Piritta Pyörälä & Heli Peltola & Harri Strandman & Kilpeläinen Antti & Asikainen Antti & Kirsti Jylhä & Seppo Kellomäki

DOI 1.17/s12155-13-9372-x Effects of Management on Economic Profitability of Forest Biomass Production and Carbon Neutrality of Bioenergy Use in Norway Spruce Stands Under the Changing Climate Piritta Pyörälä & Heli Peltola & Harri Strandman & Kilpeläinen Antti & Asikainen Antti & Kirsti Jylhä & Seppo Kellomäki # Springer Science+Business Media New York 213 Abstract We analyzed the effects of management on the economic profitability of forest biomass production and carbon neutrality of bioenergy use in Norway spruce (Picea abies L. Karst) stands under the changing climate. We employed a forest ecosystem model and life cycle assessment tool. In particular, we studied the effects of thinning, nitrogen fertilization, and rotation length on: (1) the production of timber and energy biomass, and its economic profitability (net present value), (2) carbon stock in the forest ecosystem and carbon balance in forestry, and (3) carbon dioxide (CO 2 ) emissions from the use of biomass in energy production. Results showed that the current Finnish baseline management with and without nitrogen fertilization resulted in the highest P. Pyörälä (*): H. Peltola : H. Strandman : K. Antti : S. Kellomäki Faculty of Science and Forestry, School of Forest Sciences, University of Eastern Finland, P.O. Box 111, 811 Joensuu, Finland e-mail: piritta.pyorala@uef.fi H. Peltola e-mail: heli.peltola@uef.fi H. Strandman e-mail: harri.strandman@uef.fi K. Antti e-mail: antti.kilpelainen@ymparisto.fi S. Kellomäki e-mail: seppo.kellomaki@uef.fi A. Antti Finnish Forest Research Institute, P.O. Box 68, 811 Joensuu, Finland e-mail: antti.asikainen@metla.fi K. Jylhä Finnish Meteorological Institute, P.O. Box 53, 56 Helsinki, Finland e-mail: kirsti.jylha@fmi.fi mean annual timber production and net present value (NPV) for long rotations (6 to 8 years), regardless of climate scenario. Mean annual production of energy biomass was enhanced by increasing stocking by 2 3 % compared to the baseline management, and/or use of nitrogen fertilization. Such management gave lower CO 2 emissions per unit of energy compared to the baseline management, as the carbon stock in the forest ecosystem and the carbon balance in forestry increased. Overall, the carbon neutrality and net present value were, on average, the highest in the baseline management or with a 2 % increase in stocking, with nitrogen fertilization and 6- to 8-year rotation lengths, regardless of the climate applied. However, it was not possible to simultaneously maximize the NPV of forest biomass production and the carbon neutrality of bioenergy use. Keywords Forest biomass. Intensive management. Carbon neutrality. Climate change Introduction In northern Europe, the growth and dynamics of boreal forests are mainly limited by the short growing period, relatively low summer temperatures and supply of nitrogen. However, the global climate is expected to warm substantially until 21, especially due to the increase of atmospheric carbon dioxide (CO 2 ) concentration. In Finland, the foreseen climate change is projected to increase the mean annual temperature by 2 6 C and precipitation by 7 26 % by 21, depending on the scenario used for the GHG concentrations [1]. The concurrent elevation of mean annual temperature and atmospheric CO 2, together with changes in precipitation, is expected to greatly affect the functioning and dynamics of the boreal forests as well as biomass production and carbon sequestration of forest

ecosystems [2 6]. Forest management and site conditions also affect them [2, 7 12]. In general, the net ecosystem CO 2 exchange is the highest at the younger stand age and starts to saturate after intermediate age affecting the average carbon stock and biomass production over rotation [7, 13]. However, the mean annual carbon stock and carbon sequestration may be increased over a rotation by maintaining stocking higher than that currently recommended [2, 9, 14]. In a similar way, the forest biomass production and its economic profitability may be increased [2, 9, 14]. We could also mitigate climate change by using forest biomass to substitute fossil fuels (e.g., coal) and carbon-intensive materials [6, 15 18]. The current Finnish forest management guidelines emphasize timber production, as its profitability for forest owners is much higher than that of energy biomass production due to higher unit prices of saw logs and pulp wood compared to energy wood [19]. However, the Finnish target is to increase the use of forest chips up to 13.5 million m 3 a 1 by the year 22, whereas the current use is about 7.5 million m 3 a 1 [2]. Therefore, there is an urgent need to increase the integrated production of timber and energy biomass over the rotation to meet the targets set for forest-based energy production. The energy based on forest biomass is assumed to be carbon neutral in the long-term [21, 22] if only the direct CO 2 emissions are considered. On the other hand, in the short-term indirect emissions of CO 2 are emitted related to the supply and use of forest biomass in energy production. Therefore, the carbon neutrality of renewable biomass has been questioned [23 27]. On the other hand, the actual CO 2 emissions of different wood products and use of energy biomass are also affected by the time period considered [28, 29]. In this respect, simultaneous consideration of carbon sequestration of forest ecosystems and production of forest biomass (e.g., timber and energy biomass) in forest management may offer means to reduce the carbon emissions to the atmosphere in the future [3]. In boreal conditions, forest management is characterized by a long production cycle from regeneration to final harvest. Therefore, simulations by forest ecosystem models offer an option to study