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VTT Tiedotteita - Research Notes 2189 ; Greenhouse gas (GHG) impact of wood and paper products, in the following referred as harvested wood products (HWP), is twofold: 1) HWP form a renewable pool of wood-based carbon, whose changes act as carbon sink or source, 2) manufacture and whole lifecycle of HWP cause fossil carbon emissions. These fossil emissions are often smaller than those of rival products from nonrenewable sources, and thus material and energy substitution by HWP can cause a relative decrease in GHG emissions. This report considers both above components, but it focuses on impact 1) and specifically on the approaches and methods for estimating the balance of wood-based carbon in HWP. In estimation and reporting GHG emissions under the United Nations Framework Convention on Climate Change (UNFCCC), countries do in principle report all their fossil carbon emissions (including those of HWP lifecycle), whereas reporting principles of carbon balance in HWP, impact 1), is still open. At present only changes in forest biomass are reported whereas HWP stock is not assumed to change. Climate political debate has raised alternative and competing accounting approaches, which in totally different way allocate HWP emissions or removals between countries. The report discusses and compares the alternative approaches and provides numerical examples illustrating the position of various countries in above emissions allocation. After inclusion of HWP reporting under the UNFCCC, the next possible step could be to include HWP accounting in the commitments of the Kyoto Protocol. In this case, substantial barriers for international trade of HWP and use of renewable bioenergy might be formed, dependent on the choice of the HWP accounting approach. In this study a dynamic spreadsheet model of carbon balance in HWP was developed, which countries could use in their national emissions estimation and reporting under the UNFCCC. The model requires as basic input data the production and international trade rates of HWP, provided worldwide and since 1961 by the FAO database, which is easily accessible through the internet. The report presents a short description of the above model. In addition, a more robust method for estimation of national HWP stocks is presented, based on direct inventory of building stock. However, this method is not applicable in national reporting globally, basically due to lack of relevant statistics in most countries. The GHG impacts of type 2) are also shortly illustrated by Finnish case studies, two of which consider material substitution in Finnish new construction.

VTT Technology 7 ; Renewable energy targets create an increasing demand for bioenergy and transportation biofuels across the EU region. In Finland, forest biomass is the main bioenergy source and appears to be the most promising source for transportation biofuel production. In this study, a biodiesel strategy based on domestic forest biomass is analysed using an integrated modelling framework. A market-oriented framework is applied to estimate the potential greenhouse gas impacts of achieving a national transport biofuel target (10% vs. 20% of total consumption) under the current climate and energy policy obligations. The cost-minimising adaptation of the energy system to policy targets, the demand for wood biomass and emissions from the energy system including the transportation sector are described using the energy system model EPOLA - a dynamic linear optimization model. The resulting response of the Finnish forests (their carbon balance) to the increasing demand for wood biomass is modelled using the EFISCEN forest model. The analysis demonstrates the importance of including market-mediated impacts in the analysis. The majority of adjustments toward the biofuel target takes place in the ETS sector, among the energy producers participating in the EU Emission Trading System, even though the transportation biofuel target is set within the non-ETS sector. The demand for wood in biorefineries raises the wood price thereby weakening its competitive position against fossil fuels. In consequence, wood is likely to be partly replaced by fossil fuels within the ETS sector, for example in district heating. In addition, biorefineries would increase the total use of electricity. Thus, fossil fuel carbon dioxide emissions in the ETS sector within the Finnish borders would increase. Total cumulative emissions, including the non-ETS sector and the forest carbon balance, are slightly lower in the biodiesel scenarios than in the baselines. In transport and in the non-ETS sector in general, the decrease in emissions takes full effect immediately, whilst the decrease in carbon sink in the Finnish forests appears to be gradual. The impact on the carbon sink is fairly small because wood harvesting increases by less than the amount of wood used for biodiesel production. The increase in emissions from the Finnish ETS sector is not accounted for in the total emissions, because at the EU level, emissions in the ETS sector are fixed. Any increase in ETS emissions in Finland has to be compensated by the purchase of emission allowances, and the corresponding emission reduction takes place elsewhere in the ETS area. The possible carbon leakage due to the increased use of forest or imported biomass elsewhere in the EU is excluded from this analysis. Biodiesel proves not to be a cost-effective measure for attaining climate or renewables targets. This is due to the low efficiency of the biodiesel chain in displacing fossil diesel emissions. Just from the mitigation point of view, the direct burning of solid wood biomass in energy-efficient boilers should be favoured. ; Renewable energy targets create an increasing demand for bioenergy and transportation biofuels across the EU region. In Finland, forest biomass is the main bioenergy source and appears to be the most promising source for transportation biofuel production. In this study, a biodiesel strategy based on domestic forest biomass is analysed using an integrated modelling framework. A market-oriented framework is applied to estimate the potential greenhouse gas impacts of achieving a national transport biofuel target (10% vs. 20% of total consumption) under the current climate and energy policy obligations. The cost-minimising adaptation of the energy system to policy targets, the demand for wood biomass and emissions from the energy system including the transportation sector are described using the energy system model EPOLA - a dynamic linear optimization model. The resulting response of the Finnish forests (their carbon balance) to the increasing demand for wood biomass is modelled using the EFISCEN forest model. The analysis demonstrates the importance of including market-mediated impacts in the analysis. The majority of adjustments toward the biofuel target takes place in the ETS sector, among the energy producers participating in the EU Emission Trading System, even though the transportation biofuel target is set within the non-ETS sector. The demand for wood in biorefineries raises the wood price thereby weakening its competitive position against fossil fuels. In consequence, wood is likely to be partly replaced by fossil fuels within the ETS sector, for example in district heating. In addition, biorefineries would increase the total use of electricity. Thus, fossil fuel carbon dioxide emissions in the ETS sector within the Finnish borders would increase. Total cumulative emissions, including the non-ETS sector and the forest carbon balance, are slightly lower in the biodiesel scenarios than in the baselines. In transport and in the non-ETS sector in general, the decrease in emissions takes full effect immediately, whilst the decrease in carbon sink in the Finnish forests appears to be gradual. The impact on the carbon sink is fairly small because wood harvesting increases by less than the amount of wood used for biodiesel production. The increase in emissions from the Finnish ETS sector is not accounted for in the total emissions, because at the EU level, emissions in the ETS sector are fixed. Any increase in ETS emissions in Finland has to be compensated by the purchase of emission allowances, and the corresponding emission reduction takes place elsewhere in the ETS area. The possible carbon leakage due to the increased use of forest or imported biomass elsewhere in the EU is excluded from this analysis. Biodiesel proves not to be a cost-effective measure for attaining climate or renewables targets. This is due to the low efficiency of the biodiesel chain in displacing fossil diesel emissions. Just from the mitigation point of view, the direct burning of solid wood biomass in energy-efficient boilers should be favoured.

