IGEV chief on turning forestry waste into high-value exports

IGEV chief on turning forestry waste into high-value exports

Idemitsu Green Energy Vietnam's black pellet manufacturing plant has reached a major milestone with its first commercial shipment to Japan. Hiroto Ono, the firm's general director, discusses the project's development and the company's strategy to tap into rising demand for black pellets with VIR's Thanh Van.

What can you tell us about Idemitsu Green Energy Vietnam's (IGEV) black pellet manufacturing plant in Vietnam?

Our plant is located in Gia Lai, near the Quy Nhon area. Boasting a large forest area and one of the highest forest-cover rates in the country, Gia Lai has the right conditions for developing raw material zones for the biomass energy industry. With a total plant area of approximately 80,000 square metres, an annual production capacity of around 120,000 tonnes, and an investment worth VND900 billion ($34.6 million), the IGEV plant is one of the largest black pellet manufacturing facilities in the world.

What key milestones has the facility achieved so far?

IGEV began developing its black pellet plant in Vietnam in 2020, starting with a pilot plant in Gia Lai to verify the technology and product quality.

In 2021, Idemitsu Green Energy Vietnam was established, and construction of the commercial-scale plant began. Despite challenges during the COVID-19 period, the project was completed with strong support from our team, partners, and local government. The plant was inaugurated in July 2023, marking an important milestone for IGEV in Vietnam.

After the inauguration and the completion of the system's trial run and testing phase, it started commercial operations in October last year. In February, IGEV successfully exported its first commercial shipment of black pellets to Japan, marking the successful transition from project development to full commercial operation.

How does IGEV manage its supply chain, from raw material procurement and production to logistics and exports to Japan?

At IGEV, we manage an integrated supply chain covering sustainable raw material sourcing, production, logistics, and export to Japan.

Our primary feedstock is acacia wood sourced from plantation forests in Gia Lai and Quang Ngai. All materials are procured from suppliers that comply with internationally recognised sustainability standards, including FSC certification and Japan’s JIA requirements, ensuring legality, traceability, and responsible sourcing throughout the value chain.

Beyond procurement, we maintain close collaboration with forest growers, suppliers, and local authorities to promote responsible forest management and secure a stable long-term supply of certified raw materials.

Production is managed under strict quality and sustainability standards, with full traceability from raw materials to finished products. After processing, black pellets are transported to Chu Lai Port and exported to Japan, where Idemitsu’s logistics network enables efficient distribution to end users.

With an annual production capacity of 120,000 tonnes, we are also working with approximately 25 companies in Japan to accelerate commercialisation and market adoption.

As industries continue to advance their decarbonisation efforts, we see significant growth potential for black pellets in Japan, where markets seeking practical pathways to reduce coal consumption while utilising existing energy infrastructure.

What are the key technical advantages of black pellets compared to white pellets?

IGEV's black pellets possess superior technical characteristics compared to traditional white pellets, thanks to being processed using pyrolysis technology in an oxygen-deprived environment. This process is known as torrefaction. During this process, the gas generated from drying is utilised as fuel for the heating system. Upon completion, the characteristics of the pellets are significantly improved. With better grindability, superior water resistance compared to white pellets, and a high calorific value ranging from 4,500 to 5,500 kcal per kilogram, these advantages allow black pellets to be stored outdoors or transported over long distances without crumbling like white pellets.

In particular, this excellent grindability allows for easy co-firing of black pellets with coal at thermal power plants at a ratio of up to 30 per cent through existing coal pulveriser systems, without the need to invest in complex production line modifications.

Going beyond innovative technical optimisations, this product line also opens up a sustainable development strategy and brings high economic value. According to the Gia Lai Department of Industry and Trade, the added value of black pellets is 3.5 to 5 times higher than that of white pellets, creating significant room for local deep processing, thereby reshaping the forestry value chain towards circularity and enhancing regional economic efficiency.

How does the project support Vietnam's sustainable forestry development and its net-zero goals?

IGEV's mission is closely aligned with Idemitsu's Vision 2030, 'Trusted Partner for a Brighter Future'. Through the sustainable utilisation of domestically sourced plantation wood and the creation of quality local employment opportunities, we aim to contribute to both carbon neutrality and long-term socioeconomic development in Vietnam.

Our commitment extends beyond manufacturing. We actively support local forestry development by working with forest growers, providing access to high-quality seedlings, and promoting forest management practices that meet international sustainability standards such as FSC and JIA. These efforts help strengthen the productivity, sustainability, and long-term competitiveness of Vietnam's plantation forestry sector.

The project also creates greater value from forest resources by moving beyond traditional products such as wood chips and white pellets towards higher-value black pellets. This enhances export value while encouraging deeper processing and more efficient utilisation of forest resources.

IGEV continues to consider investing in producing energy pellet products from plantation forests. Ultimately, we believe projects such as IGEV demonstrate how sustainable forestry, advanced biomass technology, and international cooperation can work together to support both economic growth and climate action.

VIR