Are the New ? A Global Threat Map of Development

There is a new and growing threat to the world’s forests, people and climate – the biomass energy . pellets are the major feeding this industry. This report outlines the evolution of this threat and maps its frightening expansion in scale and global extent now and over the next ten years.

Figure 1: Demand for industrial wood pellets exceeded 14 million in 2017. In the next decade, it is expected to more than double to over 36 million tonnes. The biggest increases are expected in Europe, Japan and South Korea. 1

© November 2018 A briefing by the , Climate and Biomass Energy working group of the EPN

Environmental Paper Network

Authors: Wolfgang Kuhlmann, Peg Putt Reviewers: Mandy Haggith, Debbie Hammel, Merel van der Mark, Peter Riggs and other members of the Forest, 1 The maps show the major exports and imports of industrial wood pellets. This does not include pellets produced and consumed in the same country, nor for domestic heating. Pellets can be made from agricultural by-products like Climate and Biomass Energy or palm kernel shells, but forest biomass dominates in both supply and demand. working group of the EPN 2017 data are based on available trade statistics. Where 2016 data was used, figures were adapted according to Contacts: changes in production and facilities. [email protected] 2027 projections are based on information about planned pellet mills and co-firing facilities and assumptions on the development of national policies regarding . Figures were cross-checked against projections by RISI, Future- wolfgang.kuhlmann@ Metrics or IEA. Different datasets may use different approaches, but they all concur that the use of wood pellets for the araonline.de production of energy and will more than double in the coming ten years. 1 Key Findings

1. Global supply of and demand for forest biomass is predicted to increase more than 250 % over the next decade, having already doubled in the last ten years. Biomass Delusion 2. Biomass energy, predominantly forest biomass, dominates ‘renewable’ energy production, dwarfing wind and solar and undermining their prospects by diverting a joint position subsidies that should be applied to such genuinely low emissions . statement 3. Countries in Asia are making the same mistakes that European countries made in encouraging large scale biomass burning for energy production. Japan and South It is important to consider the find- Korea are now heading down the same wrong that faulty poli- ings of this report in conjunction with cies enabled, namely subsidising generation from forest biomass and failing the underlying problems associated to count smokestack emissions resulting from wood burning. with production of biomass energy at large scale, especially its highly emis- 4. The majority of feedstock for the increasing pellet market will be supplied sive that threatens to exacer- directly from forests, inevitably entrenching and expanding at higher rates bate whilst promising over greater areas. This is in stark contrast to findings in the latest Intergovern- to provide a remedy. mental Panel on Climate Change Special Report regarding the urgency of protecting and expanding forests in the near term as critical for avoiding the worst impacts of The harm inflicted by biomass climate change. industry is outlined in the recently released #BiomassDelusion posi- 5. Growth in the industry is likely to occur by expanding supply from tropical, tion statement endorsed by over temperate and boreal forests in developing and developed countries, thereby 130 non-government organisations posing an escalating global threat to natural forest ecosystems including those that globally. are mega-diverse or carbon rich. The statement outlines that:

Large- scale burning of forest biomass for energy Introduction harms the climate n it is not low carbon n it is encouraged by flawe This report summarises the scale and global carbon accounting extent of a new and growing threat to the harms forests world’s forests, people and climate – the n it threatens and biomass . A global network climate resilience of civil organisations came together n it undermines the climate to map out the threat that this industry mitigation potential of forests poses. We have researched and collated the supply and demand dynamics to date and harms people over the coming decade. n it undermines rights and interests The acceleration of large scale burning of n it harms human health and wood in facilities for energy production is well-being the focus of our concern. We are not talking about traditional biomass, as used for harms the clean heating and cooking in many rural areas of n it provides a -line for the global South, nor are we focused here burning coal for energy on home heating based on community-level production wood supply. n it pulls investment away from other renewables Our focus is on the establishment and expansion of additional damaging forms of The signatory organisations are not bioenergy power: stand-alone generating seeking ‘improvements‘ in large- facilities that burn wood chips or pellets scale biomass energy through to create or combined heat and certification. Rather, we believe power (CHP), and conventional (usually coal) that we must move beyond burning power converted to burn a mixture of forest biomass to effectively address coal and wood pellets (known as co-firing). climate change. Foto: Dogwood Alliance Dogwood Foto:

2 1. The Burning Issue The biggest share of comes from forests – and its use is increasing

When asked about renewable energy, most people think of wind and solar. However, biomass power accounts for a greater share of energy production than these two ‘true’ renewables (see Figure 2). Solid 2 provide for 36 % of renewable energy (more than the combined share of wind, solar, tidal and ).3 Burning for biomass power is misleadingly classified by its supporters as a ‘clean’ and ‘carbon-neu- tral’ source of energy, when in fact biomass power creates major air problems at the site of combustion4, and exacerbates climate change through very high per-mega- Figure 2: In industrialised countries, more than half of all -hour releases of CO2 and other green- renewable energy is derived from agricultural crops and forests house gases.5