the sensitivity of the growth and dynamics of forests to management (e.g., choice of tree species and spacing, thinning and nitrogen fertilization, and rotation length) under the varying environmental (climate and site) conditions. By using ecosystem model outputs as inputs to the life cycle assessment (LCA), the management impacts on CO 2 emissions from energy biomass production and utilization could also be assessed [31]. Furthermore, the carbon neutrality of the use of forest biomass in energy production can be estimated. In the above context, the main aim of this work was to study the effects of forest management on the economic profitability of forest biomass production and the carbon neutrality of bioenergy use in Norway spruce (Picea abies L. Karst) stands grown on different site fertility types in boreal conditions under the changing climate. For this purpose, we employed a forest ecosystem model integrated with a life cycle assessment tool. In particular, we studied the effects of management (thinning, nitrogen fertilization, and rotation length) on: (1) the production of timber and energy biomass, and its economic profitability (net present value), (2) the carbon stock in the forest ecosystem and carbon balance in forestry, and (3) CO 2 emissions from the use of energy biomass in energy production, respectively. Our hypothesis was that in addition to forest management also climatic change and site fertility affect the economic profitability of forest biomass production in Norway spruce and the carbon neutrality of biomass use in energy production, respectively. Material and Methods Outlines of Ecosystem Model SIMA A gap-type forest ecosystem model SIMA was used in this work to simulate the growth and dynamics of Norway spruce stands as affected by environmental conditions (climate and site fertility) and management [4, 32]. In the model, the growth of a tree is calculated based on the diameter growth, which is the product of potential diameter growth in the optimal conditions and prevailing climatic and site conditions (i.e., temperature sum, within-stand light, soil moisture, nitrogen availability, and atmospheric CO 2 ). The risk of a tree to die is determined by the competition between trees for growth resources and, thus by the reduction in growth in a given year. Litter and dead trees end up on the soil, where they decompose releasing nitrogen in the long run. The dynamics of the available nitrogen is determined by the amount of nitrogen released and immobilized in the decomposition of soil organic matter. The amount of carbon in the forest ecosystem is calculated by the amount of soil organic matter (soil and humus) and total forest biomass over the rotation, respectively. In this work, the simulations used a time step of 1 year and they were carried out on an area of 1 m 2.Theywerealso based on the Monte Carlo technique; i.e., certain events, such as the birth and death of trees, are stochastic events. Therefore, the simulation for a given management scenario was repeated 5 times. However, only the mean tendency over time of the output variableswasusedinthedataanalysis.themodelhasbeen parameterized for all the main tree species in the Finnish conditions, i.e., for Norway spruce, Scots pine (Pinus sylvestris) and birch (Betula pendula Roth. and Betula pubescens Ehrh.) growing throughout Finland. Management control of the ecosystem dynamics includes regeneration with selected tree species (natural seeding and planting with desired spacing), tending of seedling stands (to control species composition and spacing), thinning (from below or above), nitrogen (N) fertilization, and

the choice of rotation length. In harvesting, both timber (saw logs and pulp wood) and energy biomass (foliage, branches, stumps, and the top part of the stem not suitable for timber) can be considered. Previous simulations with the SIMA model [4, 16, 33] have shown good agreement with the measured values of volume growth of the main tree species on the permanent sample plots of the National Forest Inventory (NFI) throughout Finland. Furthermore, parallel simulations with the empirical growth and yield model Motti [34] and the SIMA model have provided good agreement for the predicted volume growth with and without nitrogen fertilization in Norway spruce [4, 17, 18, 32]. Mäkipää et al. [35] have also shown earlier good agreement between the simulated and measured growth responses of Norway spruce to nitrogen fertilization. Outlines of Life Cycle Assessment Tool The LCA tool was used for the calculation of net CO 2 exchange (C net ) as caused by all the main phases in forest production from the nursery production to the yard of the power plant [31]. The calculations for C net were done on an annual basis (g CO 2 m 2 a 1 ), by considering the carbon uptake in growth (C seq ) and carbon emissions from management (C man ), decomposition of soil organic matter (C decomp )and from burning of energy biomass (C harv ) as shown in Eq. 1: C net ¼ C seq þ C man þ C decomp þ C harv ð1þ In the calculations, the carbon uptake (C seq ) is shown as a negative value (i.e., carbon is flowing from the atmosphere to the forest) and the carbon emissions (C man, C decomp, and C harv ) as positive values (i.e., carbon is flowing from forests and the technosystem to the atmosphere). Hereafter the net CO 2 exchange is referred in this study as carbon balance in forestry (g CO 2 m 2 a 1 ). In this study, inputs used for LCA calculations utilized the following outputs of SIMA: annual growth of trees (including stem, branches, foliage, and coarse and fine roots) and harvested energy biomass (including logging residues, stumps, and coarse roots), however, only from the final cut. In addition, the annual litter fall for the decomposition and emissions of soil organic matter (humus and litter) were considered in the analyses. Carbon emitted in