Francisco X Aguilar, Ph.D. Department of Forestry The School of Natural Resources University of Missouri, USA

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1 UNECE/FAO Policy Debate on Wood Energy 8 May 2012 Palais des Nations, Geneva Francisco X Aguilar, Ph.D. Department of Forestry The School of Natural Resources University of Missouri, USA

2 Status and Trends in Wood Energy Regional shares: total energy, renewables, per capita Sources and energy sectors Trends by sector International trade Key influential factors Public policy

Wood Energy: Renewable Feedstock Primary (Direct):

treatments); Fuelwood extracted from forestlands

processing mill co-product and pulping liquors

3 Wood Energy: Renewable Feedstock Primary (Direct): Logging co-products; Removal of excess biomass (fuel treatments); Fuelwood extracted from forestlands Secondary (Indirect): Primary and secondary wood processing mill co-product and pulping liquors Tertiary (Recovered): Urban wood residues Dedicated: Energy plantations

4 One short ton of wood pellets equals 4,775 kilowatt hours (kwh) electricity 120 gallons (~454.3 liters) of heating oil 170 gallons (643.5 liters) of propane 16,000 ft 3 (~453 cubic meters) of natural gas Paying $200/short ton = $0.04 kwh electricity 1 short-ton= metric tons Source: Massachusetts Division of Energy Resources

5 Wood Energy Markets: Status EU is the largest wood energy market Canada and the USA remain the major suppliers of woody biomass feedstocks to the EU Industrial pellets dominate international trade Wood chips, sawdust primarily used in local markets

6 Wood Energy Share of TPES (2009) JWEE Total 3% Sweden Finland Estonia Austria Serbia Lithuania Liechtenstein Czech Republic Slovenia France Italy Germany Switzerland Norway Slovak Republic Russian Federation United States Belgium Ireland Cyprus United Kingdom 1% 1% 1% 1% 4% 4% 3% 3% 3% 3% 2% 2% 6% 6% 6% 8% 11% 13% 16% 19% 19% 0% 5% 10% 15% 20% Source: UNECE/FAO Joint Wood Energy Enquiry TPES =Total primary energy supply, (ktoe)

Wood Energy Share of Renewables (2009) JWEE Total 47% Serbia Estonia Czech Republic Russian Lithuania Finland Liechtenstein Sweden France Austria United States Slovenia Slovak Republic Germany

7 Wood Energy Share of Renewables (2009) JWEE Total 47% Serbia Estonia Czech Republic Russian Lithuania Finland Liechtenstein Sweden France Austria United States Slovenia Slovak Republic Germany Italy Belgium Ireland Switzerland United Kingdom Cyprus Norway 7% 27% 23% 18% 16% 15% 54% 51% 47% 45% 44% 40% 38% 36% 81% 88% 79% 79% 0% 25% 50% 75% 100% Source: UNECE/FAO Joint Wood Energy Enquiry

Average wood energy consumption (m3/capita) 6 Per Capita Average Wood Energy 5.6 Consumption (2009) 5 4.4 4 3.3 3 2.

8 Average wood energy consumption (m3/capita) 6 Per Capita Average Wood Energy 5.6 Consumption (2009) Source: UNECE/FAO Joint Wood Energy Enquiry

9 Wood Energy Sources JWEE total (2009) Recovered 3% Unspecified <1% Direct 39% Indirect 58% Total wood energy generation: 595,682 (1000 m 3 ) Source: UNECE/FAO Joint Wood Energy Enquiry

10 Wood Energy Uses JWEE total (2009) Residential 39% Other 3% Power and Heat 20% Industrial 38% Total wood energy generation: 595,682 (1000 m 3 ) Source: UNECE/FAO Joint Wood Energy Enquiry

11 Wood Energy Consumption by Sector (USA) Other Industries 1% Residential 20% Industrial 68% Pulp and Paper 55% Power 9% Commercial 3% Wood Manufact. 12% Source: US Energy Information Administration

12 Medium Density Fibreboard Particleboard Oriented Strand Board Softwood plywood Softwood lumber Annual energy consumption (PJ) Wood Energy Consumption by Selected Sectors of the Wood 60 Products Industry (Canada) Other energy Biomass energy Source: FP Innovations (Canada)

13 Power Plants and Biomass (Contiguous USA) Source: U.S. Department of Energy Power plant Power plant using biomass

14 Wood Energy Markets: Trends

15 Wood Energy Markets: Trends Global wood energy markets expected to grow driven primarily by EU s 2020 commitment Trends for wood energy use vary by sector Wood energy use dominated by power generation heavily influenced by public policy Wood energy consumption greatly dependent on production by pulp & paper and wood manufacturing industries Residential sector, although a significant sector, most likely to stay flat

Million kwh Biomass Energy Consumption by Sector and Source (USA) 500,000 450,000 400,000 350,000

(Biomass) Transportation liquids from biomass Electric power (Biomass) million kwh Dedicated

16 Million kwh Biomass Energy Consumption by Sector and Source (USA) 500, , , , , , , , ,000 50, Residential Industrial (Biomass) Transportation liquids from biomass Electric power (Biomass) million kwh Dedicated plants Source: Annual US Energy Outlook - Early Release, U.S. Energy Information Administration (2012)

17 Million metric tons of pellets* Estimated European wood pellet demand *5% moisture content Source:

18 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 Imports by EU-27 of Fuelwood and Woody Residues, (as reported by EU-27) = Fuelwood = Residues (including pellets) $ Source: COMTRADE UN

19 Prices (euro/mt) Industrial Wood Pellet Prices APX-ENDEX M+1 Q+1 Y Source:

Wood Energy Forecast: Key Influential Factors Public policy Renewable Portfolio Standards (EU 2020) Treatment of Biogenic Emissions Financial

20 Wood Energy Forecast: Key Influential Factors Public policy Renewable Portfolio Standards (EU 2020) Treatment of Biogenic Emissions Financial incentives Global markets: Expected growth in demand from Asia Pulp & paper, wood manufacturing industries Fossil fuel prices: Oil and natural gas in particular

21 Wood Energy Forecast: Public Policy Power production has increased notably with encouragement of renewable fuels targets and financial incentives Residential wood energy consumption inversely linked to competing energy prices A 1% increase in non-wood energy prices results in: 1.55% increase in USA household wood energy consumption 2.30% USA rural households

Wood Energy Forecast: Demand in Asia South Korea: RPS for power generation: 2012 2% Increase ~ 0.

22 Wood Energy Forecast: Demand in Asia South Korea: RPS for power generation: % Increase ~ 0.5% annually until % Biomass energy target for 2020: 4.2 million tons of oil equivalence Pellet equivalent: 10 million tons Japan: Alternative to nuclear power China: Continuously growing demand

23 Conclusions Current Wood Energy Markets Wood Energy, central to diversified portfolio EU represents largest wood energy market Future Wood Energy Growth: Dependent on public policy decisions GHG, renewable energy targets, incentives Healthy pulp & paper and wood manufacturing Residential sector to remain significant, growth? Global demand for wood energy Fossil fuel markets: Oil, natural gas

24 Thank You Francisco X. Aguilar, Ph.D. Associate Professor Department of Forestry University of Missouri Columbia, MO USA

Joint Session of the ECE Timber Committee and

Joint Session of the ECE Timber Committee and the FAO European Forestry Commission Location, Turkey 10 14 October 2011 Wood as a Renewable Energy Source Market and Policy Issues Francisco X. Aguilar, Ph.D.