By Lauri Hetemäki, Professor of Practice, University of Helsinki and Marc Palahí, Director, EFI
Recently, Jason Mitchell argued that “Net zero could drive up the global demand for timber, putting at risk the world’s forests” and that we will face wood shortage in the future. He concluded that “Currently, humanity is asking too much from the world’s forests” (Mitchell 2022). Here, we ask whether this is indeed the case?
Generally, it is thought that the development of the forest bioeconomy will increase the demand for wood resources. At the same time, there is an increasing demand for forests, for example for carbon sequestration and biodiversity purposes. Therefore, it is often concluded – like Mitchell does – that the scarcity of wood resources is increasing in the future.
Maybe, or maybe not. In Hetemäki et al. (2020) we speculated: What will the future demand for roundwood be? Our conclusion was that we do not really know if there is enough wood for future purposes – it depends on many factors.
Few studies on the subject have brought out the fact that we do not actually know what the net effect of forest bioeconomy development will be for the demand for roundwood. Yes, new bioproducts usually increase the demand for wood. On the other hand, many of these products make use of the side streams of current products (lignin, wood chips, sawdust, etc.) and do not increase the demand for roundwood as such (Hurmekoski et al. 2018). Technological development, increasing cascading use and circularity will most likely reduce the future use of wood per end product unit. In other words, more is made from less.
The demand for some current forest industry products is decreasing, especially paper used for communication purposes. If, for example, the world’s communication paper consumption were to decrease by 2050 at the same rate as in the past 15 years, it would mean a reduction of industrial wood for this purpose by around 450 million cubic meters. That is, more than the entire EU27 industrial wood production in 2020 (378 Mm3).
In the long term, a decrease in the energy use of wood is also on the horizon. Globally, about half of the wood production goes for energy purposes and the other half for industrial purposes. In Africa, about 90% of the wood consumption is for energy purposes, and in Asia 57%. With the development of other forms of energy (solar, wind, hydro, etc.) and the use of more resource-efficient wood energy technology, the demand for roundwood for energy purposes may be several hundred million cubic meters less in the coming decades.
On the other hand, history shows that roundwood consumption has increased quite moderately despite the rapid economic and population growth (see Figure below). For example, from 2000 to 2020 the global roundwood consumption increased only by 12%, despite real GDP growing by 70% and population by 27%.
It is often thought that there is a trade-off between forest bioeconomy development and biodiversity and forest carbon sinks. Therefore, it is concluded – like Mitchell (2022) does – that increasing needs for biodiversity and forest sinks will inevitably reduce future wood supply for bioeconomy purposes. However, it appears that the issue is not so simple. Some studies show that whether there are trade-offs or synergies between wood production and biodiversity and forest carbon sinks, depends on the specific context and forest management measures taken (Biber et al. 2020, Díaz-Yáñez et al. 2020, Vera et al. 2022).
This conclusion seems to be supported also by historical evidence. The development of the European Union’s forest resources since the 1950s show that it is possible to increase wood production, while accumulating more carbon and expanding the forest area and protected areas (see Figure below). Looking at the data in more detail since 1990 shows that the EU27 forest area has increased by 14 million hectares (10%), equivalent to almost the combined total land area of Austria, Belgium and the Netherlands (Hetemäki, Kangas & Peltola 2022). From 1990 to 2020, the EU27 volume of wood in forests––the growing stock–– increased by 42% and the total carbon stock in the forest by 43%. The forest protection area is a more ambiguous concept and different statistics have been provided by different sources. However, according to EUROSTAT “the forest area with protective function” has increased in the EU27 from 18.4 million hectares in 1990 to 38.1 in 2015 (the last year data available), i.e. it has doubled. Yet, from 1990 to 2020 the EU27 has also increased its annual roundwood production by 29%. In summary, the EU has in the last decades increased wood production substantially, but as well increased forest area, forest carbon stock and protection.
Such a development has been possible due to many different factors, but one of them has been the important long-term investments to forest management and innovation (Mauser 2021). These investments have also been a necessary factor behind the fact that with only 4% of the world´s forests, EU is providing for over 40% of the global forest products export value (Hetemäki, Kangas & Peltola 2022). Due to this significant position, the EU has an opportunity to play a major role in innovating new and more resource-efficient bioproducts and advance the replacement of fossil-based raw materials and products, i.e. help to enhance sustainable production and consumption.
