Possibilities of sustainable woody energy trade and impacts on developing countries

Jan 2014

Many OECD countries, particularly within the EU, have set ambitious plans for the use of woody bioenergy. While the woody biomass consumed for household
use is most likely to be sourced locally and is quite independent from public support, large-use consumption, especially for co-firing, is driven by policy and energy sector decisions and requires trade of large amount of woody biomass.
The volume of imports of woody biomass in the EU will depend on a range of factors such as the capacity and price to mobilize domestic resources, on policy
support measures as well as the price of fossil fuels, and CO2 certificates. In developing countries, about 2.6 billion people rely on inefficient, unhealthy
and often unsustainable consumption of mostly woody biomass to cover basic energy needs such as cooking. Despite international and multilateral initiatives
to reduce dependency on unsustainable wood supply and use, the amount of people dependent on woody biomass is not expected to change much in the coming years.
At present, increasing global demand and international trade of woody bioenergy (mainly in form of pellets) is met by well-positioned countries such as
Canada, USA and Russia. These countries have not only the largest forest areas, but also infrastructures, expertise and capabilities to continue being suppliers to international woody bioenergy markets. Particular emerging countries, especially Brazil, may enter the global woody bioenergy market if bioenergy costs are competitive. The higher the international demand, the easier emerging and developing countries might enter the market, with impacts on:
- Offering opportunities of investment and economic development
- Recognizing the importance of sustainable woody bioenergy for domestic supply both at small-scale and large-scale. This may lead to improve governance of the forest sector in general and contribute to achieve domestic renewable energy goals.
- Moving woody bioenergy higher on the international renewable energy agenda.
To avoid negative impacts and maximize benefits for emerging and developing countries, the production and trade of woody bioenergy need favorable national
and international framework conditions and agreed sustainability criteria need to be applied.
The sustainability of woody bioenergy from forests and plantations depends on forest and land use management, and fuelwood demand in households. The
“domestic fuelwood first” principle needs to be respected.
As a way forward this study suggests a three-fold approach:
1. Importing countries - especially in the EU - need to conditionalize preferential treatment of woody bioenergy in their renewable energy support policies to establish mandatory sustainability safeguards, building upon current international forest and timber trade regulations and private sector initiatives to avoid illegal logging and deforestation. To avoid divergence of national sustainability schemes and respective proliferation which would hamper international trade, the legally binding sustainability requirements of the EU Renewable Energy Directive need extension to also cover woody bioenergy for electricity and heat.
2. Exporting countries in emerging and developing countries need improved domestic forest and land tenure policies to address social and environmental risks. Given the rising demand of woody bioenergy, this needs better recognition in international processes such as the EU FLEGT Action Plan, GBEP and REDD+.
3. International finance institutions such as the GEF, the World Bank and bilateral donors should require sustainability safeguards - including social
aspects - for woody bioenergy projects, and expand funding for capacity building on and implementation of the Voluntary Guidelines on the Responsible Governance Tenure of Land, Fisheries and Forests, and on voluntary forest certification standards as useful tools.

By: U. R. Fritsche, H. W. Gress, L. Iriarte (IINAS), S. Coelho, J. Escobar (CENBIO)

 
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