This brief presents alternative future scenarios of the European forest products markets developed in the BioMonitor project.

This brief presents alternative future scenarios of the European forest products markets developed in the BioMonitor project as part of the European Union (EU) bio-based industry integrated modelling assessment (Philippidis et al., 2024). EU and Global Forest sector alternative trends presented in this article are projected using a Global forest sector model EFI-GTM from Kallio et al. (2004).

Business as usual reference scenario (BRS)

The ‘Business as usual reference’ scenario (BRS) outlines the projected trajectory of current trends and societal attitudes within the bioeconomy sector over the next thirty years without significant policy or societal shifts.

This three-decade timeframe, starting in 2020, aligns with the EU policy framework, using 2030 and 2050 as key reference points. The BRS draws upon Keramidas et al. (2021) publication “Global Energy and Climate Outlook (GECO 2021)” Reference scenario as a consistent and official source for projections related to the EU and global economy, population dynamics, climate conditions, and energy markets.

The BRS adheres to the assumptions outlined in the GECO 2021 Reference scenario regarding real GDP growth, population trends, fossil fuel prices, energy market transitions, and carbon tax policies. While the GECO 2021 Reference scenario anticipates some level of decarbonisation in energy markets driven by fossil resource depletion and technological advancements, it does not incorporate any additional climate commitments beyond 2017 or specific investment strategies to foster a more responsible and sustainable growth model.

Go-it-alone scenario (GIA)

In contrast to the BRS, the ‘Go-it-alone’ (GIA) scenario envisions a sustained proactive approach to biomass mobilisation and utilisation within the EU by the year 2050. Building on insights from Churkina et al. (2020), the GIA scenario anticipates increased utilisation of biomass in construction, with a particular focus on wood-based materials. Additionally, the demand for wood-based textiles and packaging materials within the EU is projected to triple compared to the BRS.

The GIA scenario assumes a corresponding increase in the availability of woody biomass, driven by research and development efforts aimed at enhancing forest productivity and improving mobilisation techniques, as highlighted in the work of Verkerk et al. (2018). These advancements are expected to contribute to a more sustainable and resource-efficient approach to biomass utilisation within the EU.

Hand-in-hand scenario (HIH)

The ‘Hand-in-hand’ (HIH) scenario expands upon the proactive approach outlined in the GIA scenario by extending the driver settings and initiatives implemented within the EU to encompass the global scale. The HIH scenario envisions a collaborative and coordinated effort among nations to embrace sustainable biomass mobilisation and utilisation practices.

By extending the principles of the GIA scenario globally, the HIH scenario aims to foster international cooperation and solidarity in addressing key challenges related to biomass utilisation and sustainability. This includes efforts to enhance forest productivity, improve mobilisation techniques, and promote the use of biomass in various sectors such as construction, textiles, and packaging materials.

Overall, the HIH scenario represents a vision of global solidarity and collective action in promoting sustainable biomass utilisation practices to achieve long-term environmental, social, and economic benefits for all nations involved.

Bio-ecoresilience scenario (BER)

The ‘Bio-ecoresilience’ (BER) scenario delves into the resilience and potential opportunities within the EU bioeconomy, motivated by a more environmentally conscious global order. Building upon the foundation laid by the HIH scenario, BER envisions a world where a more rigid climate policy and sustainable reforms in global bioenergy markets are implemented.

In this scenario, rising carbon taxes and corresponding reductions in global greenhouse gas emissions are modelled, aligning with the objectives outlined in a GECO ‘two-degree’ scenario and reflecting the commitments of the Paris Agreement. This means a concerted effort to mitigate climate change and transition towards a more sustainable and resilient bioeconomy on a global scale. By embracing stricter climate policies and sustainable practices in bioenergy markets, the BER scenario aims to foster greater resilience within the EU bioeconomy while capitalising on emerging opportunities presented by a greener global world order.

Through proactive measures and collaborative action, this scenario envisions a future where sustainable bioeconomic practices contribute to long-term environmental stability and economic prosperity.

Wood-based market scenarios

In the EU27 region, the highest increase in sawnwood production, approximately 20 million m3, is observed in the HIH and BER scenarios, with a slightly smaller increase in the GIA scenario. However, wood-based panel production in the BER scenario is projected to decrease by 17.4 million m3 by 2050 and, in the HIH scenario, by 12 million m3 (Figure 1).

This reduction in wood-based panel production is likely due to increased wood-based textile production by approximately 6.5 million tonnes in the EU region, which would require around 37­–38 million m3 of industrial roundwood (primarily pulpwood) (Figure 2).

This diverted wood could alternatively be used for wood-based panels, leading to increased imports of these products into the EU region from the rest of the world (RoW). It’s important to note that when considering wood-based product production in terms of wood raw material consumed, both sawnwood and wood-based textile production increases in the EU region would require a similar amount of wood in 2050.

The increase in RoW sawnwood production levels in the HIH and BER scenarios is more than twenty times higher than in the EU region, primarily due to much higher population growth (with lower starting per capita consumption levels also playing a significant role). While the increase in industrial roundwood harvest levels is highest in both the EU and RoW regions, this increase is disproportionately high in the EU in the HIH and BER scenarios. This is because the demand for wood and wood-based products is much higher in the RoW region, which needs a portion of the extra harvest in the EU to satisfy RoW wood biomass demand.

