Search

Forestry and forest industries are important for regional income and employment in Norway as well as in most North European countries, but few studies exist about factors affecting the timber supply at regional level. The main objective of this study is to estimate aggregated regional timber supply elasticities for six regions in Norway. Thereby we also test for regional differences, focusing on wood prices, standing stock volume and interest rate as explanatory variables. We have used three different statistical models (fixed and random effects panel models and first difference models) on regional data from the Norwegian forest inventory on standing volume and official statistics on harvested volumes, interest rate and prices of sawlogs and pulpwood for the period 1996–2016. Statistically significant different price elasticities are found in 12 out of total 15 pairs of regions. The price elasticity was lower and the volume elasticity higher in the western region compared to the other regions. The first difference models are best with respect to specification tests. The use of region specific price elasticities gives slightly better fit for the panel data models than using a uniform price parameter. The results show that the econometric specification influence the parameter values, and it is thus complicated to directly compare results in different timber supply studies. Regional differences in timber supply are important to consider.

The Nordic power market The past has shown that some of the main power price drivers are quite unpredictable, while some major trends are quite certain. The joint Swedish – Norwegian green certificate system is well on track to reach the common goal of 28.4 TWh new renewable electricity production by 2020. The Swedish government has announced that it will prolong the green certificate system, while renewable support in Norway and Finland is uncertain after 2020. Still, wind investments are expected to continue at a fast pace beyond 2020 in the Nordic region. Although many hydropower projects have low costs, environmental restrictions in many rivers limit the potential. The main share of new hydropower will be small-scale run-of-river projects. The Swedish nuclear capacity is expected to decrease, while the capacity in Finland will increase. In total there will be a slight increase in the total nuclear power capacity toward 2030. We assume that fossil power generation will be phased out by 2030 in the Nordic countries. Despite low fossil fuel shares in the Nordic market, thermal power will continue to impact Nordic power prices through increasing exchange to/from the Continent and the UK. Energy intensity in households has started to decline and this is expected to continue to 2040, due to new building standards. The expected growth in population in the Nordic area contributes, however, in the opposite direction. An increasing number of electric vehicles will contribute to an increase in consumption. The Nordic countries have a large power intensive industry sector. The pulp and paper industry is currently consuming approximately 40 TWh annually. We expect a major transition of the forest industry away from paper production, contributing to a reduction in industrial consumption. A switch in the oil sector to electricity produced onshore may contribute to increasing demand. We also assume increasing demand from data centers in the Nordic region. Overall, the industry sector consumption represents the largest uncertainty in future demand. The growth in (variable) renewable power on the Continent will make investments in interconnection capacity more attractive – due to short-term price variations. The export capacity in the Nordic region is expected to increase to 14 GW by 2030. This is about three times the current capacity. The power price is expected to increase continuously toward 2050, with the largest effect in Denmark. The uncertainty regarding future power prices is, however, substantial; with the most important aspects of uncertainties being the price of fossil fuel (gas and coal), CO2-quotas price, the share of renewable energy in the power system, the capacity margins and the development in energy storage and consumer flexibility. Nordic heating and cooling markets Future energy consumption in heating and cooling depends on several factors. Improved building standards and higher outdoor temperatures imply reduced heat demand whereas population growth, fewer people per households and increased cooling demand implies higher energy use for heating and cooling. The total effects are unclear and depend on policies and regulations, including future energy costs that influence the profitability of energy efficiency investments. The current changes are also relatively slow due to slow rehabilitation and replacement rates in the building sector. The renewable share in heating and cooling is relatively low in many countries and replacement of fossil fuels with biomass represents the major potential for biomass in Europe. In the Nordic countries, replacement of fossil fuels in district heating in Denmark and Finland is important, whereas expansion of district heating is needed in Sweden and Norway as most of the existing district heating is based on renewables. Non-energy forest products markets Sawlog is the most important timber grade. In Norway it account for about 70% of the gross income to forest owners. The consumption, and thereby the production, is dependent on the construction activities (i.e. new houses) and the renovation of old ones. Data indicate a cyclic sawnwood sector, with roughly about 10 - 20 years cycles. The dissolution of the former Soviet Union around 1990 and the financial crisis in 2008 represents the two latest downturns in this segment. The short-term trend indicates a 3% p.a. increase in global sawnwood production. In the longer term, there is a large untapped potential in Europe in the sense that there is a large difference in per capita consumption of sawnwood across Europe. It is however not necessarily straight forward to change habits, building regulations etc, which may be needed in order to increase the use of wood in buildings. Newsprint and other printing and writing paper is on the decline globally and in most of the market analyzed in this report. The demand for graphic paper will not vanish, but there are no indications that we will see a large increase in demand in the future. The main reason for the decline is the shift from printed to digital media. It is reasonable to believe that developing economies will jump right to digital media. The short-term decline in global newsprint production is estimated to 4.8% p.a., while the decline in printing and writing paper is estimated to be 1.0% p.a. The products group “other paper and paperboard” comprises hygienic goods (e.g. tissue paper and disposable diapers) and packaging materials (e.g. paperboards), and the latter group is the dominant one. Except for the Americas where the production has been stable after the mid 90-ies, there has been increases in production in both Asia and Europe. Internet trade is probably the most important driver in the near past. The main drivers for hygienic products are economic development and age structure of the population. In the short term, we estimate the yearly increase to 3.0%. Societal demands for mitigation and adaptation to climate change will have implications for the forest sector. EU energy and environmental policies have the potential to advance a paradigm change towards a forest-based bioeconomy. This could mean the production of a wide array of (chemical) products like textile fibers (viscose) or construction materials like cross-laminated timber.

