Idemitsu meeting low-carbon needs with Binh Dinh black pellet production plant

The plant boasts Vietnam’s first commercial-scale black pellet production by a Japanese group

The project is implemented by Idemitsu Green Energy Vietnam Co., Ltd., an affiliate of Idemitsu Kosan. It specialises in producing Idemitsu’s green energy pellets™ (GEP) in Vietnam and delivering it to Japan, where they are used mainly by coal consumers at their factories. The plant has an annual capacity of 120,000 tonnes of GEP, which is a high-calorie biomass fuel made from widely used semi-carbonised wood pellets. The raw material is acacia, which is produced in large quantities in Vietnam, which boasts a thriving furniture industry.

This is the first black pellet production in Vietnam by a Japanese company. The startup of this plant is a major first step towards Idemitsu Kosan’s goal of establishing a supply system with an annual production capacity of three million tonnes by 2030.

Vietnam has a thriving lumber remnants industry, and it is one of the world’s top suppliers of biomass fuels. According to a report by the Research Group of Wood Associations and Forest Trends in 2022, Vietnam exported nearly 4.9 million tonnes of biomass pellets, an increase of more than 39 per cent compared to 2021.

Among them, Japan is one of the largest export markets of Vietnam’s wooden pellets. In Japan, coal is used in a wide range of industries, including power, pulp and paper, chemicals, and food companies, supporting people’s daily lives. Therefore, Idemitsu Kosan is undertaking this project with the aim of meeting the low-carbon needs of Japanese coal users, who show big interest in GEP for their co-combustion and reduction of coal use.

Atsuhiko Hirano, representative director and executive vice president of Idemitsu Kosan said, “There is about 100 million tonnes of coal demand in Japan. At the same time, Japan is faced with the goal of decarbonisation so we have to reduce the carbon emissions coming from coal-fired plants. We believe that this biomass products will help reduce the carbon emissions at the plants in Japan. We’re hoping that Japanese coal users will be more attracted to the use of black pellets to reduce carbon emissions whilst enabling to run the existing coal-fired power plants.”

Specifically, GEP can be co-fired with coal at a maximum of 30 per cent in co-firing tests, and the coal substitute emits virtually zero carbon. The company is also looking into the possibility of further increasing the co-firing ratio and eventually using only GEP as fuel.

Leverages its coal business base of about 40 years, Idemitsu Kosan will build an integrated supply chain for biomass fuels around ASIA region. This supply chain features all stages ranging from raw material procurement to production, sales, and transportation.

The development of the plant in Binh Dinh also reflects Idemitsu Kosan’s long-term commitment to the Vietnamese market, contributing to the country’s vital carbon neutrality efforts.

“We’re hoping to expand further into the renewable energy sector. We have secured our footprint in the solar market and now biomass,” Hirano said. “I hope that we can expand this capacity of biomass. And if there are any further opportunities available in the renewable sector, we will be very much willing to pursue them. Indeed, Vietnam is a very important place for Idemitsu Kosan as a whole. And we look forward to working more closely with the country.”

Idemitsu Kosan established its first business development in Vietnam in 1989 when it began a feasibility study for oil exploration. The Japanese company opened its initial representative office in Hanoi in 1994. Since then, Idemitsu Kosan has been engaged across various business areas, including oil and gas exploration and production, refinery and petrochemical, lubricants, fuel distribution, engineering, and renewable energy.

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