Biomass markets in EU are expected to push US reforestation programs for timber and pellets in Southern states, USDA Forest service found.

A recent report from the Forest Service and Southern Research Station of the United States Department of Agriculture (USDA). The authors expect that Non-sawtimber feedstock prices continue to rise through the end of the projected increase in pellet demand (2020), and then fall as additional timberland is converted from marginal agricultural land, leading to eventual relative increases in inventory.

Forests in US have an amazing potential. IRENA reported recently that  the lower end of the supply potential for the US could be approximately 18.9 EJ by 2030. The higher end is estimated at 22.7 EJ, including 7.5 EJ of biomass crops on surplus agricultural land or wood/grasses crop potential on marginal land; an additional 7.2-7.4 EJ of forestry residue biomass resulting from logging/forest thinning operations; agricultural crop residues as well as food and animal waste up to 7.8 EJ by 2030. Total biomass supply potential in the US is about 15-20% of the total global biomass supply potential of 95-145 EJ (IRENA, 2014c). If all the US biomass supply potential was to be deployed, about 20% of the US total primary energy supply today would be provided by bioenergy.

Additionally, even assuming full utilization of mill residues and increased utilization of logging residues, harvest of pine and hardwood non-sawtimber feedstock increases. Under these assumed demands, hardwood harvest levels remain low enough that hardwood inventories continue to increase, although these end at lower levels than under the baseline scenarios (those modeled without new bioenergy demands). Increased pine harvest leads to increased investment (planting), which leads to ending inventory levels that are higher than under the baseline.

There would be shifts in harvest among subregions and shifts in production from traditional wood products to pellet production.

The demand for wood-pellet fuel is expected to put increasing demands on forest in the South, according to a December 2014 report from the US Forest Service. The report concludes, “The combination of increased pellet feedstock demand, the age class distribution of inventory, and the inelastic supply response of landowners to a change in price have led to increased pellet feedstock prices and increased harvests in the U.S. South.”

Timberland area increases with an increase in demand for feedstock for pellets as more plantations are established on marginal agricultural land (assuming that forest land rents increase with increases in non-sawtimber feedstock prices, and that changes in land use are tied to forest land rents).

Authors claimed that “If we extrapolate these simulation results to a demand scenario where pellet demand continues to increase beyond 2020, we would expect the simulations to show prices remaining high or continuing to increase, and would show timberland area, harvest, and logging residue use for pellets continuing to increase”.

Two reports from Environmental Defense Fund, in conjunction with colleagues at the Pinchot Institute for Conservation and the University of Toronto, examine economic, environmental, and public health impacts from the expanding wood pellet market. European Power from U.S. Forests (download report PDF) documents how the EU policy is shaping the transatlantic trade in wood biomass. For the U.S. export market to benefit from the large potential capacity for pellet production, producers in the U.S. will need to meet or exceed sustainability standards of the EU and individual European countries. Some type of forest management or pellet supply chain management system (e.g. forest management certification and/or chain-of-custody certification) is likely to be required.