The wood pellet use in the heating and electricity sector has recorded a steady growth in the last years. IEA bioenergy task 40 carried out an update of the situation on the national pellet markets in the most relevant pellet producing countries and the global development as well. Various country specific data is collected and compiled for more than 30 countries, containing updated information about regulatory framework, production, consumption, price trends, quality standards and trade aspects. The analysis confirmed the positive development in terms of production and consumption of wood pellets in almost all countries. In 2015, more than26Mt of wood pellets have been produced and consumed worldwide. Technologies and markets become more mature. Increased international pellet trade needs to be supported by adequate frame condition not only for commerce, but also with regard to sustainability issues., Proceedings of the 25th European Biomass Conference and Exhibition, 12-15 June 2017, Stockholm, Sweden, pp. 1909-1912

Europas energisystem er i rask endring, med utfasing av fossile kraftverk og en kraftig vekst i uregulerbar fornybar kraft. Norge står i en særstilling med sin store andel regulerbar vannkraft og med økt utvekslingsskapasitet til resten av Europa vil fleksibilitet bli viktigere og mer verdifullt også i Norge. Hovedmålet med Flexelterm har vært å analysere hvordan samspill mellom kraftsystemet og termisk energi kan gi økt lønnsomhet i utnyttelsen av nasjonale energiressurser og bedret forsyningssikkerhet. Vi har blant annet sett på mulighetene for å benytte mer fornybar kraft i fleksible termiske systemer for gi bedre balanse i kraftsystemet, mer effektiv innfasing av fornybar kraft og reduserte kostnader i varmeproduksjonen. Selv om bruk av fjernvarme i Norge har økt markant de siste årene, er utbredelsen vesentlig mindre enn i de andre nordiske landene. Samlet produksjon av fjernvarme i Norden er ca 120 TWh, hvorav ca 4 prosent produseres i Norge. Særtrekk i Norge gjør at fjernvarme av naturlige årsaker vil ha en lavere utbredelse enn i de øvrige nordiske landene. Fortetting av eksisterende fjernvarmeanlegg og flere nærvarmeanlegg vil være de viktigste vekstområdene for fleksible varmeanlegg i Norge de neste årene. På nordisk nivå vil økt bruk av biomasse og fornybar kraft gi endringer i fjernvarmesektoren. Fleksibiliteten i oppvarmingssektoren består i at man anvender elektrisitet i oppvarmingssystemet når kraftprisen er lav og for eksempel biobrensel når kraftprisen er høy. Anlegg for kombinert kraft- og varmeproduksjon (CHP) kan i tillegg produsere elektrisitet når kraftprisen er normal eller høy. For å analysere effektene av et bedre samspill mellom el- og varmesektoren har vi anvendt en detaljert analysemodell for det nordiske kraft- og fjernvarmesystemet. I våre modellanalyser finner vi en årlig elkjelbruk i fjernvarmeanleggene i Norden på ca 10 TWh i et normalår. I et normalår øker gjennomsnittlig nordisk kraftpris med ca 5 prosent på årsbasis sammenlignet med et scenario hvor vi utelukker bruk av el i fjernvarme. I et vått år øker elforbruket med 16-17 TWh og kraftprisen øker med opptil 40 prosent som følge av bruken i fjernvarmesektoren. I kalde perioder er elkjel lite konkurransedyktig i et fjernvarmeanlegg og brukes bare sporadisk. Prisøkningen er derfor svært marginal i tørrår. Resultatene viser en systemmessig og samfunnsøkonomisk gunstig utnyttelse av elektrisitet – høy utnyttelse når krafttilbudet er høyt og prisene er lave og vice versa når krafttilbudet er lavt og prisene er høye. Utnyttelsen av fleksibilitetsmulighetene i nær- og fjernvarmesystem kan sannsynligvis spare samfunnet for store investeringer i mindre modne og mer kostbare løsninger som batterier og fleksible husholdningsapparater. Siden inntektene ved kraftsalg i markedet øker mest for de fornybare kraftteknologiene, vil en slik fleksibel bruk av elektrisitet i varmesektoren også innebære redusert behov for støtte til ny fornybar kraftproduksjon for å oppnå fornybarmål og utslippsmål i Europa.