management and logistic operations during the life cycle were also considered through to their consumption of fuel (diesel) or electricity. Chipping of energy biomass was done at the yard of the power plant. The LCA tool has been earlier described in detail by Kilpeläinen et al. [31]. Simulations The simulations were done for Norway spruce stands grown on medium fertile (MT) and fertile (OMT) sites in the Joensuu region, central Finland (62 39 N, 29 37 E). The mean temperature sum in this area is 1,15 d.d. (growing degree day). In the simulations, an annual nitrogen deposition of 6. kg ha 1 was used [36]. At the beginning of the simulations, the average breast height diameter of the seedlings was 2.5 cm and the stand density was 2,5 seedlings per hectare. The initial soil organic matter was 67 Mg ha 1 for the MTsite and 75 Mg ha 1 for the OMT site, representing the mean values obtained from the Finnish National Forest Inventory plots for the Joensuu region [4]. In the simulations, the baseline thinning rules were those currently recommended for the different tree species on the sites of varying fertility in central Finland [37]. According to these, whenever a given basal area threshold for thinning at a given dominant height (i.e., the average height of the 1 largest trees) is reached, thinning is done (from below), and the basal area is reduced to the recommended threshold value after thinning. In this work, forest energy biomass was harvested only in the final felling and it included logging residues (top of stem, branches, and 7 % of needles) and stumps (and coarse roots), respectively. Different thinning regimes with varying rotation length, and with and without nitrogen fertilization, were used in simulations. The first regime included thinning as currently recommended in Finnish conditions (RB). Two other regimes aimed at maintaining higher stocking over the rotation; i.e., the basal area thresholds before and after thinning at a given dominant height were +2 % (R2) and +3 % (R3) higher than those for RB. All these thinning regimes were also run with the fertilization (RBF, R2F, and R3F). The simulation time varied from 3 to 8 years (hereafter named as rotation length). Nitrogen fertilization (15 kg N ha 1 ) was done for the longer rotations (6 8 years) twice, and for the shorter rotations (3 5 years) once. Fertilization was done either simultaneously with thinning or at least 1 years before final felling. The thinning interval was set at a minimum of 1 years and the last thinning was done at least 1 years before the final felling. In the simulations, the current climate data is based on measurements of temperature and precipitation by the Finnish Meteorological Institute (FMI) during the reference period 1971 2. The observational data has been interpolated onto a 1 1-km grid throughout Finland [38, 39]. For the changing climate, expected changes in temperature and precipitation were adopted from the ACCLIM Project (see [1]). The projections were derived from 19 global climate model simulations that originated from the CMIP3 multimodel dataset [4]. They depict multi-model mean climate change during this century under the SRES A2 emission scenario [41]. The A2 scenario implies high greenhouse gas emissions, and according to it the concentration of CO 2 increases from the current value of about 39 ppm [42]toabout 84 ppm until 21. The climate change data has been

interpolated to the 5 5-km grid throughout Finland. We employed in this work the closest grid point to our study region, regardless of source of climate data. Under the changing climate, mean winter and summer temperatures were expected to increase in our study site until 21 by 7 and 3 C and corresponding increase of precipitation by about 3 and 1 %, respectively, see more detailed changes in Table 1. The uncertainty ranges around these foreseen temperature and precipitation changes are about ±2 C and ±15 % in winter and slightly less in summer [1]. Due to the gradual change of temperature, precipitation, and atmospheric CO 2 over time under the changing climate scenario, different rotation lengths represent partly different climatic conditions, unlike under the current climate. For this reason, the effects of management regimes and climatic change on different variables are analyzed in this work separately for shorter (3- to 5-year) and longer (6- to 8-year) rotations. Analysis of Simulation Outputs For each management regime, we analyzed the annual average production of timber (m 3 ha 1 a 1 ) and energy biomass (Mg ha 1 a 1 ), as well as the economic profitability of forest biomass production in terms of annual average net present value (NPV, ha 1 a 1 ). The values of NPV were calculated by discounting all the incomes from thinning and the final cut, and the cost of regeneration and nitrogen fertilization. In the NPV calculations a 3 % interest rate was used. Furthermore, the stumpage price used for pulp wood and saw logs represented the 1-year average (2 21) over the whole of Finland [43]. The price used was 21.5 m 3 for pulp wood, 48.6 m 3 for saw logs and 4 m 3 for energy biomass, the latter one also including the governmental subsidies available for the harvesting of energy biomass in final felling. The regeneration cost included soil preparation (mounding, 265 ha 1 ) and planting costs (.2 per seedling, in total 5 ha 1,seeRouta et al. [44]). The cost of nitrogen fertilization was 214.5 ha 1 based on the 1-year average (2 21) over the whole of Finland. The mean carbon storage in the forest ecosystem (Mg ha 1 ) was also calculated, including carbon in trees (stems, branches, needles, stumps, and roots) and soil (mass of humus and litter over the rotation). Furthermore, the carbon balance in forestry (g CO 2 m 2 a 1 ) was calculated, consisting of: (1) the carbon sequestration of tree growth and soil, (2) the carbon emissions from