Russian woodworking industrial companies plead with the government to lift export restrictions to China

Russian woodworking industrial companies are seeking support at the governmental level to lift the ban on the export of wood pellets (woodchip and other fuel pellets) to China. This plea comes in response to the closure of the European market, which has led Russian wood product producers to shift their supplies to China successfully.  As a result, production of wood pellets fell by half between January and April. If this initiative is supported, negotiations could begin between June and July.

 

"Wood chips and flakes are piling up. There is no stable sales market for biofuels. The production of pellets has been reduced to 5-10% of the annual capacity. We can only sell them on the domestic market," Dmitry Gvozdev, general director of Регион-леса said. The inability to send wood chips for processing has led to an increase in the number of wood chips in the forest, which poses "a certain risk" in a fire-hazardous environment, the market participant added.

 

In June, the 18th Russian-Chinese Permanent Working Group meeting is planned to discuss further development of cooperation between the two countries in the field of deep processing of wood and attracting Chinese investors to Russia. The woodworking industry companies hope to negotiate the lifting of the ban during the meeting. They expressed their readiness to provide the required certificates and conduct various tests and approval procedures in China.

 

At that time, Russian suppliers tried to contest the new rules and filed applications, but were unsuccess. And against the backdrop of sanctions, the opening of the large Chinese market became crucial for suppliers. Before the beginning of the conflict in Ukraine, the main export market for Russian pellets was Europe. Lack of major sales markets due to the closure of European markets, Russia's pellet production decreased by almost half between January and April to 431,000 tons (in 2022 by 19.6% to 2 million tons).

 

In a letter sent by the Arkhangelsk local council to Deputy Prime Minister Victoria Abramchenko on June 7, 2023, among other initiatives, a request for assistance in lifting the ban on the export of wood pellets (wood fuel pellets) to China was included. The ban began in September 2020, when the law on the environment on the prevention of solid waste pollution and its control was adopted. Market participants said, "In some way, the pellets are categorized as waste, whereas it can be argued that wood chips are allowed to be imported into China."

 

Nikolay Ivanov, Vice President of the Segezha Group, sees wood pellets as "a promising area of bilateral cooperation", where Russian factories will get a stable market and Chinese partners will significantly improve the ecological environment of their cities. The company executives said, "If the initiative is approved, the discussions will probably take place in July on a negotiating platform in China."

 

The Russian woodworking industry is hopeful that the government will recognize the importance of lifting export restrictions on wood pellets to China. Doing so would not only alleviate the surplus of wood chips and flakes but also provide a stable and lucrative market for Russian producers. The opening of negotiations and potential collaboration between Russia and China in the field of wood processing could have positive economic and environmental implications for both countries.

 


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About Kingwood

 

Kingwood located in Zhongguancun Industrial Park of Liyang City, Jiangsu Province, China. It is a high-tech enterprise dedicated to developing low-carbon, renewable energy equipment and advanced feed mill industry. Established in 1999, Kingwood has been providing a one-stop solution in biomass engineering, animal feed engineering, and spare parts business for our valued customers. Services of Kingwood include consultation, design, manufacture, logistic, installation, commissioning, training, and after-sales service for biomass/feed production line. Kingwood currently has ISO9000 and ISO14000 systems, certified by CE, and has won many awards in the biomass equipment industry. Kingwood currently has a large CNC punching center, a pellet machine assembly, a testing center, a large embryo forging base, a production line auxiliary equipment manufacturing base, a pellet production test center, and so on. Products are subject to strict quality control from raw material procurement, spare parts processing, heat treatment, welding, and assembly to finished product shipment. Kingwood stands for quality, service, and reasonable price - core values to which the company is committed.