The use of forest biomass for electricity the function of forests Biomass burning also adds to social conflict and heat production has doubled globally is lost if trees are cut down to energy since in many locations it threatens the over the past decade (see Figure 3), from 30 demand. On top of this are the high levels of rights and livelihoods of indigenous and Gigawatt in 2007 to over 60 GW in 2017. The embedded emissions in pellet manufacture tribal peoples and local . biggest percentage increases were in Korea, and . Biomass burning can also deepen commer- and the UK.6 cial conflicts, competing for raw materials In addition to the climate impacts, biomass with forest-sector that rely on Ironically, these dramatic increases in burning exacerbates the biodiversity crisis sawn timber and wood fiber. bioenergy use are predominantly driven by because of the intensity of harvests desig- incentives intended to help reduce nated for energy use (described below). emissions, mostly by substituting wood for coal. Yet burning wood to generate energy emits even more carbon, on a per-unit-of-energy basis, than burning Figure 3: Globally, the use of forest biomass for electricity coal,7 while increasing harvest rates in and heat production has doubled over the past decade. forests depletes their capacity to act as sinks and degrades the world’s carbon stocks.

Consequently, biomass power represents a ‘doubly false’ solution – not only does it fail as a low-carbon energy source, but also

2 Solid biofuels mainly consist of forest biomass, but also include agricultural by-products like straw, palm kernel shells or , which remains when has been extracted from sugar . 3 IEA 2017: Renewables Informations 4 Mike Holland 2018: Covered in smoke: why burning biomass threatens European health, .org/report/ biomassandhealth 5 F. Cherubini et al. 2011: CO2 emissions from biomass for bioenergy: atmospheric decay and contribution to global warming, doi.org/10.1111/j.1757- 1707.2011.01102.x 6 IRENA 2018: Renewable Capacity Statistics 7 John Sterman et.al. 2018: Does replacing coal with wood lower CO2 emissions? Dynamic lifecycle analysis of wood bioenergy, Environmental Research Letters, http://iopscience.iop.org/article/10.1088/1748-9326/ aaa512/meta

3 Production, trade and consumption of forest biomass

As noted above, we are less concerned with However, the number of larger energy All this, even the whole trees, is defined issues of traditional biomass, or the use of production facilities (>100 MW) that as residues based on the lesser merchant- biomass for energy generation within the rely heavily on imported wood chips is able value per unit weight or when forest products sector. Many mills increasing. compared to the few high quality saw-logs burn wastes from chemical pulp production generated by the same logging operation. (black ) in biomass power plants.10 Understanding ‘residue’ The so called ‘residue’ stream can often By contrast, new bioenergy fuel demand is Large-scale forest biomass energy industry comprise the majority of the product arising increasingly met with feedstocks derived claims to be based on wood residues. The from a logging operation. The income directly from forests, in the form of wood popularly understood concept of wood resi- generated by high-intensity harvests based chips or wood pellets. The fastest growing dues is that they accrue in , where on quantity criteria may make more logging market segment of all is wood pellets traded less than half of the timber processed ends operations financially viable, as compared internationally. up in long-lived boards and beams.11 The to those operations constrained to take high in wood chips is in the ‘ residues’ are either burned on site quality wood alone. millions of metric tonnes annually, but offi- (for example, in wood-drying kilns), used In places where the community is struggling cial figures don’t make a difference between to produce fibreboard or other medium life to retain natural forests the advent of such pulp, composite wood products or energy composite wood products, or processed to a lucrative, incentives-based ‘residue’ trade feedstocks. Wood chips dedicated to energy short lived wood chips or pellets. can drive further logging incursions and generation have until recently been used Yet the scale of biomass energy production promote clearcutting as a logging method. primarily in small to medium scale energy dictates that the volumes of wood required applications, such as Combined Heat and Where logging is an accepted use at a cannot be supplied from such sawmill Power (CHP) or plants. lower intensity, the advent of high intensity wastes. Enormous volumes are taken direct harvests for biomass may lead to serious Their feedstocks are usually obtained region- from the forest as whole logs, limbs, tops or depletion of nutrients in the ecosystem and ally, especially if they are not near to a port. stumps. impede regeneration. Subsidised biomass is also implicated in undermining other forest 10 The Environmental Paper Network remains concerned 11 Sally Krigstin, Kaho Hayashi, Jacek Tchórzewski, about the expansion of pulping capacity and its impacts Suzanne Wetzel (2012): Current inventory and modelling product sectors. on forests and climate of sawmill residues in Eastern Canada, The Chronicle, 88(5), https://doi.org/10.5558/tfc2012-116