decaying organic matter in soil, and (3) the emissions from the management, harvesting, and logistic operations needed to produce timber and energy biomass. In addition, the specific CO 2 emissions per unit of energy produced over the rotation were calculated (kg CO 2 MWh 1 ), which takes into account the share of carbon balance in forestry for produced energy biomass over rotation and the CO 2 emissions of energy biomass combustion. In these calculations, the energy content of biomass was taken as 3.24 MWh Mg 1 assuming moisture content of 3 4 % [45, 46], and wood density of 4 kg m 3 and a carbon content of 5 % of dry mass, respectively. In order to calculate the substitution of coal by energy biomass, we calculated the carbon neutrality factor (CN (t)) [22]. This indicates the ratio between the net reduction/ increase of CO 2 emissions in the bioenergy system (i.e., the simulation case) and the CO 2 emissions from the substituted energy from the reference energy system over a given period of time: ½ CNðÞ¼ t E rðþ E t n ðþ t Š ¼ 1 E nðþ t E r ðþ t E r ðþ t ð2þ where E r (t) is the CO 2 emissions from the reference energy system based on fossil fuels (coal in our case) between and t years, and E n (t) is the CO 2 emissions from the energy system based on forest biomass between and t years. In this respect, the following four cases can be separated: (1) CN <, if the emissions from the bioenergy system are higher than the emissions from the fossil fuel system; (2) CN =, if the emissions from the bioenergy system are equal to the emissions from the reference system; (3) <CN(t)<1, if the emissions from the bioenergy system are less than from the reference Table 1 Monthly means for temperature and precipitation in the Joensuu region during the current climate (1971 2) and their expected change under the global SRES A2 emission scenario. The projections are multimodel mean best estimates based on 19 global climate models (see text for details). Winter consists of December, January, and February, and summer consists of June, July, and August Temperature, T Winter Summer Precipitation (mm) Winter Summer 1971 2: T C 1 15 1971 2: Prec, mm 31 66 S1: 21 239, T C change 2 1 S1: 21 239, % change 6 3 S2: 24 269, T C change 5 2 S2: 24 269, % change 16 7 S3: 27 299, T C change 7 3 S3: 27 299, % change 32 1

system; and (4) CN =1, if the bioenergy system produces zero emissions. The emission value used for coal was 341 kg CO 2 MWh 1 [47]. Results Production of Forest Biomass The mean annual timber production of Norway spruce was under the current climate with the Finnish baseline management (RB) in the range of 2.6 5.4 and 4.2 6.2 m 3 ha 1 a 1 on the medium fertile site (MT) and fertile site (OMT) (Table 2). Under the changing climate the corresponding ranges were 2.8 5. and 4.3 5.7 m 3 ha 1 a 1 on the MT and OMT site, respectively. An increase of 2 and 3 % in basal area thresholds with fertilization or fertilization alone increased the mean annual timber production up to 1 % compared to the baseline management, regardless of rotation length and site fertility type (Fig. 1a d). However, remarkable increase in basal area thresholds (+3 %) without fertilization decreased the mean annual timber production compared to the baseline management. Effects of increased basal area thresholds and fertilization were in some degree lower on the OMT site compared to the MT site. Overall, the gradual climate warming resulted in up to 15 2 % lower mean annual timber production for long rotations compared to the current climate (Fig. 2a,b). The reduction was, on average, higher on the OMT site. For the short rotations, the mean annual timber production increased on the MT site, but on the OMT site no clear climate effect was observed in this sense. On average, the baseline management (RB) with and without fertilization (RBF) resulted in a higher average annual timber production, regardless of climate scenario. The mean annual energy biomass production of Norway spruce was in final felling under the current climate with the Finnish baseline management (RB) in the range of 1. 1.4 and 1.1 1.8Mgha 1 a 1 on the medium fertile site (MT) and fertile site (OMT) (Table 3). Under the changing climate the corresponding ranges were.8 1.5 and.9 1.8Mgha 1 a 1 on the MT and OMT site, respectively. An increase of 2 and 3 % in basal area thresholds with fertilization increased the mean annual energy biomass production up to 22 % compared to the baseline management, regardless of rotation length and site fertility type, as did the fertilization alone. The mean annual energy biomass production was, on average, higher for short rotations than for long rotations. Furthermore, the mean annual energy biomass production was, on average, higher on the OMT site compared to MT site. In general, the gradual climate warming resulted in lower mean annual energy biomass production for long rotations compared to the current climate. The reduction was, on average, higher on the OMT site. But, for short rotations the mean annual energy biomass production increased on the MT site, but on the OMT site no clear climate effect was observed in this sense. On average, an increase of 2 and 3 % in basal area thresholds with fertilization resulted in higher mean annual energy biomass production compared to the baseline management (RB), regardless of climate scenario. Net Present Value The mean annual net present value of Norway spruce was under the current climate with the Finnish baseline management (RB) in the range of 1 21 and 14 35 ha 1 a 1 on the medium fertile site (MT) and fertile site (OMT) (Figs. 3a d and 4a d). Under the changing climate the corresponding ranges were 1 21 and 14 34 ha 1 a 1 on the MT and OMT Table 2 Ranges of the mean annual production of timber (m 3 ha 1 a 1 ) under the current and changing climate on the MT and OMT sites for short and long rotations with different management regimes Simulation time, years Management regime MT site CU 3 5 years 2.6 4.4 2.9 4.7 2.6 4.3 2.9 4.6 2.6 4. 2.9 4.4 6 8 years 5. 5.4 5.3 5.6 5. 5.5 5.2 6. 4.7 5.2 4.9 5.6 CC 3 5 years 2.8 4.1 3.1 4.9 2.8 4.5 3.1 4.8 2.8 4.2 3.1 4.5 6 8 years 4.5 5. 4.7 5.3 3.4 5. 4. 5.3 3.6 4.9 4.4 5. OMT site CU 3 5 years 4.2 5.7 4.6 5.8 4.2 5.8 4.5 5.9 4.2 5. 4.5 5.3 6 8 years 6. 6.2 6.2 6.6 6. 6.2 6.3 6.5 5.8 6. 6. 6.3 CC 3 5 years 4.3 5.6 4.5 6. 4.3 5.5 4.5 6. 4.3 5. 4.5 5.4 6 8 years 4.8 5.7 5.3 6.2 3.7 5.9 4.1 6. 3.7 5.5 4.5 5.9 CU current climate, CC changing climate, F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime

