In the face of the consequences of climate change, the need for clean energy is increasing.
“In order to examine global challenges regarding energy, climate change, ecological impacts, technology developments and sustainable use of land and natural resources in the upcoming circular bioeconomy era, improved analysis tools are required”, PhD candidate Rafal Chudy explains.
EU’s ambitious targets
EU’s countries have set targets for 2020, 2030 and 2050 about reducing greenhouse gas emissions.
In 2018, the European Union Parliament voted to increase the renewable energy goal for 2030 to a new target of 35% of total energy use. The European Parliament also agreed on increasing EU’s energy efficiency target to a minimum of 35%, and moved to ensure that 12% of the energy consumed in transport comes from renewable energy sources.
Forest sector expectations
EU’s climate policies aim to send a strong signal to the market, encouraging private investments, low-carbon technologies and electricity networks. Biomass is an essential renewable energy source in reaching EU’s long-term decarbonization objectives.
“The forest sector is expected to make significant contributions towards meeting these green economy objectives,” Chudy comments.
He has investigated the impacts of increased use of wood-based bioenergy on forest resources and markets of forest and wood products, and explores the strengths and weaknesses of forest sector models.
Impacts of second-generation biofuel
Chudy has in one of the four papers in his phD thesis examined the impacts of establishing a wood-based second-generation biofuel plant in, including the impacts on trade and the wood markets. His focus was on harvest, timber net import/export, and forest industry production.
“My results show that choice of feedstock has an important effect on industrial impacts.”
Mix of softwood and hardwood chips most economic
The most economic biofuel feedstock mix was dominated by softwood chips, which in the model analysis comprise 48% of total inputs by 2030 and increase in use up to 67% by 2055. The second largest component used for second-generation fuel production is hardwood chips (i.e. birch).
The proportion of harvest residues remained constant over time around 18% of the wood input, and roundwood was not used at all for biofuel production. “Despite the additional demand for chips, I found that a new single medium-scale biofuel plant would only have minor effects on existing forest industries and harvests in Norway, as the domestic impact is dampened by changes in foreign trade flows.
Increased carbon storage
Chudy also analyzed the effects of EU’s wood pellets imports from the Southeast U.S. (henceforth,
SE) on SE timber prices, inventories, and carbon sequestration. His analyses show that with the assumed bioenergy demands, prices for U.S. softwood and roundwood could increase from 25% to 125% by 2038, depending largely on U.S. domestic policy. Carbon storage also increased.
“This increase is due to a increased planting among private forest owners to higher timber prices and due to a conversion of marginal agricultural land to forest,” Chudy explains.
“At low EU’s pellet import demand levels, the impacts of woody biomass from forests does not have large effects on timber markets and might even encourage carbon storage and planting of more forests.”
Biofuels or heat?
“Policy choices might have strong impacts on the allocation of biomass use between heat and power production, and the production of liquid biofuels.”
Chudy’s projections suggest that the European forest industry production is not expected to be much affected by the increased competition for biomass with the energy sector.
“This is because the rivaling regions would be facing similar biomass demand challenges and the relatively abundant wood biomass resources in Europe would help the forest industry in EEA to maintain its market shares.”
Impact of prices on management
Chudy has also examined the impact of carbon prices on forest management and marginal abatement cost curves in Europe.
“My results indicate a decreasing area assigned to partial harvesting and inceased area of clearfelling with increasing carbon prices,” Chudy says.
“The average age of clearfellings increases with increasing carbon prices, but the increase is rather small compared to a baseline scenario with zero carbon price, only 2-3 years.”
With a carbon price of 100 €/tCO2 and use of 3% p.a. discount rate, there is a possibility to sequester around 20% more carbon annually than in the baseline scenario due to changed forest management across Europe.
Risks in modelling
How can risks best be incorporated into forest sector modelling? Chudy’s analysis shows that there are many options for incorporating risk in model analyses, but only a few have been applied in forest sector modelling exercises.
“Many of the proposed methods are too demanding with respect to data availability and computer capacity to be applicable in large-scale numerical forest sector models.”
Policies are important
Regardless of assumed levels, bioenergy policies are important for the forest sector, and this situation is likely to prevail. Although most policies are tailored for specific geographical areas and have a direct impact on them, the results of this thesis show that such policies may unintentionally affect forest resource utilization and markets in other regions.
Chudy’s analyses did not show any overall dramatic effects on existing forest markets and industries created by new market actors and policies.
“Contrary, the markets adjust to and soften the effect of policy changes by synergies, competition, and trade.”
He further underlines that policy makers must have very clear goals for the preferred ways to solve the shift from the present fossil fuel-based energy system to a less carbon-intensive one.
“They also need to consider the market mechanisms that happen across regions.”