The objective of this report was to review studies of relevance for the Norwegian forest carbon cycle and on that basis, indicate global warming impacts of possible changes in management and utilization of the Norwegian forest resources. In the photosynthetic process, forests sequester carbon dioxide from the atmosphere. Carbon is stored in living vegetation, dead organic matter, and soil. Intensive planting and afforestation in Norway between 1950 and 1990, in combination with relatively stable harvest levels well below annual growth during the last decades, have resulted in net carbon sequestration in forests equaling more than half the current national annual greenhouse gas (GHG) emissions. The the average forest age is increasing, and the forest growth and carbon accumulation rate is therefore projected to decline in the future given continuation of recent harvest levels. A range of studies at different scales with a variety of approaches have been carried out to assess the climate change mitigation possibilities in the forest sector. Prolonged rotations, afforestation, intensified planting, improved plant materials, changes of species, more fertilization and less thinning are all changes in the forest management that might enhance carbon sequestration. Use of bioenergy can reduce overall GHG emissions by replacing fossil fuels, and wood materials can substitute GHG-intensive materials such as concrete and steel. Studies of such substitution effects generally find a reduction in the GHG emissions when biomass systems are compared to fossil reference systems, as long as the permanent reductions in terrestrial carbon pools are small. However, the majority of these case studies assume carbon neutrality in the meaning that as new trees grow where the old ones are harvested, an amount of CO2 similar to the quantity emitted during combustion will be sequestered during the next rotation. This assumption of carbon neutrality is in line with the approach taken by the Kyoto Protocol, i.e. biogenic carbon flows are summarized without regard to the timing of each flow. However, since combustion of wood usually is less energy efficient / more carbon intensive than combustion of oil and natural gas, using wood instead of these fossil fuels for energy will in the short term lead to increased CO2 concentration in the atmosphere, creating a carbon debt and a corresponding CO2 pay-back time. If wood energy replaces power produced from coal, the net GHG emissions in the combustion process are approximately zero. The length of the pay-back time from increased harvest in Norway is mainly determined by the following factors: (i) the foregone sequestration in the harvested stand, (ii) how large share of the harvested biomass in the stand is utilized and the substitution effects of this utilization, and (iii) the initial growth of the new stand. With the present biomass utilization, forest growth and management in Norway, the length of this pay-back time is relatively long. A positive carbon price implies longer rotations for forest stands, the more if the sequestration in the existing stand is high, re-growth is slow and substitution effects low. However, at a certain point in time, a forest stand will reach a state of slow and eventually negative growth, and in this situation, harvest to replace fossil fuels followed by regeneration is more likely to improve the GHG balance also in the short run. Our main conclusions are: - Domestic and imported wood are to a large extent substitutes and changes in domestic harvesting levels can change harvesting levels elsewhere. Impacts of global GHG emissions of changes in domestic harvest levels require broader analyses than carried out in this study - Higher demand for biomass from forest in Norway is likely to be covered through a mix of increased harvest, higher harvest residue utilization, reduced wood consumption in the pulp and paper industries and more import. - With the present forest management and wood utilization, increased harvest in Norway as a result of growing demand for biomass in the energy sector, will in the short to medium term cause an increase in the GHG emissions to the atmosphere. If fossil-fuel based commodities are replaced, increased use of wood products will reduce GHG emissions in the long run. - Utilization of harvest residue for energy can be increased within the current harvest level and have positive GHG effects also in the short run (5-15 years). - Forest carbon sequestration can be increased by changing forest management practices: more fertilization, higher densities in planting, improved plant material, changed species, less thinning, and allocation of harvest to stands with current low growth, but with a potential of higher growth. Except for fertilization and allocation of harvest, these measures have limited carbon sequestration impacts in the short run, but considerable impacts in the medium and long run. - To improve the substitution effects of wood products and thus the GHG impacts of harvesting, it is important that the wood products actually replace fossil-fuel intensive products , that the most GHG-intensive fossil fuels and materials are replaced and that the