Fig. 1 The relative change of the annual timber production for different management regimes compared to the Finnish baseline management under the current (CU) and changing (CC) climate on the medium (a, b; MT) and fertile (c, d; OMT) site type with different management regimes and simulation times. Legend: F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime. In sub-figure a CU, MT; b CC, MT; c CU, OMT, and d CC, OMT Management effect, % Management effect, % 15 1 5-5 -1 15 1 5-5 a RBF R2 R2F R3 R3F c RBF R2 R2F R3 R3F 15 1 5-5 -1 15 1 5-5 b RBF R2 R2F R3 R3F d RBF R2 R2F R3 R3F -1 3-5 yr. 6-8 yr. -1 3-5 yr. 6-8 yr. site, respectively. An increase of 3 % in basal area thresholds without fertilization decreased the mean annual NPV compared to the baseline management, regardless of rotation length and climate scenario as did an increase of 3 % in basal area thresholds with fertilization. For an increase of 2 % in basal area thresholds with and without fertilization the mean annual NPV was similar to that with the baseline management. In general, the mean annual NPV was higher for longer rotations than for short rotations due to larger share of more valuable saw logs. On the other hand, on the OMT site 5 years rotation length resulted in the highest mean annual NPV regardless climate scenario. The mean annual NPV was higher on the OMT site compared to the MT site, regardless of climate scenario. Furthermore, the mean annual NPV was even negative on the MT site when using rotation short length (3 years) and fertilization, regardless of climate scenario. Under the changing climate the mean annual NPV was lower especially for 8 years rotation length compared to the current climate. The reduction was higher on the OMT site. On the other hand, for short rotations the climate change increased mostly the mean annual NPV. The baseline management (RB) with and without fertilization (RBF) resulted, on average, in higher NPV, regardless of climate scenario. Carbon Stock in the Forest Ecosystem and Carbon Balance in Forestry The mean annual carbon stock in the forest ecosystem (trees and soil) was under the current climate with the baseline management (RB) in the range of 38 72 and 41 82 Mg ha 1 a 1 on the medium fertile site (MT) and fertile site (OMT) (Table 4). 1 a 1 b 5 5 Climate effect, % -5-1 -5-1 -15-15 -2 3-5 yr. 6-8 yr. -2 Fig. 2 Effect of the changing climate on the annual timber production (m 3 ha 1 a 1 ) compared to the current climate on the medium (a, MT) and fertile (b, OMT) site type with different management regimes and simulation times. Legend: F nitrogen fertilization (15 kg N ha 1 ), RB 3-5 yr. 6-8 yr. thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime

Table 3 Ranges of the mean annual production of energy biomass (Mg ha 1 a 1 ) under the current and changing climate on the MT and OMT sites for short and long rotations with different management regimes Simulation time, years Management regime MT site CU 3 5 years 1.1 1.4 1.2 1.6 1. 1.5 1.1 1.6 1.3 1.5 1.4 1.6 6 8 years 1. 1.3 1.1 1.4 1. 1.3 1.1 1.4 1.1 1.3 1.1 1.4 CC 3 5 years 1.2 1.5 1.3 1.6 1.1 1.5 1.2 1.6 1.3 1.5 1.4 1.6 6 8 years.8 1.3.9 1.4.8 1.2.9 1.3.8 1.2 1. 13 OMT site CU 3 5 years 1.3 1.8 1.4 1.9 1.4 1.8 1.5 1.9 1.7 1.8 1.8 1.9 6 8 years 1.1 1.5 1.3 1.6 1.1 1.5 1.1 1.6 1.1 1.4 1.4 1.5 CC 3 5 years 1.3 1.8 1.3 1.9 1.3 1.8 1.5 1.9 1.7 1.8 1.9 6 8 years.9 1.5.9 1.6.8 1.4.9 1.5.8 1.3 1. 1.4 CU current climate, CC changing climate, F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime Under the changing climate the corresponding ranges were 38 62 and 41 78 Mg ha 1 a 1 on the MT and OMT site, respectively. An increase of 2 and 3 % in basal area thresholds with fertilization increased the mean annual carbon stock up to 15 %, regardless of climate scenario and site fertility type. But also fertilization alone increased the mean annual carbon stock. In general, the mean annual carbon stock was lower for short rotations than for longer ones. Furthermore, the mean annual carbon stock in the forest ecosystem was, on average, higher on the OMT site than on the MT site. In general, the mean carbon stock in the forest ecosystem was under the changing climate slightly lower, regardless of rotation length, compared to the current climate. This was due to the increased mortality of trees and decomposition of litter under the changing climate, and especially for long rotations. The reduction was on average higher on the OMT site. On average, an increase of 3 % in basal area thresholds with and without additional fertilization (R3F) resulted in a higher mean carbon stock in the forest ecosystem, regardless of climate scenario. The mean annual carbon balance in forestry ranged under the current climate with the baseline management (RB) from 36 to 14 and from 482 to 173 g CO 2 m 2 a 1 on the medium fertile site (MT) and fertile site (OMT) (Table 5). Fig. 3 Net present value ( ha 1 a 1, NPV) under the current (a, b) and changing climate (c, d) on the medium fertile (MT) with different management regimes and simulation times. Legend: F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime NPV, ha -1 a -1 4 3 2 1-1 4 3 a c 4 3 2 1-1 4 3 b d NPV, ha -1 a -1 2 1 2 1-1 -1 8 yr. 7 yr. 6 yr. 5 yr. 4 yr. 3 yr.

