Effect of Policies on Pellet Production and Forests in the U.S. South

US Forest Service / by Karen Lee Abt, et al.

Current policies in the European Union (EU) requiring renewable and low greenhouse gas-emitting energy are affecting wood products manufacturing and forests in the United States. These policies have led to increased U.S. pellet production and export to the EU, which has in turn affected U.S. forests and other wood products manufacturing. At this time, the primary exporting region in the United States is the South, and the primary importing countries in the EU are the United Kingdom, Belgium, and the Netherlands. The policies and some Member State subsidies are expected to continue in place until at least 2020, with the potential to continue beyond that date. Key drivers of U.S. pellet feedstock supply include both the age structure of current timber inventory and the policies that define sustainability. Also influencing the effect of increased demand for timber for pellets are the price-inelastic supply and demand. A simulation of the market responses to increases in both pellet and other bioenergy demand in the U.S. South suggests that prices will increase for timber as harvest increases, and will in turn lead to long-term changes in inventory and forest land area.


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