On the other hand, a recent World Bank (2022) report highlights why ecosystem restoration (including forest restoration) has failed to scale-up despite the number of international initiatives and pledges in recent years. The report shows that a multi-finance approach that brings together public, philanthropic, institutional investors as well as corporations in need to decarbonise the global products value chains is required to succeed. This type of financing is the key to be able to bring hundreds of millions of hectares of degraded and deforested landscapes into restoration by 2030, as e.g. the Bonn Challenge requires. It has been projected that sustainable supply chain finance markets will reach one third of the total supply chain financing, or US$660 billion by 2030 (Bancilhon et al., 2018). Many business sectors, such as the fashion, construction and packaging industry need to shift their value chains to non-fossil, sustainable and traceable ones. In this, wood-based solutions will play an increasingly important part. Therefore, forest bioeconomy is likely to play a major role through which private funding can be deployed at scale for forest restoration. Synergies between the increasing demand for bioeconomy products and forest restoration is not only possible, but it needs to be an important strategy to address the climate and biodiversity crisis.
It is worrying that at the global level deforestation has continued in this century, albeit with the slower pace than in 20th century. But in terms of growing wood stock, the FAO data shows an increase of 250 million cubic meters in this century. Thus, theoretically there is a bit more wood available now than two decades ago. However, in terms of environmental and socio-economic availability of this, it is uncertain how much of it could actually be supplied to markets. Indeed, it seems evident that also new forest plantations are needed, not least because of the expected increase in wood construction. Mishra et al. (2022) argue that forest plantation increase by 149 million hectares by 2100 would be needed for wood construction purposes, and that this “… is possible without major repercussions on agricultural production.”
In summary, the net impact of different drivers for global roundwood demand and supply is uncertain. This uncertainty is increased by the fact that the topic is hardly studied. We rely largely on educated guesses and consultant information, and on studies that do not take into account the major structural changes that the wood markets have faced and will be facing in the future. This is particularly puzzling, considering how important the issue is. More resources and efforts should be invested to do systematic research on the global demand and supply of roundwood!
Bancilhon, C., Karge, C. and Norton, T. 2018. Win-Win-Win: The Sustainable Supply Chain Finance Opportunity. Paris: Business for Social Responsibility. https://www.bsr.org/en/reports/win-win-win-the-sustainable-supply-chain-finance-opportunity
Biber, P., Felton, A., Nieuwenhuis, M., Lindbladh, M., Black, K., Bahýl, J., Bingöl, Ö., Borges, J.G. et al. 2020. Forest biodiversity, carbon sequestration, and wood production: modeling synergies and trade-offs for ten forest landscapes across Europe. Frontiers in Ecology and Evolution, No. 8. e547696. https://doi.org/10.3389/fevo.2020.547696
Díaz-Yáñez, O., Pukkala, T., Packalen, P., Lexer, M. & Peltola, H. 2020. Multi-objective forestry increases the production of ecosystem services. Forestry 94:1–9. https://doi.org/10.1093/forestry/cpaa041
Hetemäki, L., Palahi, M. & Nasi, R. 2020. Seeing the wood in the forests. Knowledge to Action, No.1, European Forest Institute. https://doi.org/10.36333/k2a01
Hetemäki, L., Kangas, J. & Peltola, H. (eds.) 2022. Forest Bioeconomy and Climate Change. Springer Cham. https://doi.org/10.1007/978-3-030-99206-4
Hurmekoski, E., Jonsson,R., Korhonen, J., Jänis, J., Mäkinen, M., Leskinen, P. & Hetemäki, L. 2018. Diversification of the forest industries: Role of new wood-based products. Canadian Journal of Forest Research, 48(12). https://doi.org/10.1139/cjfr-2018-0116
Mauser, H. 2021. How have forest resources in the European Union developed? https://efi.int/forestquestions/q15
Mishra, A., Humpenöder, F., Churkina, G. et al. 2022. Land use change and carbon emissions of a transformation to timber cities. Nature Communications 13. https://doi.org/10.1038/s41467-022-32244-w
Mitchell, J. 2022. Net zero could drive up the global demand for timber, putting at risk the world’s forests. Investment Monitor, 9 November 2022. https://www.investmentmonitor.ai/analysis/net-zero-drive-up-global-demand-timber-forests
Vera, I., Wicke, B., Lamers, P., Cowie, A., Repo, A., ……, van der Hilst, F. 2022. Land use for bioenergy: Synergies and trade-offs between sustainable development goals, Renewable and Sustainable Energy Reviews, Vol 161. https://doi.org/10.1016/j.rser.2022.112409.
World Bank 2022. Scaling Up Ecosystem Restoration Finance: A Stocktake Report. World Bank, Washington. https://openknowledge.worldbank.org/handle/10986/38311
 https://ec.europa.eu/eurostat/databrowser/view/for_profnc/default/table?lang=en Data for this time series is incomplete, as only 9 member states have reported data from 1990 and 17 from 2000 onwards. For the 17 countries that have time-series from 2000 to 2015, the protected area has increased from 27.6 Mha to 31.5 Mha.
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