Forestry Program

Changing Patterns of Supply ― Illegal Logging

Sten NilssonIIASA Laxenburg, Austria

Forest Governance and Trade: Exploring Options 24 January 2007, Chatham House, London, UK

Forestry Program

Illegal LoggingTotal 350–650 million m3/year

Illegal logging 20–40% of industrial wood production

350–650million m3 ?

1600million m3

Official global industrial wood production/year

Forestry Program

Total Industrial Wood Fiber Consumption

Source: Perez-Garcia, 2004.

Global Industrial Wood Consumption

0

500

1000

1500

2000

0 10 20 30 40 50

GDP (Trillion US$)

Mill

ion

m3.

1%

Forestry Program

Industrial Global Wood Consumption in billion m3

Current 2030

~1.6 ~2.5 High

~2.0 Low

Forestry Program

Energy Use of Total Wood Consumption

Pan-Europe ~65%

North America ~35%

Forestry Program

Triangle of Problems/Solutions

Economic Growth

Energy Security Climate Change/Environment

Forestry Program

Biomass and Energy

Bioenergy: Electricity and Heat

from Biomass

Liquid Biofuels for Transportation

Biogas

Hydrogen

Forestry Program

Integrated Biorefinery Approach

BioethanolEsterification

Methanol

Herbaceousbiomass

Torrefaction

Biomasspre treatment

Oil/sugarseparation

Flash pyrolysis

Syngas Production

SynthesisBiodiesel

DME

Chemicals

Woodybiomass

Plantation

Plastics

Electricity

Gas cleaning

tars

SLURRY

Waste material

BioethanolEsterification

Methanol

Herbaceousbiomass

Torrefaction

Biomasspre treatment

Oil/sugarseparation

Flash pyrolysis

Syngas Production

SynthesisBiodiesel

DME

Chemicals

Woodybiomass

Plantation

Plastics

Electricity

Gas cleaning

tars

SLURRY

Waste material

Source: Girard and Fallot (2006)

Forestry Program

Value Added Production in Biorefinery

Pulp/Paper

Value Added

Source: Hildingsson (2006)

Forestry Program

Competitiveness of Biofuels

Agriculture-based ethanol ~70$/bbl

Brazilian ethanol ~50$/bbl (including fuel economy penalty)

First generation biodiesel Hardly competitive

Second generation (post 2010) biomass-to-liquid from forest biomass

~50$bbl

Second generation (post 2010) lingo-ethanol

~50$/bbl

Forestry Program

GHG Reduction Cost Expectations for 1st and 2nd Generation Biofuels

Source: Adapted from WWI/GTZ (2006)

Biodiesel F-T (IEA)

Biodiesel rapeseed (EU)

EtOH cellulose (IEA)

EtOH wheat (EU)

EtOH maize (US)

EtOH sugar cane (Brazil)

Biodiesel rapeseed (EU)

EtOH cellulose (IEA)

EtOH wheat (EU)

EtOH maize (US)

EtOH sugar cane (Brazil)

€/t CO2 equivalent

- 100 0 100 200 300 400 500 600 700 800

2002

Post-

2010

- 100 0 100 200 300 400 500 600 700 800

2002

Post-

2010

Post-

2010

Lower limit Upper limit

Forestry Program

Wood Balance for Pan-Europe (million m3)

2030

Basic demand expressed as annual

fellings (EFSOS/UN, 2005) 680

Sustainable fellings (EFSOS/UN, 2005) 630–660

Basic demand and EU targets 1180

Forestry Program

Internationalization of Bioenergy Trade

Source: Obersteiner and Nilsson (2006)

Forestry Program

Shifting of Land-use Frontiers

Source: Fallot et al. (2006)

Forestry Program

Paper and Paperboard Development in China

Ningbo Xiaogang PM1 World’s largest machine for white-lined chipboard

Shandong Chenming PM4 The world’s largest newsprint machine. China has the 3 fastest newsprint machines in the world

APP/Gold Hong Ye The world’s 2nd fastest tissue machine

Shandong Bohui The world’s largest folding boxboard machine

APP China Gold East at Dagang Has set 6 world speed records for paper machines

APP Gold East in Jiangsu Building the world’s largest printing and writing machine