wood product chain has high GHG efficiency. - The understanding of the development of old, dense stands is limited, and thus the carbon effects by keeping such stands far beyond regular forest management practices are uncertain, in particular for spruce and birch. - Impacts of the albedo effect of different forest management regimes are not yet well known, but some studies indicate that that it might be of a magnitude that could change the conclusions drawn when considering GHG only. If harvest in Norway increases and the use of oil and natural gas is replaced by forest bioenergy, the GHG emissions will increase in the short to medium run. However, given that increased use of biomass substitute fossil fuels or materials, increased use of biomass will reduce GHG emissions in the long run. An important question is therefore what the relevant time horizon for global warming mitigation efforts is. The optimal mitigation strategy will depend upon this chosen time horizon. To assess the pros and cons of short term versus long term emissions, one needs to broaden the scope from pure GHG emission calculations to the entire climate system and include non-GHG effects like reflections from the forest surface (albedo). Albedo effects may imply shorter rotations, more broadleaves and less afforestation compared to what is optimal when considering GHG effects only. The net wood import accounts for 20-30% of the domestic wood consumption in Norway. Changes in the harvest level will affect wood import since there are few barriers to timber and wood product trade in Europe. Thus, possible leakage effects must be considered if implementing policies to change the harvest level in order to mitigate climate change. More research regarding the growth and mortality of old forest, and substitution effects of present and new wood products, is also needed to estimate more correctly the GHG effects of different forest management strategies in Norway. Finally, efforts to change the management of the forest resources to mitigate global warming should be coupled with considerations on factors such as economic development and biodiversity, in addition to short-run versus long-run global warming impacts in order to achieve the desired outcomes.

This report provides an overview of the data used in the two Norwegian forest sector models NorFor and NTMIII. Both models are spatial partial equilibrium models describing the Norwegian forest and bioenergy sectors, including harvest of timber, processing in industry, demand of final products and trade and transport between regions and to/from Norway. Both models have endogenous prices of timber and wood products, but differ in the timber supply side, in the time horizon and the foresight information of agents. NTM has econometrically specified timber supply curves and no option of changing forest management and investment from the predetermined path. In NorFor, simulated growth and yields of all National Forest Inventory plots are included for several future management options. NTM is mostly applied for projections 10 – 20 years into future, while NorFor can currently be applied up to 100 years in future. NTM is a myopic model employing a recursive optimization, assuming that agents do not possess any information about the future beyond the current period. NorFor optimizes for all periods at once, and assumes that agents have perfect foresight. 2008 is base year for both models. Different methods and source are applied to establish the data sets documented in this report. Public statistics from Statistics Norway are used for prices, international trade, harvest and energy consumption. Data from the National Forest Inventory sample plots are used to estimate county‐specific timber supply in NorFor. Elasticities of timber supply (only NTM) and demand for final products (both models) are based on econometric studies. Supply curves for harvest residues are based on available biomass and hauling costs. Plant level data in the pulp, paper and board industry are collected through interviews in the forest industries and annual reports. Input‐output coefficients in bioenergy production are based on other studies and own analyses of data from Statistics Norway and Enova. Costs for expanding district heating systems are based on the heating market model X‐Varme runs. Other parameters are forest management costs (only NorFor), transport costs and GDP growth as a basis for demand growth. Data quality is an important factor in the quality of the results. Several aspects are related to data quality, as representativeness and data uncertainty. Data representativeness indicates how well the analyzed chain or products are represented, as the data often are taken from other geographical areas or adjacent products. Data limitations always exist, and models are simplified representations of the systems. However, consequences of data deficiency vary with the analyses. In general, data regarding production, prices and trade of wood, energy and forest industrial products based on figures from Statistics Norway are of high quality, whereas data of inputs and costs in the industry have weaker empirical basis and thus higher uncertainty.