Firewood - a problem not only The industrial use of charcoal features in the global South high in Brazil, where it is one of the main sources of energy for the About 43 % of global renewable energy production of crude . Over the last consumption is attributed to “traditional six years, around 5 million tonnes of biomass”, i.e. the widespread non-com- charcoal were consumed annually.12 mercial use of for residential heating and cooking in developing Today, the wood used to produce - countries.8 coal mainly comes from plantations (approximately 90 % ), In developed countries the share of which have been established on sites wood going directly to energy is also previously comprised of native forests large. In the EU the non-commercial and other natural ecosystems. Such local use of firewood amounts to 129 conversion poses a serious range of million m³ per year (roughly 30 % of social and environmental problems, the annual harvest).9 Trade is basically in addition to the emissive impacts of limited to neighbouring countries. charcoal use in industry.

8 IEA 2017: 2017, https:// www.iea.org/weo2017/ 9 Nabuurs, G.J.; Arets, E.J.M.M.; Lesschen, J.P.; 12 Brazilian Institute of Geography and Statistics Schelhaas, M.J. (2018): Effects of the EU-LULUCF (IBGE), https://sidra.ibge.gov.br/pesquisa/ regulation on the use of biomass for bio-energy, https://www.wur.nl/en/Publication-details.htm?- pevs/quadros/brasil/2017 publicationId=publication-way-353338333338 Foto: Sini Eräjää Sini Foto:

4 2. The Biomass Delusion Wood pellet production and trade are escalating dramatically

Demand for industrial pellets is expected to to 55 million tonnes.16 Nearly 60 % of In North America, pellet production for more than double in the next decade to over production is exported, primarily by the nine export to Europe is devastating natural 36 million tonnes. While increases in Europe countries shown as ‘Suppliers’ in figure 1. ecosystems. Local consumption of wood may reach a maximum by 2020, major pellets is almost entirely for home heating International standard-setting bodies have growth is expected in South Korea, Japan, (‘pellet ’). developed consistent product specifications and potentially China. This is an extremely – qualities like moisture, The situation in Europe differs from country worrying trend, as the implementation of or particle size – establishing pellets as a to country. In Italy, Germany and Scandi- policies to increase this form of energy commodity that can be traded globally. navia, pellets are primarily used for heating, production is a misguided emulation of the while industrial use in energy production policies in Europe. Industry analysts are As shown in figure 4, Europe is still the dominates in the UK, Denmark and Belgium. discussing the rapidly growing demand in world’s biggest producer of wood pellets, In the Netherlands, co-firing of wood Asia and posing the question, will there be accounting for 49 % of global production. pellets in coal plants started in 2017 and enough biomass supply to meet it? 13 North America follows behind with 35 %. is expected to increase from 2018 on. In Despite the high level of production in At the same time, forecasts for the heating France, a conversion to co-firing is planned Europe, demand outstrips supply, and thus pellet sector in Europe and North America to prevent the closure of the remaining Europe is also the largest net importer of project a continuous increase of nearly coal power plants after the so-called coal biomass. The global pellet trade is domi- 1 million tonnes per year for the next ten ‘phase-out’ that is scheduled for 2022. nated at present by exports from the US and years. The market is expected to grow at Canada to Europe. There is also consider- approximately the same rate in all countries, able trade within Europe (primarily from the reaching 26 million tonnes in 2027. 14 Baltic countries), and from to the EU. This increased demand will have consider- Figure 4: able consequences for the world’s forests. 16 AEBIOM 2017: Pellet Market Overview Currently, production and consumption More than 60 million tonnes of pellets of wood pellets is highest in Europe, while large quantities are imported cannot and will not be produced from from North America. sawmill residues and post-consumer waste. Increasing the demand for forest biomass will further increase the area subject to logging and the intensity of that logging, thus increasing the degradation of natural forest ecosystems. In many cases this will escalate the conversion of intact forest - scapes into monoculture plantations or result in deforestation. Current situation

The international trade in forest biomass for energy is dominated by wood pellets. Production has more than quadrupled in the last ten years, reaching 29 million tons in 2016,15 while production capacity increased

13 www.hawkinswright.com/news-and-events/blog/post/ hawkins-wright-blog/2018/07/26/can-wood-pellet-sup- ply-keep-up-with-asian-demand 14 Canadian Biomass: Global pellet market outlook in 2018, www.canadianbiomassmagazine.ca/pellets/increas- ing-demand-6705; Hawkins-Wright: 2018 pellet market outlook, www.hawkinswright.com/news-and-events/ blog/post/hawkins-wright-blog/2018/01/17/2018-pel- let-market-outlook 15 Industrial and domestic pellets; AEBIOM 2017: Pellet Market Overview

