FSC suspends Vietnamese wood pellet producer AVP

  • Spanish Market: Biomass
  • 01/11/22

International non-profit organisation the Forest Stewardship Council (FSC) has stripped Vietnamese wood pellet producer An Viet Phat (AVP) Energy of its ethical sourcing endorsement for 3½ years following allegations that it sold pellets with false certificates. The company's trademark licence has also been revoked for the same period.

A notice on the FSC website alleges that AVP "falsely" claimed a large volume of wood pellets were made of 100pc FSC-certified raw material, according to a March 2021 transaction verification loop issued by the FSC and its assurance partner, Assurance Services International (ASI). AVP said the suspension is the result of a mix-up in raw materials used in the manufacturing of pellets sold to South Korea and material used in the manufacturing of pellets sold to Japan. Both countries' renewable energy schemes have different sustainability requirements.

The second phase of the transaction loop verification process revealed a discrepancy in buying and selling volumes, according to the FSC notice. An investigation by the FSC and ASI found that AVP had provided documents showing the purchase of FSC-certified raw materials from certificate holders in 2020. But some of AVP's suppliers denied that harvests had taken place at certified forests, the FSC said.

AVP told Argus it received a letter from the FSC through AVP's certifying company SGS before the notice was posted on FSC's website but it had little time to react apart from notifying its customers.

AVP said it has contacted the FSC and SGS seeking more details on the reason for the suspension. It plans to discuss ways of resolving the issue after gaining more clarity. It is extending full co-operation with the FSC in resolving the issue, with it willing to rectify any errors in its operations once it receives more details.

Misunderstanding

AVP said that there could have been a misunderstanding surrounding the volume of raw material it purchased for the manufacturing of wood pellets to be sold to Japan, as well as for pellets to be manufactured and sold to the South Korean market. AVP does not only buy FSC-certified raw material, as most pellets sold to South Korea do not require the same certification requirements as material sold to Japan. This may have resulted in a mismatch in raw material volumes meant for the Japanese and South Korean markets during the investigation, it said.

AVP has stopped producing FSC-certified wood pellets since the suspension last month and is holding back "a few thousand tonnes", it said, although it declined to clarify the exact volume. It is also working closely with its Japanese customers to supply pellets certified by other international certification bodies.

Japanese consumers under the country's feed-in-tariff scheme are required to provide proof of legality and sustainability of their biomass, with the majority utilising FSC's certification to do so. Japan is thelargest importer of FSC-certified wood pellets, according to the FSC, while Vietnam is the main producer and exporter of FSC-certified wood pellets.

Some market participants estimate AVP exported around 400,000-500,000t of wood pellets to Japan in 2021, with shipments to South Korea at around 200-300,000t. AVP declined to give its exact export volumes but said its production capacity totals 1.8mn t/yr, although some market participants said actual production is likely lower. AVP's suspension and expulsion from the FSC system is likely to tighten supplies.

AVP is continuing to export wood pellets to other regions where buyers do not require FSC-certified material, such as South Korea.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

Japan’s NYK to build biomass-fuelled biomass carrier


14/05/24
14/05/24

Japan’s NYK to build biomass-fuelled biomass carrier

Tokyo, 14 May (Argus) — Japanese shipping company Nippon Yusen Kaisha (NYK Line) and its partners plan to explore developing what it described as the world's first biomass-fuelled biomass carrier. NYK Line, its subsidiary NYK Bulk and Projects Carriers, Japanese firm Tsuneishi Shipbuilding and UK biomass supplier Drax signed an initial agreement on 13 May to jointly study developing a biomass-fuelled biomass carrier, with an aim to build it by the end of 2029. The vessel will be equipped with a pyrolysis gasifier system, burning wood pellets from storage to generate gas for use in a gas-engine power generator. The electricity will be used to move the ship. NYK Line expects the vessel to be a Handysize bulker with 20,000-45,000t of cargo capacity, but is unsure of the exact capacity and whether the vessel will be expanded. The companies aim to use wood pellets for now, but may examine if other type of wooden biomass can be consumed in the future. NYK Line expects to curb greenhouse gas (GHG) emissions by 22pc, compared to conventional marine fuels. It has been a challenge for Handysize bulkers to switch to alternative marine fuels because of their fuel tanks' limited size, so the companies are examining the use of biomass to reduce GHG emission on these ships. Japanese shipping firms have tried to shift away from conventional marine fuels to achieve decarbonisation, by introducing LNG , LPG , ammonia , batteries and methanol . But a biomass-fuelled ship is unprecedented, said NYK Line. Biomass-fired power generation have been commercialised on land, but companies need further technological development to implement it on vessels. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Potential strike threatens Vancouver port again


