SUMMARY

VIETNAM WOOD PELLET PROCESSING INDUSTRY – 2025 & Outlook 2026

Global wood pellet market

Global pellet trade up 9.9%yoy in 2025 (27.6mt);
Supply: US remains top exporter but losing share; Southeast Asia (VN, Indonesia) expands rapidly.
Demand divergence: Japan strong (+35%yoy), EU/UK stable, South Korea in structural decline (policy-driven).

+ EU demand modest recovery but increasingly cyclical; rising ESG/regulatory pressure (e.g., EUDR).

+ Japan demand supported near-term by existing FIT/FIP projects; growth to slow as new imported-fuel projects lose incentives.

+ South Korea demand weakens amid REC cuts and shift toward domestic feedstock; supply diversification ongoing.

Price trend

+ Average pellet prices up 5.5%yoy in 2025 but weakened in Q4.

+ Short-term supported by geopolitical-driven fuel risks; medium-term downside from oversupply (SEA expansion) and subsidy rollbacks.

Vietnam Wood Processing

Local material supply & harvesting:

Plantation area [...] million ha; afforestation stable; certified coverage rising but still low ([...]%). Resources are concentrated in the Northern Midlands & Mountains, while harvesting is led by the South Central Coast & Central Highlands, supported by favorable rotation cycles and species mix.

2025, newly planted area reached 320k ha (up 5.2%yoy); certified forest area rose to [...] ha (up 110k ha YoY), exceeding the 500k ha target. Harvested output growth slowed to 5.3%yoy (~25.2m m³), due to weaker exports in 2H2025 amid U.S. tariffs.

Timber imports & pricing: Import volumes increased by 11.4%yoy; still structurally important ([...]% demand) but reliance declined in 2025. U.S. and China dominate supply, with U.S. share rising amid stricter traceability requirements. Import prices decreased by [...], in line with global trends.

Wood processing industry: [...] manufacturers; ~USD[...] billion output; highly export-oriented (~90%). Production remains concentrated in the South (~52.6%) but is gradually shifting toward the North/Central, closer to raw materials.

Exports: up 5.7%yoy to USD17.2 billion in 2025, with growth slowing in 2H. The U.S. remains the largest market (55%), while Japan (wood pellets) is the key growth driver. Furniture dominates (>60%), while pellets show the strongest growth (+20.8%yoy).

Vietnam Wood pellet processing

Manufacturing & capacity:

[...] producers; total capacity ~7.7 – 8 million tons, up [...]million tons since end-2023, driven by large-scale plant commissioning and new entrants. Emerging ecosystems ([Company name...], [Company name...]) are scaling up rapidly. Capacity remains concentrated in the South (~45%) but is shifting toward Central/North, closer to certified plantation resources.

Pipeline & competition:

[...] million tons of new capacity (with over 10 projects) coming online from late-2025, increasing competition over the next 2–3 years amid policy tightening in key export markets. Domestic demand remains small (<10% capacity) but has medium-term potential, supported by energy transition and fuel switching from coal.

Exports: Up [...]%yoy to [...] million tons (USD[...] million, up [...]%yoy) in 2025, driven by Japan (up [...]%yoy); South Korea declined sharply ([...]%yoy). Export momentum weakened in 2H, with softer demand and prices in Q4.

Market dynamics & risk:

South Korea demand contracted (5 consecutive quarters) due to REC cutting policy and domestic feedstock prioritization. Japan remains the key growth driver, supported by existing FIT/FIP projects. Export concentration increased sharply (Japan share: 43.8% → 74.1% in 2021–2025), highlighting rising structural risk despite near-term demand support.

TABLE OF CONTENTS

A. Executive summary

B. Global wood pellet market in 2025

International trade of wood pellets
Snapshot of Top 6 wood pellet exporting countries
% Market share of global wood pellet import
EU - wood pellets supply & demand
Japan’s wood pellet imports & Vietnam’s market share
Japan - Biomass Power Plants Commissioned in late 2024 - 2025
South Korea’s wood pellet imports & Vietnam’s market share
Biomass Policy Comparison: Japan vs. South Korea – Implications
Global wood pellet price movements

C. Vietnam wood processing industry in 2025

Harvested wood output
Imported wood supply
Wood export by product category
Wood export by market

D. Vietnam Wood pellet processing

Production process
Material supply
Industry scale & Key manufacturers
Export overview
Export market breakdown & movements

E. TOP Vietnam wood pellet exporters in 2025

Top wood pellet exporters
Top new exporters or having strong growth in 2025
Top export sales drop in 2025
Key market & clients of each players in 2025
Top Foreigner buyers in 2025

ADB mobilized a US$135 million financing package for VinFast in green funding

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