5 Strangely enough, the main demand driver converting its generating capacity to true, in Europe is climate policy, specifically low-carbon renewable power. a flawed “Renewable Energy Directive” In Asia, has become the biggest (RED) that classifies forest biomass as a exporter of pellets in the region, primarily renewable energy source alongside wind supplying South Korea and Japan. These and solar. International policy and deeply countries are also supplied from Canada, flawed carbon accounting under the Kyoto the USA and Russia. Both South Korea and Protocol create a false impression of carbon Japan have copied the EU example – and the neutrality for energy from forest biomass, policy flaws associated with the RED and the thus putting it in direct competition with – by implementing policies energy sources, such as wind and solar, that that encourage the use of forest biomass. truly are carbon neutral. As in Europe, the Korean and Japanese From a ’s perspective, it is far easier governments have provided a variety of to co- wood with coal, or to convert subsidies to the biomass power industry – coal-fired power generators to burn forest subsidies that, in many cases, are not being biomass, than it is to embark on the path of made available for wind and solar projects. Forest biomass is emissive,

not carbon neutral Heighton Daniel Foto:

Burning biomass involves combustion of Yet time is of the essence when addressing and emits CO2 to the atmos- climate change. To meet the targets of the phere, just as burning does. Per , in particular to make our Conclusion unit of energy, burning biomass emits even best efforts to limit levels of warming to 17 more CO2 than burning fossil fuels. 1.5C, the carbon debt generated by burning forest biomass needs to be recovered We call this a ‘Threat Map‘ Two main arguments are used to claim that rapidly. Instead, where full regrowth occurs, because we believe that the global power from forest biomass is carbon neutral, it would be many decades before net zero is expansion of forest based power or zero emissions: reached, potentially after 2100. 19 generation is not a climate solution but n Tree or forest regrowth will subsequently represents a threat to climate, as well Further, there is no guarantee of full sequester an equivalent of carbon as as a threat to the world’s forests. regrowth and no one is checking up on it. initially emitted, thus netting out to zero Occurrences such as change and The last ten years have seen a doubling emissions. deforestation, or substitution of monoculture of biomass and a quadru- n If forest biomass comprises wastes or plantations for natural forests all deplete pling of pellet production. Alarmingly, residues that would otherwise decom- carbon in perpetuity and are not unusual. even more rapid growth is forecast pose, then emissions from burning are Serious loss of carbon also occurs as an for the coming decade – over 250 % equivalent to those that would have effect of logging. Intensified logging regimes increase in biomass demand. happened anyway, and not additional. for biomass supply often mean reduced rota- The wood pellet trade is at the heart tion times such that the forest never regrows There are significant problems with these of the biomass industry and is central to previous levels of carbon stock. assumptions. to the industry's global expansion Finally, any logging for biomass reduces plans, both in scale (extent of forests Burning emits carbon instantaneously, the amount of CO that forests would have impacted) and in geographical focus whereas of residues is 2 sequestered otherwise, and foregone CO (creation of long-distance supply slow. Forest regrowth will take decades to 2 sequestration has the same impact on the chains and expanding new centers of centuries. Meanwhile that carbon is in the climate as increased CO emissions. 20 consumption). atmosphere causing further warming, and 2 this occurs regardless of whether forest We hope this will be a wake-up call is ‘sustainable’. 18 to those governments that are subsi- dising coal to biomass conversions; will persuade investors that financing 17 Duncan Brack 2017: Woody Biomass for Power and Heat, 19 John D Sterman et al. 2018: Does replacing coal with Chatham House, https://www.chathamhouse.org/ wood lower CO2 emissions? Dynamic lifecycle analysis of biomass power is not sustainable; and publication/woody-biomass-power-and-heat-impacts- wood bioenergy, Environ. Res. Lett. 13, http://iopsci- will persuade energy analysts, retailers global-climate ence.iop.org/article/10.1088/1748-9326/aaa512/meta This is in no way a justification for continued 20 Brack, Duncan. The Impacts of the Demand for Woody and consumers to distinguish forest energy usage, which needs to be rapidly phased out in a Biomass for Power and Heat on Climate and Forests. just and equitable manner. Chatham House. February 2017. chathamhouse.org/ biomass, as a high-carbon renewable 18 Letter from Scientists to the EU Parliament Regarding publication/impacts-demand-woody-biomass-power- energy , from lower-emitting Forest Biomass, updated January 2018, dropbox. and-heat-climate-and-forests com/s/l8sx5bl0h02x395/UPDATE%20800%20signa- technologies like wind and solar. tures_Scientist%20Letter%20on%20EU%20Forest%20 Biomass.pdf?dl=0 6