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Renewable Energy Policies in the European Union Influencing Timber Markets and Forests in the Southern U.S.

Photo of The Enviva Corporation wood pellet mill, Northampton, NC. The South is now the largest wood pellet producing region in the U.S., and this industry is forecast to continue to expand over the next few years. Nearly all (99 percent) of these pellets are being exported to the European Union to burn for electricity.  USDA Forest ServiceThe Enviva Corporation wood pellet mill, Northampton, NC. The South is now the largest wood pellet producing region in the U.S., and this industry is forecast to continue to expand over the next few years. Nearly all (99 percent) of these pellets are being exported to the European Union to burn for electricity. USDA Forest ServiceSnapshot : Forest Service scientists Karen Abt and Ken Skog, with their university collaborators, evaluated the status and outlook of the export of wood pellets from the southern U.S. The primary driver of the pellet demand is the Renewable Energy Directive of the European Union and wood pellets made in the southern U.S. are being shipped to the European Union for burning to generate energy in a bid to reduce greenhouse gas emissions and increase renewable energy use. Both softwood and hardwood pulpwood are being used to make pellets, leading to increased pulpwood harvests and prices.

Principal Investigators(s) :
Abt, Karen Lee 
Research Location : Research Triangle Park, North Carolina
Research Station : Southern Research Station (SRS)
Year : 2015
Highlight ID : 925

Summary

Current policies in the European Union (EU) requiring renewable and low greenhouse gas-emitting energy are driving up the demand for wood pellets imported to the EU and burned for energy. This demand provides new markets for U.S. timber exports, increases timber prices, and could even foster conservation of southern forests. Timber markets in the southern coastal region of the were simulated through the year 2040, using both a “business as usual” scenario and an alternative scenario where the production of feedstock for wood energy was increased. This alternative scenario accounted for continued wood energy demands based on the most recent projections of wood consumption by pellet mills and other bioenergy producers. The baseline simulations showed a continuation of current trends in prices, inventory, and removals and also projected that timberland area would decrease. The wood energy scenario, on the other hand, showed that increases in harvest and prices can lead to smaller declines in timberland area and keep inventories higher. The responses in each of the three coastal subregions evaluated also showed that increased demands for wood energy were likely to lead to increased pulpwood prices, which has the positive effect of helping keep land forested as well as the negative effect of increasing costs to conventional timber users.

Forest Service Partners

External Partners

 
  • Nicholas Institute, Duke University
  • North Carolina State University