Sustainability guidelines and forest market response: an assessment of European Union pellet demand in the southeastern United States.

Woody biomass from the southeast United States is expected to play an important role in meeting European Union renewable energy targets. In crafting policies to guide bioenergy development and in guiding investment decisions to meet established policy goals, a firm understanding of the interaction between policy targets and forest biomass markets is necessary, as is the effect that this interaction will have on environmental and economic objectives. This analysis increases our understanding of these interactions by modeling the response of southern US forest markets to new pellet demand in the presence of sustainability sourcing or harvest criteria. We first assess the influence of EU recommended sustainability guidelines on the forest inventory available to supply EU markets, and then model changes in forest composition and extent in response to expected increases in pellet demand. Next, we assess how sustainability guidelines can influence the evolution of forest markets in the region, paying particular attention to changes in land use and forest carbon. Regardless of whether sustainability guidelines are applied, we find increased removals, an increase in forest area, and little change in forest inventory. We also find annual gains in forest carbon in most years of the analysis. The incremental effect of sustainability guideline application on forest carbon and pellet greenhouse gas ( GHG) balance is difficult to discern, but results suggest that guidelines could be steering production away from sensitive forest types inherently less responsive to changing market conditions. Pellet GHG balance shows significant annual change and is attributable to the complexity of the underlying forest landscape. The manner by which GHG balance is tracked is thus a critical policy decision, reinforcing the importance and relevance of current efforts to develop approaches to accurately account for the GHG implications of biomass use both in the United States and European Union. [ABSTRACT FROM AUTHOR]