Using biomass pellets to achieve low-emission steam boiler production

Attendees included Dr. Tran Van Luong, Chairman of the Vietnam Environmental Industry Association; Mr. Nguyen Thanh Phong, Chairman of the Vietnam Pellet Association; representatives from state management agencies, scientists, companies producing wood pellets, steam boiler manufacturers, and companies using steam boilers in production. On behalf of the Vietnam Union of Science and Technology Associations (VUSTA), Assoc. Prof. Dr. Truong Manh Tien, member of the VUSTA Presidium, and Editor-in-Chief of the Environmental Economics Journal, participated in the Workshop.

The scene of the Workshop.

The workshop aimed at promoting the conversion of high-emission fuel sources such as coal and oil to low-emission wood pellets in small-scale manufacturing facilities using steam boiler systems.

According to Dr. Tran Van Luong, in Vietnam's industrial production, steam boilers are used to provide heat, steam, and hot water to various sectors, including light industry (textiles, footwear, plastics, cigarettes, food, beverages, beer, soft drinks, aquaculture, and agricultural processing) and heavy industry (basic chemicals, fertilizers, mining, pesticides, sugar production, and rubber production).

Fuel sources for boilers include electricity, oil, gas, coal, and biomass (rice husk, wood chips, sawdust, wood pellets...). Currently, Vietnam does not have comprehensive official statistics on the number of industrial steam boilers. According to information from annual boiler inspections and registrations with state labor management agencies, it is estimated that there are around 9,000 industrial steam boilers in operation across the country.

Dr. Tran Van Luong, Chairman of the Vietnam Environmental Industry Association, deliveres his speech at the workshop.

Many of these facilities use coal as the input for operating their boiler systems. Switching the input source from coal to cleaner fuels would help reduce emissions on a national scale.

Meanwhile, the Vietnamese wood pellet industry, in general, and the wood pellet sector, in particular, have experienced strong growth in recent years. Waste products from the wood industry, such as branches, twigs, sawdust, and wood shavings, are processed into pellets.

Approximately 95% of the wood pellets produced in Vietnam (about 5 million tons) are used for export, mainly to such markets as Japan and South Korea. Exported pellets are used as input fuel, partly replacing the coal currently used for electricity production in these countries. Only about 5% of the total pellet supply is currently used domestically, primarily in the steam boiler systems of small-scale manufacturing facilities. Many of these facilities are undergoing this conversion as part of the global supply chain, supplying large brands such as Adidas, Nike, and Samsung. Some are located in industrial zones where commitments to low emissions and green conversion have been made.

At the workshop, presentations highlighted the opportunity for companies to convert coal-fired boilers to biomass-fired ones, reducing greenhouse gas emissions and meeting the government's environmental requirements. This also presents an opportunity to participate in the domestic carbon market in the future. Moreover, this contributes to building the image of environmentally friendly production companies, enhancing product competitiveness in both domestic and international markets.

While the benefits of using pellets instead of coal or oil are evident, there are challenges for companies converting boilers to biomass. These include a lack of investment capital for conversion, a lack of standards and regulations for manufacturing biomass-fired boilers, and limited design and manufacturing capabilities of boiler manufacturers. Additionally, there are high costs associated with new investments, retrofitting, and downtime during conversion. Another challenge is the lack of a domestic carbon market, which does not yet provide incentives for businesses.

Assoc. Prof. Dr. Truong Manh Tien, Member of the Presidium of VUSTA, and Editor-in-Chief of the Environmental Economics Journal, speaks at the workshop.

Assoc. Prof. Dr. Truong Manh Tien provides insights of the use of pellets in fuel conversion for steam boilers aims at promoting low-emission production in Vietnam and globally as an inevitable trend in environmental protection.

Currently, the World Bank is offering the unit price for a carbon credit was $US5-6, and it potentially rises to $US7-8 per a ton of carbon. The World Bank has allocated approximately 50 million USD for our northern mountainous regions to acquire these credits. This workshop brought great value in the context of the government strongly supports toward sustainable economic development and environmental protection. Assoc. Prof. Dr. Truong Manh Tien mentioned that the Ministry of Natural Resources and Environment currently runs a fund of around 3 trillion VND for environmental protection in Vietnam, encouraging clean development mechanisms that businesses should also prioritize to address environmental issues in production and for future generations.

According to Dr. To Xuan Phuc, representing Forest Trends organization, the Japanese market will continue to play a crucial role for the Vietnamese pellet industry in the coming time. Vietnamese enterprises also have the opportunity to replace pellet supplies from Indonesia for the Japanese market, as pellets made from palm oil shells sourced from Indonesia may not meet the sustainability certification requirements of the Japanese market.

The Vietnamese government is strongly committed to achieving a Net-Zero emission target by 2050. To achieve this goal, the government has issued a number of mechanisms and policies, including Decree 06/2022/NĐ-CP, which requires high-emission production facilities and ministries to reduce greenhouse gas emissions. The government is designing necessary policy mechanisms to establish a domestic carbon credit market. With the government's Net-Zero commitment, the potential for using pellets in the domestic market is quite large.

In conclusion at the workshop, Mr. Tran Van Luong remarked that the workshop was truly successful as it served as a nexus connecting pellet-producing enterprises, boiler manufacturers, and enterprises utilizing boilers in production. Additionally, there is a need for more in-depth workshops because today's workshop could not address all issues.

Furthermore, it is necessary to enhance awareness among boiler users in enterprises, especially small and medium-sized enterprises, regarding efficient energy use and low-emission practices, aiming to participate in the carbon market when it operates. Alongside standards for biomass fuel-fired boilers, there should be policy mechanisms to support industrial enterprises in transitioning from fossil fuel-fired boilers to biomass-fired ones.