Bioenergy production to improve value-creation potential of strategic forest management plans in mixed-wood forests of Eastern Canada

Abstract

The relationship between forest management and biomass sourcing is fundamental to the achievement of sustainable bioenergy production. Few biomass-sourcing studies have directly addressed the complex interactions between sustainable forest management and additional demand created by bioenergy production. The first objective of this research was to provide a method for estimating profits for a value chain that harvests volumes scheduled in a sustainable forest management plan. The second objective was to measure the financial and sustainable benefits generated by integrating bioenergy production into this value chain. Using data from a large management unit, a forest management plan was developed to generate an annual flow of timber that can be produced sustainably. We then proposed a network flow optimization model that links the optimal solution of a long-term wood supply optimization model with the processing capacity of an industrial network. Results revealed that the weak demand for lower-quality trees could be a serious impediment to achieving full value-creation potential. Simulations of the implementation of a hardwood pellet mill improved the value-creation potential for hardwood pulp (direct effect) and also for other wood products by providing access to otherwise unprofitable mixed-wood forest strata (synergistic effect). Our experiment showed that integrating a lower-quality timber user, such as a bioenergy production unit, could lead to higher financial profits (up to three-fold), and improve alignment between the sustainable forest management objectives and the industrial network capacity (harvested scheduled area increased from 79% to 98%). Implementing a bioenergy mill also grants a higher return on capital employed compared to historical values for the manufacturing sector. Strengthening the link between strategic planning and industrial processing capacity provides new insights into the impact on value-creation of bioenergy production from forest biomass.