Fig. 4 Net present value ( ha 1 a 1, NPV) under the current (a, b) and changing climate (c, d) on the fertile (OMT) site with different management regimes and simulation times. Legend: F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime NPV, ha -1 a -1 4 3 2 1 4 a c 4 3 2 1 4 b d NPV, ha -1 a -1 3 2 1 3 2 1 8 yr. 7 yr. 6 yr. 5 yr. 4 yr. 3 yr. Under the changing climate the corresponding ranges were from 34 to 26 and from 42 to 164gCO 2 m 2 a 1 on the MT and OMT site, respectively. An increase of 2 and 3 % in basal area threshold resulted in equal mean carbon balance in forestry, regardless rotation length and climate scenario, compared to the baseline management. However, fertilization alone improved the mean annual carbon balance in forestry as did an increase in basal area thresholds with fertilization, regardless rotation length and climate scenario. For long rotations the carbon balance in forestry was higher than for short rotations, regardless of climate scenario. Overall, the gradual climate warming resulted in a lower carbon balance in forestry for long rotations compared to the current climate. The reduction was on average higher on the OMT site. Correspondingly, the carbon balance in forestry improved under the changing climate for short rotations on the MT site, opposite to the OMT site. On average, an increase of 2 and 3 % in basal area thresholds with fertilization (R2F and R3F) resulted in a higher carbon balance in forestry compared to baseline management, regardless of climate scenario. Specific CO 2 Emissions per Unit of Energy The specific CO 2 emissions per unit of energy produced were under the current climate with the baseline management (RB) Table 4 Ranges of the mean annual carbon stock in the forest ecosystem (Mg ha 1 ) under the current and changing climate on the MT and OMT sites for short and long rotations with different management regimes Simulation time, years Management regime MT site CU 3 5 years 38 49 39 5 38 51 39 52 38 57 39 59 6 8 years 58 72 61 75 6 75 61 78 61 8 64 83 CC: 3 5 years 38 48 39 5 38 51 39 52 38 57 39 59 6 8 years 57 68 59 7 58 73 6 77 59 74 63 78 OMT site CU 3 5 years 41 56 42 58 41 58 42 59 41 68 42 68 6 8 years 68 82 7 88 7 88 72 88 72 91 74 98 CC 3 5 years 41 54 41 57 4 56 41 59 4 66 41 67 6 8 years 66 78 68 81 66 87 69 88 69 87 7 9 CU current climate, CC changing climate, F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime

Table 5 Ranges of the carbon balance in forestry (g CO 2 m 2 a 1 ) under current and changing climate on the MT and OMT sites for short and long rotations with different management regimes Simulation time, years Management regime MT site CU 3 5 years 25to 14 33 to 75 246 to 12 292 to 74 33 to 12 41 to 72 6 8 years 41 to 36 442 to 42 46 to 373 499 to 415 445 to 339 59 to 384 CC 3 5 years 248 to 26 33 to 75 246 to 28 296 to 75 33 to 27 392 to 81 6 8 years 34 to 281 39 to 341 352 to 262 422 to 331 333 to 272 393 to 346 OMT site CU 3 5 years 41 to 173 431 to 228 393 to 165 435 to 224 475 to 173 54 to 225 6 8 years 482 to 439 536 to 493 53 to 448 595 to 473 498 to 432 567 to 491 CC 3 5 years 349 to 164 412 to 22 347 to 162 41 to 25 435 to 164 51 to 27 6 8 years 42 to 284 462 to 332 43 to 299 457 to 318 383 to 268 418 to 341 CU current climate, CC changing climate, F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime in the range of 185 561 and 191 411 kg CO 2 MWh 1 on the medium fertile site (MT) and fertile site (OMT) (Table 6). Under the changing climate the corresponding ranges were 24 536 and 226 425 kg CO 2 MWh 1 on the MT and OMT site, respectively. An increase of 2 and 3 % in basal area thresholds with fertilization reduced CO 2 emissions per unit of energy produced up to 28 % compared to the baseline management. Fertilization alone reduced also CO 2 emissions per unit of energy produced. For long rotations CO 2 emissions per unit of energy produced were lower than for short rotations. Overall, the gradual climate warming resulted in higher average specific CO 2 emissions per unit of energy produced for long rotations compared to the current climate. The increase was on average higher on the MTsite for long rotations. An increase of 2 and 3 % in basal area thresholds with fertilization (R2F and R3F) resulted, on average, in lower specific CO 2 emissions per unit of energy, regardless of climate scenario. Carbon Neutrality of the Bioenergy System In this work, carbon neutrality refers to the CO 2 emissions per energy unit from the bioenergy system compared to using coal in energy production. Carbon neutrality ranged under the current climate with the baseline management (RB) from 65 to 46 % and from 21 to 44 % on the medium fertile site (MT) and fertile site (OMT) (Fig. 5a h). Under the changing climate the corresponding ranges were from 57 to.3 % and from 25 to 34 % on the MT and OMT site, respectively. An increase of 2 and 3 % in basal area thresholds with fertilization increased the carbon neutrality up to 25 percentage points (units) compared to baseline management, regardless Table 6 Ranges of the specific CO 2 emissions per unit of energy produced (kg CO 2 MWh 1 ) under the current and changing climate on the MT and OMT sites for short and long rotations with different management regimes Simulation time, years Management regime MT site CU 3 5 years 292 561 266 485 286 559 256 483 227 562 195 477 6 8 years 185 219 165 182 18 213 144 184 156 215 135 177 CC 3 5 years 314 536 283 476 33 537 267 481 24 533 28 478 6 8 years 24 259 22 236 188 253 169 221 193 26 18 226 OMT site CU 3 5 years 239 411 22 374 237 422 216 375 17 414 141 374 6 8 years 191 197 168 183 155 187 136 179 167 187 127 171 CC 3 5 years 276 425 244 397 27 426 24 398 24 421 175 394 6 8 years 226 271 21 253 163 24 187 29 26 256 195 228 CU current climate, CC changing climate, F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime

site fertility type and climate scenario (Fig. 6a d). Fertilization alone increased the carbon neutrality up to 15 percentage points compared to the baseline management. Carbon neutrality was, on average, lower for short rotations than for long rotations, regardless of climate scenario and site fertility type. Site fertility type did not largely affect the carbon neutrality. Overall, the gradual climate warming resulted, on average, in lower carbon neutrality of the bioenergy system compared to the current climate (Fig. 7a, b). The decrease was on average higher on the MT site for long rotations, opposite to short rotations. On average, an increase of 2 and 3 % in basal area thresholds with fertilization (R2F and R3F) resulted, on average, in higher carbon neutrality of the bioenergy system, regardless of climate scenario. In general, higher carbon neutrality could be obtained by the use of long rotations and by maintaining higher stocking (2 3 % increase in basal area thresholds) over rotation and by using fertilization. On the other hand, baseline management with fertilization and long rotation provided the highest net present value (Fig. 8a d). Simultaneously on average higher carbon neutrality and NPV could be obtained either with baseline management and an increase of 2 % in basal Fig. 5 Carbon neutrality of the bioenergy system under the current (CU) and changing (CC) climate on the medium fertile (a d; MT) and fertile (e h; OMT) site with different management regimes and simulation times. Legend: F nitrogen fertilization (15 kg N ha 1 )onceortwice over the rotation, R only final cut used, RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, R3 3 % increment of basal area before and after thinning compared to basic thinning regime. In sub-figures a, b CU, MT; c, d CC, MT; e, f CU, OMT; and g, h CC, OMT Carbon neutrality, % Carbon neutrality, % 1 5-5 -1 1 5-5 a c b d -1 1 e 8 yr. 7 yr. 6 yr. f 5 yr. 4 yr. 3 yr. Carbon neutrality, % 5-5 -1 1 g h Carbon neutrality, % 5-5 -1 8 yr. 7 yr. 6 yr. 5 yr. 4 yr. 3 yr.

