In ruling N326984 (August 2, 2022), Customs and Border Protection (CBP) discussed the tariff classification of torrefied wood pellets from Vietnam. The pellets under consideration consist of agglomerated, powdered wood by-products – which include sawdust, sawmill waste, wood manufacturing waste, and tree waste. The powdered wood is agglomerated under heat and pressure. The pelletized material is then subject to torrefaction, which means that the pellets are heated to 200 – 300 degrees Celsius in a limited oxygen environment. The pellets are cylindrical in shape and measure less than 10 mm in diameter and 40 mm or less in length. The pellets are used as a fuel source and can be burned alone or mixed with coal to reduce CO2 emissions.
For background, torrefaction is the thermochemical process of heating biomass at a relatively low temperature without oxygen in order to degrade the hemicellulose content of the wood. Torrefaction improves the water resistance, grindability, and combustibility of the wood pellets. Torrefied pellets are different from charcoal in that charcoal is carbonized. Carbonization is destructive distillation that takes place in higher temperatures than torrefaction (at about 400 – 600 degree Celsius), leaving porous carbon as residue.
CBP in its analysis notes that the Explanatory Notes to the Harmonized System for heading 4403, Wood charcoal, state that “Wood charcoal is obtained when wood is carbonised out of contact with air.” As noted above, torrefaction is different from carbonization, and as such the pellets cannot be under heading 4403. CBP next looked at subheading 4401.31. Customs notes in its ruling that Subheading Note 1 to Chapter 44 of the Harmonized Tariff Schedule of the United States (HTSUS) defines wood pellets as the following:
“For the purposes of subheading 4401.31, the expression ‘wood pellet’ means by-products such as cutter shavings, sawdust or chips, of the mechanical wood processing industry, furniture-making industry or other wood transformation activities, which have been agglomerated either directly by compression or by the addition of a binder in a proportion not exceeding 3 percent by weight. Such pellets are cylindrical, with a diameter not exceeding 25 mm and a length not exceeding 100 mm.”
CBP found that the pellets under consideration fit this definition. As such, the applicable subheading for the torrefied wood pellets would be 4401.31.0000, HTSUS, which provides for “Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; wood in chips or particles; sawdust and wood waste and scrap, whether or not agglomerated in logs, briquettes, pellets or similar forms: Sawdust and wood waste and scrap, agglomerated in logs, briquettes, pellets or similar forms: Wood pellets.” The rate of duty is free.