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A recently released study led by U.S. Forest Service scientists and published by the Forest Service’s Southern Research Station (SRS) finds that policies in the European Union (EU) and elsewhere requiring the use of renewable and low greenhouse gas-emitting energy are driving demand for wood pellets used to generate bioenergy. This demand could provide new markets for U.S. timber exports, increase wood prices, and lead to increases in forestland area.

Karen Abt, research economist with the SRS Forest Economics and Policy unit is the lead author of the report. “Southern forests and some northern forests as well, are being used to produce pellets for export to the EU,” she said. “Current and proposed production levels have the potential to increase prices, but may also lead to an increase in timberland area.”

Abt and her team used a computer model to simulate timber markets in the U.S. Coastal South through the year 2040. “We modeled a ‘business as usual’ scenario which continued the current level of wood production,” she said, “and an alternative scenario which increased the production of wood bioenergy.” This alternative scenario accounted for continued bioenergy demands based on the most recent projections of wood consumption by pellet mills and other bioenergy producers. These projections include all announced bioenergy wood demands, and while actual demands will likely be lower, there is considerable uncertainty in the bioenergy market.

In the “business as usual” baseline scenario, the simulation showed timber demand and prices rising in the short term, but falling in all areas across the South by 2040. However, when Abt’s team added the bioenergy component to the baseline, they saw a very different outcome. “Based on our assumptions, the results indicate increased bioenergy demand could result in an increase in pine non-sawtimber prices,” said Abt.

From PHYS.org: http://phys.org/news/2015-01-renewable-energy-policies-production-southern.html