Renewable energy and the Forest-based Industries
Climate and energy issues are becoming increasingly interconnected. This is reflected not only in the emergence of ministries for climate and energy in a number of EU Member States but also in the publication of the EU Climate and Energy Package, which was proposed in early 2008.
Included in that set of proposals were measures addressing climate change, as outlined above, as well as a series of others addressing, such as: energy security, energy efficiency, energy saving and the increased use of renewable energies. With regard to the latter, a comprehensive piece of legislation has been developed and recently adopted. This seeks to draw together previously disparate pieces of EU legislation, mostly directives, concerning different aspects of renewable energy and its use. It is known colloquially as the Renewable Energy Directive ( Directive 2009/28/EC [1 MB] of the European Parliament and of the Council of 23rd April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC).
Its key elements are as follows:
- Renewable energy sources will have to provide an average of 20% of all final energy consumption by the year 2020, with binding national targets.
- While the RES mix for meeting the targets may vary, Member States must present a National Renewable Energy Plan (NREAP) by June 2010, indicating how they will secure adequate renewable energy sources.
- Member States are being encouraged to complete a biomass template as part of their NREAPS, which seeks to help them examine their supplies of (domestic and imported) biomass as well as uses of biomass from the three main sources: the forest-based sector, agriculture and municipal waste.
The implications of this Directive for a further increase in the use of biomass, especially wood, are potentially enormous, although it is foreseen that the other two sources of biomass should expand proportionately more than wood-based energy in the long term. Nonetheless, over the next few years the Directive will become highly relevant to the forest-based industries.
Since forest-based industries use large quantities of wood, its availability at a competitive price is key to their performance. Wood is the highest cost for many of these industries. In paper-making, more than 30% of total costs are for wood; in the sawmill industry this runs up to 65 - 70%. Increased competition for woody biomass from the energy industry has already given rise to tighter supply and higher wood prices in many regions, especially in central Europe, where plant catchment areas overlap. Therefore, it will be increasingly important to promote more domestic wood supply and avoid restrictions on the export of wood to the EU.
The growing demand for renewable energy continues to increase competition for wood, especially for that used in the wood-based panel and pulp sectors. Increased demand is not always matched by a corresponding supply increase, which leads to higher costs, as stated in the Communication on Innovative and Sustainable Forest-based Industries in the EU. According to UNECE-FAO, the projected fibre demand is considerably higher than the supply forecast so far.
Several studies have identified a likely gap between future EU wood supply and the growing demands of both the forest-based and energy industries. Of these, work by the UNECE, based on the Joint Wood Energy Enquiries, is perhaps the most independent and has the advantage of results both from the wood supply and energy demand sides. According to this work, even assuming a lower level of wood in total biomass, reaching renewable energy sources targets would create a gap between supply and demand of up to XXXMm³ by 2020. Given this potential shortfall, a sustainable supply of wood raw material to the forest-based industries should be facilitated, better matching supply and demand, and taking due account of their needs when Member States draw up their NREAPS.
The supply of wood raw material for the industry as well as for the energy sector can be enhanced through a series of measures which have been developed by Commission-run working groups. The possible gap between supply and demand could be mitigated both through short- to medium-term measures, such as rationalising fragmented forest ownerships, improved logistics for harvesting and marketing wood and closer co-operation between forest owners and industry, and in the medium to long term through active and dynamic sustainable forest management policy, including a further increase in the total forest area via greater afforestation, as well as higher productivity, enhanced reforestation and better silviculture.
However, the increasing competition for wood as a raw material is not just about competing end-uses and, in considering how to increase wood supply, account also has to be taken of considerations in different policy areas, such as biodiversity, recreation and the other social and cultural functions of forests.
Not all the implications of the Renewable Energy Directive are negative for the forest-based industries. Already, about half of the primary energy used is produced by these industries from wood biomass. In sawmills and wood panels there is also high energy self-sufficiency for heat, though electricity often comes from external suppliers. Chemical pulp mills can be net energy producers, especially when not integrated with paper production. Conversely, mechanical pulp and paper production are largely dependent on external electricity and gas.
Today and increasingly in future, forest-based industries will play an important role as providers of heat and electricity and producers of wood-based bio-fuels, by becoming "bio-refineries", able to switch production according to varying feed-stock supplies and output demands, thus contributing to more efficient use of wood both for energy and forest products.