Deliver Benefits to the Public

Increases in biomass demand could affect future wood industry

Truck load of timber
The model’s high demand scenario projected that the South could experience the bulk of changes to forestland and for wood product suppliers — with the region providing about 77 percent of the wood needed. USDA Forest Service photo by Cecilio Ricardo.

NORTH CAROLINA – Many studies predict that more wood will be used for bioenergy in the future, which could affect that industry and the conventional wood products industry on many levels.

A team led by USDA Forest Service cooperator Prakash Nepal, along with Southern Research Station research economist Karen Lee Abt and Forest Products Laboratory research forester Kenneth Skog modeled the potential competition between wood products and wood-based bioenergy in the future. Their findings were published in Forest Science.

This analysis is important, because increased demand for biomass could have a ripple effect in the wood market. “If you use more wood for biomass energy, the traditional users have to go elsewhere to get their wood,” said Abt. “Production of wood products would decline and use of timber resources would change because we’re using some of that wood for biomass energy.”

The team created a statistical model to account for wood use in the American economy, based on historic data. “For our model, we split the U.S. into three regions: South, North and West,” explained Nepal. “Our model only deals with competition between the industries in those regions, which allowed us to analyze national and regional wood market effects of increased biomass demand.”

The scientists applied the model twice: once with normal projected values for wood biomass demand, then again with a higher wood biomass demand. Both times the model projected economic effects up through the year 2050.

Using the model results, the researchers contrasted economic effects of increased biomass demand with the effects of a baseline biomass demand.

The team found that even in a scenario in which biomass demand was higher, the relative contribution of each region — South, North and West — in providing wood used for biomass energy did not change notably. However, timber harvesting rates in these regions could increase by as much as eight percent.

There were other projected increases, as well. Timber prices could increase by as much as 31 percent due to the increased wood demand. Timberland area could increase by as much as one percent, or approximately 12 million acres, to support the demand.

These changes could affect U.S. forests in unexpected ways. Increased forestland prices, due to the increased economic value of the trees, could prevent some forests from being converted to other uses. On the other hand, the high economic value of trees due to increased biomass demand could be an incentive for people to purchase forestland and harvest more trees.

“We’re working at a pretty broad scale with these models,” said Abt. “We quantified a number of variables, but because these are models, the quantification is mostly for comparative purposes. It shows a general projected decrease or increase in things, which is useful.”