Japanese firm begins work on $19 mln biomass fuel factory in northern Vietnam

Japanese renewable energy firm Erex Co., Ltd. kicked off construction of a VND478.8 billion ($19.4 million) biomass fuel factory in the northern mountainous province of Tuyen Quang Wednesday.

Covering 3.3 hectares, the factory will be designed to produce 150,000 tons of biomass pellets and 150,000 tons of wood chips yearly, starting in 2025.

Biomass pellet is a key material for various sectors and industries including thermal power, industrial incineration and animal feed.

The project, named Erex Sakura Tuyen Quang, will contribute to Vietnam’s target of reducing emissions and stabilizing power generation, Erex director and president Hitoshi Honna said at the groundbreaking ceremony.

The use of wood byproducts, as a biomass fuel, would help Vietnam reach zero emissions, he explained.

Highlighting Erex’s project as the first Japanese investment in the province, Tuyen Quang Chairman Nguyen Van Son asked relevant agencies to facilitate the project’s progress. He also hoped the Erex’s project would kickstart more Japanese investment in the province, especially in supporting industries, education and healthcare.

Tuyen Quang has so far welcomed 20 foreign direct investment (FDI) projects with a total registered capital of $340 million, Son said.

On the same day, at a meeting between Erex leadership and Tuyen Quang authorities, Hitoshi Honna said the firm was willing to build more plants in the province, given its abundant resources and provincial authorities’ support.

Erex is an active renewables investor in Vietnam. In July 2023, the firm broke ground for a VND474.8 billion ($19.99 million) biomass fuel plant in the mountainous province of Yen Bai. The three-hectare factory has a designed annual capacity of 150,000 tons of wood pellets and 305,000 tons of wood chip products a year.

In August-September 2023, Erex Co., Ltd. announced plans to build biomass power plants in the northern highlands provinces of Lao Cai and Bac Kan, and the central province of Ha Tinh. In January 2024, it said it plans to build a 50MW biomass power plant in the central coastal province of Binh Dinh.