In 2020 and 2050, across all alternative scenarios, the relative shares of both mechanical and chemical wood industries are approximately equal. The total EU27 demand is projected to increase from 507 million m3 roundwood equivalent (RWE) in 2020 to 561 million m3 in 2050 in the BRS and to 650 million m3 in all alternative scenarios (16% additional growth on top of BRS scenario 2050 level, as set by scenario assumptions) (Figure 3). The main variation occurs in production and net trade (export) volumes.

In all alternative scenarios, EU total production exceeds total demand, resulting in a positive total forest industry net export in all cases. However, the total net export in 2050 is highest in the BRS scenario and lowest in the GIA scenario. The highest total forest industry production is projected in the HIH scenario.

Despite an additional demand for sawnwood, carton board, and wood-based textiles, resulting in an extra total demand of 90 million m3 RWE in 2050, only 38 million m3, 68 million m3, and 55 million m3 RWE are supplied from EU domestic production in the GIA, HIH and BER scenarios respectively, thereby showing the lowest additional production growth of 5.9% and lowest self-sufficiency of the EU forest industry under GIA and the highest production growth of 10.5% under HIH scenario in 2050 (Figure 3).

In the GIA and HIH scenarios, the EU27 supply of industrial roundwood for forest industries increases only marginally from 382 million m3 in the BRS in 2050 to 399–404 million m3 (4–6% increase) (Figure 4). Despite the marginal change in industrial roundwood consumption, recycled paper consumption increased by 9% under GIA and HIH scenarios in 2050 relative to the BRS level. Wood residues are projected to grow 2050 by 6.7%, 34% and 21% under GIA, HIH and BER scenarios, respectively (Figure 4). Therefore, higher utilisation of wood residues and recycled paper is projected to drive higher production growth in the EU, especially in the HIH scenario.

In the BER scenario, industrial roundwood demand for EU forest industries rises to 420 million m3 (10% increase), reflecting a higher increase due to tighter competition for wood biomass between materials and energy.

Despite the relatively modest increase in industrial roundwood consumption for EU wood-based products production, EU27 harvest levels increased by 107 million m3 in the HIH scenario and 116 million m3 in the BER scenario. This increase far exceeds the rise in wood biomass consumption by EU forest industries. Therefore, the surplus of additional EU harvest is intended to meet the increased demand for wood biomass from the rest of the world.

The European Union’s forest sector faces a complex future, influenced by many factors, including demand growth, environmental policies, and global market dynamics. While the EU’s demand for forest products is anticipated to rise, it is projected to do so more conservatively than the worldwide market.

This disparity is especially strong in the GIA scenario, where the EU experiences the least growth in forest product production. Such an outcome may intensify the challenges for the EU forest industry, particularly in terms of self-sufficiency – as it struggles to meet internal demand without relying on imports. On the contrary, in the HIH scenario, with the EU coordinating strong bioeconomy growth globally, there is a low disparity between demand and production growth. European forest sector self-sufficiency is at its highest level among all alternative scenarios.

References

Churkina, G., Organschi, A., Reyer, C.P.O., Ruff, A., Vinke, K., Liu, Z., Reck, B.K., Graedel, T.E., & Schellnhuber, H. J.2020. Buildings as a global carbon sink. Nature Sustainability. https://doi.org/10.1038/s41893-019-0462-4

Kallio, A.M.I., Moiseyev, A. & Solberg, B. 2004. The Global Forest Sector Model EFI-GTM – The Model Structure. Internal Report 15. European Forest Institute. https://efi.int/sites/default/files/files/publication-bank/2018/ir_15.pdf

Keramidas, K., Fosse, F., Diaz Vazquez, A., Dowling, P., Garaffa, R., Després, J., Russ, H.P., Schade, B., Schmitz, A., Soria Ramirez, A., Vandyck, T., Weitzel, M., Tchung-Ming, S., Diaz Rincon, A., Rey Los Santos, L. & Wojtowicz, K. 2021. Global Energy and Climate Outlook 2021: Advancing towards climate neutrality. Publications Office of the European Union. https://publications.jrc.ec.europa.eu/repository/handle/JRC126767

Philippidis, G., Álvarez, R.X., Lucia, Di L., Hermoso, H.G., Martinez, A.G., M’barek, R., Moiseyev, A., Panoutsou, C., Itoiz, E.S., Sturm, S., Leeuwen, M., Zeist, W-J. & Verkerk, P.J. 2024. The development of bio-based industry in the European Union: A prospective integrated modelling assessment. Ecological Economics. https://doi.org/10.1016/j.ecolecon.2024.108156

Verkerk, P.J., Ball, I., Dzene I., Janssen, R., Lindner, M., Moiseyev, A., Michel, J., Witzke, P., Zazias, J. & Chartier, O. 2018. Research and Innovation Perspective of the mid-and Long-term Potential for Advanced Biofuels in Europe. D1.2 Research and innovation scenarios for biomass potential. Directorate-General for Research and Innovation (European Commission). https://doi.org/10.2777/557801

Learn more

BioMonitor project: https://biomonitor.eu/

FAOSTAT. Food and Agriculture Organization of the United Nations (FAO). Forestry Production and Trade. https://www.fao.org/faostat/en/#data/FO

Featured photo by Maksim Shebeko