Source: after Flynn (2006)

Forestry Program

Wood Supply ― Pan-Europe

2030 2040

–50million m3/year –50 million m3/year

Forestry Program

Highway Conditions between Moscow and Novosibirsk, 2006

Forestry Program

Opportunities: Changes in RussiaDisproportion of Harvesting Volumes and

Timber Processing Capacities

Source: Federal Russian Forestry Agency

Forestry Program

Proposed Export Taxes on Roundwood in Russia

2006, April: Coniferous roundwood 6.5% of export value or

minimum 4€/m3

2007, 1 July: 10% of export value, minimum 6–9€/m3

2008, 1 July: 12–13.5% of export value, minimum 12–14 €/m3

2009, 1 July: 15–17% of export value, minimum 18–19 €/m3

2010, 1 July: 20% of export value, minimum 24 €/m3 and

change of custom declaration fee,

currently 0.28 €/m3―future (no date given) 6 €/m3

Source: Palenova (2006)

Forestry Program

China’s Industrial Roundwood Removal

Official forecasts Natural forest = 195 million m3

Plantation (fast growing) = 133 million m3

Total industrial roundwood removal = 328 million m3

0

50

100

150

200

250

300

350

1995 2000 2005 2010 2015Time

000

000

m3

low base high

328

Sources: Zhou, 2001; Bull and Nilsson, 2004

Forestry Program

Current Situation by CountryMalaysia Harvest of logs 1990: 40 million m3; 2005: 20 million m3.

About 15 million m3 of industrial wood consumed of unknown origin

Indonesia “Legal harvest” 20–25 million m3; Illegal harvest 30–35 million m3; approaching the end of timber mining possibilities

Thailand Natural forests: 20,000 m3. Plantations about 8 million m3

Laos Official harvest: 1 million m3/year; real: 2–3 million m3

Cambodia 4–5 million m3/year―most of it illegal

Myanmar 5.5 million m3/year. Remaining harvest in supply regions for China: 15 years

PNG Harvest in 1994: 2.7 million m3; 2004: 1.8 million m3 (Remaining mature natural forest harvest at current rate: 15–20 years)

Vietnam ~4.5 million m3/year of which about 1.5 is illegal

Forestry Program

Latin America: Total Wood Balance

Source: Personal communication, Serrano (2006).

million m3

Possible sustainable wood supply

Wood utilization

550

620690

705

2003 2020

Forestry Program

Assessed Roundwood Consumption and Harvest in the USA

Source: After Persson (2006)

Million M3 RWE

Consumption

US Production

Forestry Program

Plantation RatesAustralia In 2000: 137500 ha/year; in 2003: 43200 ha/year;

in 2005: cap on plantations

New Zealand In 1995: 100000 ha/year; in 2004: 14900 ha/year

Indonesia In 1997: 230000 ha/year; in 2004: 78000 ha/year

Philippines Hardly any plantations since 1997

Thailand Plantation boom 1986–1997; now faded away

Cambodia Between 1985–2002: Total 11000 ha

PNG Between 1996–2004: Total 2300 ha

India Decreasing plantation rate

South Africa Plantation boom over

Chile Plantation boom over

USA Decreasing plantation rate

Japan In 1970: 35000 ha/year; 1990 hardly anything

Forestry Program

Softwood Plantations

0.00

1.00

2.00

3.00

4.00

5.00

6.00

1991-2003 2003-2010 2010-2020

Source: Global Wood Products and Market Trend, Taylor (2005).

CAGR %

Area Growth in Softwood Plantation Forest Slowing Down; Limiting Future Supply of Softwood Fiber

Round the corner ― land reforms?

Forestry Program

The Way Forward “Good Society” ― minimum standards of living,

education, security, health care, etc.

Combined strategies for economic growth, malnutrition, poverty and agriculture development

Countries with GDP higher than $4600/capita increased growing stock and forest area during 1990–2005

Economic growth foreseen by the World Bank means that countries like China, Mexico and Turkey will have average loving standard comparable with Spain today

Stimulate this development