Investigating a Connection between European Wood Pellet Demand and Harvesting Patterns in the South East United States

Abstract

Challenging targets for renewable energy generation across Europe has led to increasing demands for biomass. Biomass plays a key role in European renewable energy, providing 46% of all renewable energy across Europe in 2013, predominantly through wood energy. Wood pellets have become an important traded biomass commodity in Europe, where consumption of wood pellets reached over 20 million tonnes in 2014. Many European countries are able to meet their biomass demand domestically, however increasing volumes of wood pellets are now traded both within the EU and imported from outside the EU. The United States is the largest producer of wood pellets globally and the biggest trading partner to the EU, providing 20% of European wood pellet demand in 2014. Much of this production is located in the US South, where there is an annual production capacity of 8 million tonnes of wood pellets.Wood pellet production is linked to other forest industries, with forty per cent of wood fibre for pellets derived from sawmill residues, so it is logical for pellet production to be located in areas with active forest industries. The US South is a major hub of wood production, harvesting over 224 million tonnes of wood in 2014, 5.4 million tonnes of which was fibre for wood pellets. Markets play an important role in harvesting decisions, specifically the value of different wood products. Sawlog harvesting (as the most valuable product) is very responsive to changes in pricing, as seen through the decline in harvesting as sawlog value dropped between 2005 and 2009. The value of pulpwood increased significantly between 2011 and 2014, with softwood and hardwood pulpwood prices increasing by 63% and 160% respectively. However, in response to this significant increase in value, harvesting increased only by 6% for softwood and 3% for hardwood, suggesting that pulpwood value is not a significant enough driver to influence changes in harvesting. The insensitivity of pulpwood harvesting to changes in value suggests that wood pellet demand is unlikely to drive changes in harvesting, however could potentially encourage more positive management of forests through providing a market for low value material. Further work should be carried out to consider the potential for woody biomass demand to influence forest management and recommendations should be proposed on how the impacts of this could be measured.

Date of Award	31 Dec 2016
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Patricia Thornley (Supervisor) & Paul Gilbert (Supervisor)