Impact of large-scale Bio-CCS deployment on forest biomass competition and forest industry production

Abstract

This study investigates the implications of large-scale Bio-CCS deployment on forest-based biofuel, kraft pulp, and district heating production, focusing on the resulting biomass competition. Using the Nordic Forest Sector Model (NFSM) with a Bio-CCS add-on, we integrate negative emission trading into the EU Emissions Trading System across a range of CO2 price levels. The findings reveal that biofuel production increases with higher carbon dioxide prices, with different technologies demonstrating profitability at different price points. As CO2 prices rise, the competition for high-quality biomass intensifies between the biofuel and kraft pulp sectors, while district-heating biomass boilers serve as important buffers. Notably, The deployment of Bio-CCS in kraft pulp mills and biofuel plants significantly raises the demand for pulpwood, while district heating remains unaffected. As a result, district heating systems consume more forest residues and industrial residues. Consequently, increased use of Bio-CCS results in higher pulpwood and sawdust prices. The extreme test with a carbon price of 300€/tCO2 reveals a higher risk of carbon sequestration leakage, while the increased harvest levels in the studied areas remain sustainable. This modeling approach and its main conclusions offer valuable insights for other forest-based economies.