VTT Technology 237 ; Increased demand for wood in the bioeconomy and bioenergy production means increased pressure on forest resources. Policies emphasising the targets for bioenergy, such as the European Union 2020 targets for renewable energy, have evoked concern on the sufficiency of biomass resources. As forests have multiple roles in supplying raw materials for industry and energy production, climate change mitigation, and in provision of ecosystem and recreational services, comprehensive assessments are needed to reach balanced and sustainable use of forests. Careful management and sustainable use of forest resources can lead to greater climate benefits in the long run by preserving forests as a continuous storage of carbon, and a source of renewable materials and energy. This report summarises the research-based results of the use of forest biomass for energy in Northern European conditions. It discusses the trade-offs and winwin situations of growing forests, sequestration of carbon and using the wood also for energy - in an economically viable and ecologically sustainable manner. The topic is approached from several viewpoints: First, development of forest resources in the EU and in Finland is presented, and a background for the discussion on how much and what kind of wood is used for energy production is provided (Section 2). Second, ecological and climate impacts of the use of forest energy are discussed (Sections 3 and 4). Third, the role of forests in international climate policy and future EU regulations (Section 5), and the specific features of cascading use of wood in fibre producing countries (Section 6) are discussed. In addition, remarks on the economics and the future role of forest energy in lowcarbon scenarios are presented (Section 7). Finally, the conclusions and recommendations concerning forest energy use are provided (Section 8).

A recent paper by Searchinger highlighted that Annex-1 nations do not count CO2 emissions due to combustion of biomass in their commitments. This is because it is assumed that emissions from use of biomass are accounted for in the land use sector, where they should appear as reductions in carbon stocks. However, if the biomass comes from a non-Annex 1 country, these reductions are not counted within the Kyoto Protocol. Indeed, even Annex 1 countries do not necessarily fully account for carbon stock losses associated with bioenergy. This results in overestimating the mitigation benefits of bioenergy. - The problem can be rectified by modifying the accounting system, adopting new policy measures or a combination of both. In the paper, we describe possible options and policy measures to improve the accounting of emissions from bioenergy. The pros and cons of the identified solutions are also discussed.