There has been a significant increase in the use of wood pellets for energy in the past decade due in large part to their climate mitigation potential. Because of this, the demand for wood pellets is largely driven by policy, as well as socioeconomic development, making projections of future wood energy markets highly uncertain. The aim of this study is to provide projections of future wood energy market trends under five distinct socioeconomic scenarios based on the assumed future evolution of gross domestic product, population, technological change, trade openness, and bioenergy preferences using the FOrest Resource Outlook Model. In four out of the five scenarios considered, it is projected that the use of roundwood and mill chips, particles, and residuals will rise in order to produce a growing output of wood pellets in the United States and globally. In terms of international markets, the global dominance of Europe’s demand for wood, to help that continent achieve its own climate goals, further explains the sustained and growing supply position of the U.S. South regions to meet that demand. Taken together, the projections suggest emerging bioenergy markets will drive increased competition for inputs with other manufacturers, particularly in the U.S. South regions.

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Using a partial equilibrium model of the Swedish forest sector, this study analyzes the impacts of an increasing bioenergy production on the timber harvest and forest growing stock. The impacts on the carbon balance of forests are also examined. The results suggest that, when compared withthe base scenario, in which the current use pattern of forests continues, increased bioenergy production will lead to a 10–14 million m3 (Mm3) increase in the total harvest, depending on the extraction rate of forest residues. Increasing the use of forest residues will reduce the harvest and leave more room for accumulation of the forest stock in the early years,while the stock accumulation will be partially offset by the increased timber harvest in the long run. Increasing bioenergy production will have a negative impact on the carbon balance primarily due to a net loss of carbon stored in forests. Overall, the joint contribution of forest-based mitigation is significant, equivalent to or higher than 65% of the country’s annual GHG emissions. To achieve an ambitious bioenergy target in thelong run, a fraction of pulpwood will be consumed as fuelwood that will inevitably intensify the competition between the two timber products, though increasing the use of forest residues could slightly reduce the competition in the short run.

Forests can contribute to climate mitigation through the use of harvested wood products (HWPs), which provide a significant long-term source of carbon sequestration, replacement of more emissions-intensive building materials, and the integration of forest biomass into bioenergy systems. However, knowledge gaps remain regarding the interplay between HWP carbon flows, traditional forest product market developments, and climate policy developments incentivizing bioenergy and carbon sequestration in forestry at global scales. Information on the extent to which future policy and market developments can impact global carbon fluxes in wood product pools is needed for guiding policy design and quantifying longer-term tradeoffs between carbon stock preservation in forests and increased carbon sequestration in wood products. This study builds on projections from a forest model inter-comparison analysis of three global forest sector models to estimate the potential carbon pool in HWPs across various socioeconomic scenarios and levels of greenhouse gas (GHG) policy ambition. Further, we assess the extent to which the use of bioenergy, paired with carbon capture and storage, can enhance this forest carbon sink. In scenarios with higher levels of global timber production, even in scenarios with fossil-fueled economic growth, we see an increase in carbon stored in wood products used for housing materials, lumber, pulp, and paper products. However, climate policy stringency reduces the HWP sink, shifting C sequestration to forests and allocating harvests to bioenergy systems. The use of carbon capture and storage substantially increases the global HWP carbon sink. The results of this study highlight how economic and policy factors could impact the role of global forests in climate mitigation through carbon storage in long-lived wood products and bioenergy carbon capture and storage pools, providing new insight to policy-makers, forest managers, and forest product manufacturers on viable pathways to support the co-production of timber and carbon sinks.