Fig. 6 Relative change of carbon neutrality of the bioenergy system for different management regimes compared to the Finnish baseline management under the current (CU) and changing (CC) climate on the medium (a, b; MT) and fertile (c, d; OMT) site type with different management regimes and simulation times as percentage points (pp). Legend: F nitrogen fertilization (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, and R3 3 % increment of basal area before and after thinning compared to basic thinning regime. In sub-figure a CU, MT; b CC, MT; c CU, OMT; and d CC, OMT Management effect, pp Management effect, pp 3 2 1 3 2 1 a RBF R2 R2F R3 R3F c RBF R2 R2F R3 R3F 3-5 yr. 6-8 yr. 3 2 1 3 2 1 b RBF R2 R2F R3 R3F d RBF R2 R2F R3 R3F 3-5 yr. 6-8 yr. area thresholds with longer rotations and fertilization. Compared to the current climate, the values of carbon neutrality and NPV reduced in some degree under the gradually warming climate. Discussion In this work, we employed the ecosystem model SIMAwith an LCA Tool to study the effects of management regimes and climatic change on the economic profitability of biomass production in Norway spruce in boreal conditions, and the carbon neutrality of biomass use for energy production. The use of longer rotations and baseline management (RB) with and without additional fertilization (RBF) resulted in higher mean annual timber production, regardless of the climate scenario, compared to the other management regimes (Table 7). This was the case also for NPV (with 3 % interest rate). On the other hand, nitrogen fertilization increased timber production also for other management regimes, but not NPV due to the costs of fertilization. The response of tree growth and timber production to nitrogen fertilization was in relative terms higher on the MT site than on the OMT site, which findings are in line with the previous study of Kukkola and Saramäki [48], for example. In our work, an increase of 2 and 3 % in basal area thresholds in thinning decreased the diameter growth of individual trees and delayed the thinning, compared to the baseline management, regardless of climate scenario. This also increased to some extent the natural mortality of trees in the stand and especially in long rotations and under the changing climate. Even though an increase of 2 % in basal area thresholds with nitrogen fertilization (R2F) increased the annual timber production, it resulted in lower NPV. Using such management, the amount and share of timber assortments (saw logs 2 a 2 b Climate effect, pp 15 1 5-5 15 1 3-5 yr. 6-8 yr. -5 Fig. 7 Effect of the changing climate on the carbon neutrality of the bioenergy system compared to the current climate on the medium (a)and fertile (b) site type with different management regimes and simulation times as percentage points (pp). Legend: F nitrogen fertilization 5 3-5 yr. 6-8 yr. (15 kg N ha 1 ), RB thinning based on the Finnish Recommendations, R2 2 % increment of basal area before and after thinning, and R3 3 % increment of basal area before and after thinning compared to basic thinning regime

a Carbon neutrality 1..7.4 b Carbon neutrality 1..7.4.1.1-1 -5 5 1 15 2 25 3 35 -.2 NPV, ha -1 a -1 -.5 -.8 c Carbon neutrality 1..7.4.1-1 -5 5 1 15 2 25 3 35 -.2 NPV, ha -1 a -1 -.5-1 -5 5 1 15 2 25 3 35 -.2 NPV, ha -1 a -1 d Carbon neutrality -.5 -.8 1..7.4.1-1 -5 5 1 15 2 25 3 35 -.2 NPV, ha -1 a -1 -.5 -.8 Fig. 8 Carbon neutrality as a function of the net present value of an interest rate of 3 % (NPV, ha 1 a 1 ) for range of rotation lengths on the medium fertile (MT) site (a, c) and on the fertile (OMT) site (b, d) under the current climate (a, b; CU) and changing climate (c, d;cc).legend:black point rotation lengths of 6, 7, and 8 years; white point rotation lengths of 3, 4, and 5 years; data labels: square thinning based on the Finnish -.8 RB, RBF R2, R2F R3, R3F RB, RBF R2, R2F R3, R3F Recommendations (RBF, RB) with and without N fertilization (15 kg N ha 1 ); triangle 2 % increment of basal area before and after thinning (R2F, R2) with and without N fertilization (15 kg N ha 1 ); circle 3 % increment of basal area before and after thinning (R3) with and without N fertilization (15 kg N ha 1 ) compared to basic thinning regime. In sub-figure a CU, MT; b CU, OMT; c CC, MT; and d CC, OMT and pulp wood) were also changed in harvesting. An increase of 2 and 3 % in basal area thresholds increased the yield of pulp wood up to 35 % compared to baseline management, which was opposite to the yield of saw logs. Due to the higher price for saw logs than for pulp wood and energy biomass, this resulted on average in a lower NPV compared to the baseline management. However, it has to be noted that in our study the unit prices of timber and biomass assortments were not dependent on the diameters of the trees. The price of saw logs and pulp wood is usually in some degree higher in final cut compared to thinning, which we did not consider in our study. We also harvested energy biomass only in final felling and this had only a small effect on NPV. Short rotations resulted also in a Table 7 Effects of increased basal area thresholds and/or additional N fertilization compared to baseline management, as well as effects of rotation length and changing climate on different variables Variables Short rotations (3 to 5 years) Long rotations (6 to 8 years) Increase of basal area thresholds N fertilization Climate change Increase of basal area thresholds N fertilization Climate change Timber production Energy biomass production Net present value Carbon stock in forest ecosystem Carbon balance in forestry Carbon neutrality = increasing effect on variable; = decreasing effect on variable

