday in Indonesia and Malaysia. By Nadhir Mokhtar Vietnam wood furniture exports (t) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

New Zealand's Genesis Energy signs wood pellet deal

25/03/14

New Zealand's Genesis Energy signs wood pellet deal

Sydney, 14 March (Argus) — New Zealand utility Genesis Energy has signed an initial agreement with biomass developer Carbona to study the viability of commercial wood pellet supply to the Huntly Power Station, supporting efforts to transition it from coal-fired power to wood-fired. Carbona is also building a 180,000 t/yr torrefied wood pellet plant in central North Island, it announced on 14 March. The company plans to sell the pellets it produces at the site to major utilities in New Zealand and abroad, beginning in 2028. Genesis-operated Huntly is New Zealand's largest power station, supplying the country's grid with 1,200MW, and currently runs on gas-fired and coal-fired generators. But Genesis has been exploring opportunities to substitute coal with biomass at Huntly over recent years. Genesis signed a non-binding pellet purchase agreement with Australian biomass producer Foresta last month. The utility at that time said that it would need 300,000 t/yr of torrefied wood pellets by 2028 to achieve its coal reduction goals. Carbona's deal with Genesis also comes just days after the Ministry of Business, Innovation, and Employment released data showing that coal and gas-fired electricity generation across New Zealand collapsed in the October-December 2024 quarter , dropping by 42pc on the year. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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