13/05/24
13/05/24

Potential strike threatens Vancouver port again

Calgary, 13 May (Argus) — A labour dispute at the Canadian port of Vancouver could result in another work stoppage, less than a year after a strike disrupted the flow of more than C$10bn ($7.3bn) worth of goods and commodities ranging from canola and potash to coking coal. Negotiations between the British Columbia Maritime Employers Association (BCMEA) and the International Longshore and Warehouse Union (ILWU) Ship and Dock Foremen Local 514 union have stalled as the two sides try to renew an agreement that expired on 1 April 2023. A 21-day "cooling-off period" concluded on 10 May, giving the union the right to strike and the employers association the right to lock out the workers. A vote and 72-hour notice would first need to occur before either action is taken. The BCMEA filed a formal complaint to the Canada Industrial Relations Board (CIRB) the same day, which had to step in last year in another dispute. The BCMEA locked horns with ILWU Canada over a separate collective agreement in 2023 leading to a 13-day strike by the union in July. This disrupted the movement of C$10.7bn of goods in and out of Canada, according to the Greater Vancouver Board of Trade. Vancouver's port is the country's largest — about the same size as the next five combined — and describes itself as able to handle the most diversified range of cargo in North America. There are 29 terminals belonging to the Port of Vancouver. Terminals that service container ships endured the most significant congestion during last year's strike. Loadings for potash, sulphur, lumber, wood pellets and pulp, steel-making coal, canola, copper concentrates, zinc and lead concentrate, diesel and renewable diesel liquids and some agri-foods were also disrupted. The Trans Mountain-operated Westridge Marine Terminal responsible for crude oil exports on Canada's west coast was unaffected. A deal was eventually reached on 4 August. The strike spurred on proposed amendments to legislation in Canada that would limit the effect of job action on essential services. A bill introduced in Canada's Parliament in November would update the Canada Labour Code and CIRB Regulations accordingly. The bill has been progressing through the House of Commons, now having completed the second of three readings. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan’s Daio Paper to explore biorefinery


13/05/24
13/05/24

Japan’s Daio Paper to explore biorefinery

Tokyo, 13 May (Argus) — Japanese paper manufacturer Daio Paper is planning a trial biorefinery, aiming to begin commercial production of sustainable aviation fuel (SAF), second-generation bioethanol and biodegradable plastic feedstock by the April 2032-March 2033 fiscal year. Daio, in partnership with domestic biorefinery venture Green Earth Institute (GEI), plans to develop technology to demonstrate manufacturing the bioproducts by 2030. Daio Paper plans to use wooden biomass, waste paper and paper sludge as feedstock. The company declined to disclose any planned commercial output capacity, as well as location of the biorefinery. The project is financed by Japan's state-owned research institute Nedo. Daio Paper is attempting to achieve decarbonisation, while weakening paper demand has forced the industry to seek new business opportunities. Fellow Japanese paper producer Nippon Paper has also tried to develop biorefinery technology with GEI, targeting to begin commercial production of bioethanol for SAF and petrochemical feedstock by 2027-28. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India’s NTPC tests 20pc torrefied biomass co-firing


13/05/24
13/05/24

India’s NTPC tests 20pc torrefied biomass co-firing

Singapore, 13 May (Argus) — India's state-owned generator NTPC has demonstrated 20pc torrefied biomass-coal co-firing at a 110MW unit at its Tanda power plant in the northern state of Uttar Pradesh. The test was part of NTPC's efforts to expand biomass co-firing across its coal-fired fleet as it aims to lower emissions. Each percentage point of biomass co-firing has the potential to reduce carbon emissions by approximately the same percentage, while also helping in mitigating air pollution caused by direct burning of agricultural waste in farmlands, NTPC said. The generator currently conducts 7-10pc non-torrefied biomass co-firing at NTPC's Dadri power plant, near Delhi. Torrefied biomass was found suitable for higher co-firing percentages without significant system modifications, NTPC said. The torrefied biomass was produced by heating biomass in the absence of oxygen to exhibit characteristics akin to high-quality coal. The gross calorific value and cost of torrefied biomass pellets were currently equivalent to imported coal, it added. Costs could be reduced with the maturity of technology and market in the long run, NTPC said. India's push to cut coal reliance NTPC's efforts are part of India's broader goal of cutting emissions as the country aims to trim reliance on coal in the coming years and attain net zero by 2070. Delhi had initially asked Indian utilities to adopt co-firing of at least 5pc biomass pellets by October 2022. But only a fraction of utilities followed the directives, which eventually prompted the federal power ministry to review the biomass co-firing policy. The ministry amended the policy in June last year and delayed the start date of co-firing, asking all coal-based thermal power plants with bowl mills to use a minimum 5pc blend of biomass pellets made primarily from agricultural residue, with effect from the start of India's 2024-25 fiscal year on 1 April. The threshold would increase to 7pc from the start of 2025-26, the ministry said. Plants with ball and race mills should co-fire the same percentages of torrefied biomass pellets made from agricultural residue during the same time frame, it said. India has surplus biomass supplies of about 230mn t/yr, largely from agricultural residue, the power ministry previously said. NTPC tenders NTPC has awarded biomass supply contracts totalling about 5.2mn t for 20 power plants operated by NTPC, and a joint venture plant. Out of which, it has so far co-fired 316,657t of biomass pellets at 13 NTPC power plants and at the joint venture plant. The generator is setting up biomass pellet plants at various locations to ensure a steady supply of pellets for co-firing. It has set up a 22 t/d non torrefied pellet plant at Lehra Mohabbat, Bhatinda in Punjab state. It is building a 100 t/d torrefied and 100 t/d non-torrefied pellet plant at joint ventureAravali Power's Jhajjar plant. It is also building a 50 t/d non-torrefied pellet plant at the Dadri plant. By Saurabh Chaturvedi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more