Energy vs. material: Economic impacts of a “wood-for-energy scenario” on the forest-based sector in Austria — A simulation approach

Published Date
Forest Policy and Economics
January 2010, Vol.12(1):31–38, doi:10.1016/j.forpol.2009.09.004
Forest sector models and their application

• Author 

• Peter Schwarzbauer ^a,,
• Tobias Stern ^b

• aUniversity of Natural Resources and Applied Life Sciences Vienna, Institute of Marketing & Innovation, Feistmantelstraße 4, A-1180 Vienna, Austria
• bKompetenzzentrum Holz GmbH (Wood K plus), Market Research Team, Feistmantelstraße 4, A-1180 Vienna, Austria

Received 12 September 2008. Revised 21 July 2009. Accepted 3 September 2009. Available online 16 October 2009. 

Abstract

In this paper, a simulation model of the Austrian forest-based sector (FOHOW) was used to assess the effects of increasing wood utilization for energy production on the Austrian forest-based sector. In order to reflect the political targets regarding the use of renewable energy a “wood-for-energy” scenario was developed and compared with a “business-as-usual” base-scenario up to the year 2020.

The analysis shows that the rising fuelwood demand in the “wood-for-energy” scenario would clearly lead to a much stronger competition for small roundwood (pulpwood) and sawmill residues. Compared to the base scenario, this competition would increase pulpwood prices and — to some extent — forest product prices (especially sawmill residues and pulp).

In general, forestry and sawmills would be the winners, the panel and paper industries would be the losers of a “wood-for-energy” policy. The panel and paper industries would face decreased gross profits, because of two developments happening at the same time: a decrease in production and an increase in costs (roundwood and sawmill residues) beyond the increase of forest products prices.

The analysis also reveals that the additional demand for fuelwood could only be met by an additional supply from the Austrian forests — if the fuelwood price was attractive enough (by 2020 more than 50% higher than in the base-scenario) for the forest owners.

Keywords

Fuelwood

Roundwood markets

Wood products markets

Energy production

Simulation model

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