clearly lower yield of harvestable timber and NPV due to the large share of trees not reaching the minimum limits for commercial wood. The gradual climate warming resulted in lower mean annual timber production and NPVespecially for long rotations, regardless of management regime, compared to the current climate. This is related to the increased mortality of Norway spruce due to a significant increase in mean annual temperature and drought effects, and especially for the longest rotation (8 years). Previously, also Kellomäki et al. [4] suggested that the growth of Norway spruce (with shallow rooting) will suffer drought in Southern Finland under the changing climate and especially on sandy soils with relatively low soil water holding capacity. The current Finnish forest management guidelines emphasize timber production with relative long rotation length (6 to 8 years), as the profitability of timber production is for forest owners much higher than that of energy biomass production (e.g., [49]). On the other hand, the profitability of integrated timber and energy biomass production may increase also from that observed in our work if using higher initial stand density in regeneration and at the seedling phase, and by harvesting energy biomass also at the first thinning (e.g., [33]). However, nitrogen fertilization could be needed to compensate nutrient losses due to harvesting of logging residues and especially if intensive harvesting is done [5, 51]. In any case, harvesting of logging residues should be done only at enough fertile sites [37, 5]. It is also recommended that at least 3 % of the harvestable potential of logging residuals (especially needles with high nitrogen content) should be left on the site [52]. In general, the carbon neutrality of the bioenergy system is affected by the carbon balance in the forest ecosystem and CO 2 emissions per unit of energy produced over the rotation. According to our study, most of the management regimes resulted in positive values for carbon neutrality, indicating on average lower CO 2 emissions per unit of energy produced than that caused by the use of coal instead. However, the use of longer rotations, increase of basal area thresholds and nitrogen fertilization resulted, on average, in higher carbon neutrality, regardless of the climate scenario used (Table 7). This was related to increased growth and carbon sequestration and carbon stock of the forest ecosystem, which improved the carbon balance in forestry, and consequently reduced the CO 2 emissions per unit of energy produced. The positive effects of longer rotations on carbon neutrality are due to the fact that in the early phase of rotation the CO 2 emissions from the soil will substantially exceed the CO 2 uptake of young trees which effect will be compensated if longer rotation is used [7]. In our work, the carbon neutrality decreased under the changing climate compared to the current climate, regardless of management regime, and especially for long rotations. This was caused by increased mortality of Norway spruce in longer rotations which decreased the mean annual biomass production (timber and energy wood) and average carbon stock, and increased the CO 2 emissions of the use of energy biomass as well. As a result, the carbon balance in forestry decreased for long rotations. In line with our work, Seely et al. [53] also previously found a trade-off between the timber production and carbon storage of the forest ecosystem. However, the use of longer rotations resulted, on average, in higher mean annual production of timber and energy biomass, carbon stock in the forest ecosystem, and carbon balance in forestry compared to the use of shorter rotations. Also use of some degree higher basal area thresholds in thinning compared to the baseline management has been suggested to increase simultaneously the average timber production and the carbon stock in the forest ecosystem (e.g., [2, 9, 54]). The net emissions of carbon to the atmosphere from the bioenergy system are sensitive to the forest growth and rate of efficient substitution of fossil fuels [55]. In our study, the CO 2 emissions per unit of energy produced were also sensitive to the harvested amount of energy biomass, because a share of the carbon balance of forestry was allocated for energy biomass in regard to its share of total forest biomass production, including both timber and energy biomass. Based on this approach, we could finally define the most efficient bioenergy production and utilization chain. The substitution capacity of forest-based bioenergy found in this work would have been even higher compared to the use of coal, if also the CO 2 emissions from production and transportation of coal were considered in the analyses. On the other hand, we need to burn nearly double weight of forest energy biomass compared to coal to provide same amount of energy. This results in almost two time higher CO 2 release to the atmosphere simultaneously. According to our study, maximizing NPV and carbon neutrality simultaneously was not possible. In general, higher carbon sequestration and carbon stock of the forest ecosystem provides higher carbon neutrality, but not higher NPV, and vice versa. However, we could suggest some management regimes that provide simultaneously on average higher carbon neutrality and NPV (Fig. 8), such as baseline management with and without fertilization (RB and RBF). As a comparison, use of longer rotations and an increase of 2 % in basal area thresholds in thinning with and without fertilization (R2, R2F) resulted in on average higher carbon neutrality, but somewhat lower NPV than with the baseline management with and without fertilization. Both carbon neutrality and NPV clearly decreased if using 8 years rotation length under the changing climate (Fig. 8). In this study, the use of 5- to 7-year rotations also had on average higher NPV, regardless of the climate scenario, but somewhat lower carbon neutrality. Conclusions The use of longer rotations with current baseline management and nitrogen fertilization resulted, on average, in higher carbon