Økningene i energipriser har sammen med ”kraftmangel” satt fart i debatten om behovet for økt produksjon av energi i Norge. Samtidig har Norge gjennom sin ratifikasjon av Kyotoprotokollen forpliktet seg til å sørge for at de årlige klimagassutslippene i perioden 2008-2012 i gjennomsnitt ikke er mer enn 1 % høyere enn utslippene i 1990. I dette prosjektet har vi basert på data for energibruk, bolig- og befolkningsstruktur i Norge beregnet det tekniske og økonomiske potensialet for bioenergi i Norge og analysert hvordan utviklingen i energiprisene påvirker produksjonen av bioenergi. Effekten av økonomiske virkemidler som investeringstøtte og feed-in på energiprisen, er beregnet under ulike scenarier for utvikling av energiprisene. Det er anvendt en regionalisert partiell likevekstmodell som tar hensyn til transportkostnader, konkurranse om råstoffet fra skogindustrien, samt at økt etterspørsel etter råstoff gir økning i råstoffprisen. Resultatene viser at en fortsatt langsiktig økning i energiprisene gjør det mulig å øke produksjonen av bioenergi fra dagens ca 12 TWh til om lag 20 TWh nyttiggjort energi i Norge innen år 2015. Dette vil tilsvare omlag 14% av det stasjonære energiforbruket dersom energiforbruket fortsetter å øke med dagens takt. Bioenergi vil i første rekke erstatte olje til oppvarming. El-produksjon basert på skogbasert brensel kan på sikt bli aktuelt i Norge, men krever en annen virkemiddelpolitikk enn dagens. En økning i den langsiktige vameprisen fra 0,50 kr til 0,70 kr/kWh + mva gir i modellen en økning i bioenergiproduksjon fra dagens 12 TWh til 20TWh i år 2015. Dette gir 20-30% økning i massevirkeprisene for furu og lauv i år 2015. Bruk av mer hogstavfall bidrar til å dempe presset på tømmerprisene. Økningen i tømmerprisene vil påvirke produksjonen av sponplater og kjemisk masse som får svekket lønnsomhet og en beregnet produksjonsnedgang hhv 12 og 4% i 2015 dersom varmeprisen stiger fra 0,50 til 0,70 kr/kWh. Usikkerhet om utviklingen og svingninger i kraftprisene kan være et hinder for langsiktige investeringer i energisystemer og gjør at økonomiske virkemidler i mange tilfeller er nødvendig for økt bruk av bioenergi. Analysene viser hvordan effekten av økonomiske virkemidler avtar med økende energipriser. Rapporten peker på at de økonomiske virkemidlene knyttet til bioenergi i Norge er relativt begrenset i europeisk sammenheng. Virkemidlene kan også i større grad innrettes slik at de reduserer risikoen ved investeringene ved å garantere en minimum pris for bioenergi. Skal bioenergi utgjøre en viktig del av norsk energiforsyning, trengs en mer offensiv virkemiddelpolitikk, offentlig bevissthet i form av konsesjoner og krav, og mer kompetanse på området.

En rekke internasjonale politiske prosesser har relevans for skogsektoren, og det foreligger et omfattende sett av beslutninger og anbefalinger fra globale og europeiske prosesser som er ment for nasjonal oppfølging. Landbruksdepartementet besluttet høsten 2003 å få utført en kartlegging av de internasjonale anbefalingene og evaluere gjennomføringen i Norge. Oppdraget ble etter anbudsinnhenting tildelt Institutt for naturforvaltning ved Norges landbrukshøgskole. Kartleggingen omfatter Skogprosessen i FN (FNs Skogforum, det mellomstatlige skogforumet og det mellomstatlige skogpanelet), Arbeidsprogrammet for biologisk mangfold i skog under Biodiversitetskonvensjonen og Ministerkonferansene for beskyttelse av Europas skoger. I tråd med prinsippene for nasjonale skogprogram har sentrale aktører vært involvert gjennom hele prosessen. I henhold til oppdragsbeskrivelsen fra Landbruksdepartementet er kartleggingen strukturert i 16 tematiske områder anbefalt i FNs Skogforum. Første del av kartleggingen innebar å systematisere og beskrive internasjonale skogrelaterte beslutninger og anbefalinger som er ment for nasjonal oppfølging. Beslutningene/anbefalingene er her framstilt i forenklet form, men med henvisning til de orginale tekstene. Bistand og internasjonalt samarbeid er viktige elementer i prosessene, og nasjonal oppfølging inkluderer i denne sammenheng norske aktiviteter både i og utenfor Norge. Andre del omfattet å kartlegge iverksatte og planlagte tiltak og aktiviteter i Norge som kan knyttes til de internasjonale beslutningene/anbefalingene fra de internasjonale prosessene. Relevante tiltak ble kartlagt gjennom intervjuer og bruk av skriftlige kilder. Siste del var å identifisere og beskrive områder hvor det er mangler i nasjonal oppfølging, basert på opplysningene fra første og andre del av kartleggingen. Målsettingen har vært en konsistent behandling av innhold i beslutninger/anbefalinger og kartlagte norske tiltak. Vurderingen av norsk oppfølging er gjort separat for nasjonale og internasjonale elementer under hvert tematiske område. De fleste anbefalinger og beslutninger fra de tre skogpolitiske prosessene er vurdert til å være enten ‘fullt implementert’ eller ‘i stor grad implementert’ av Norge, og ingen tematiske områder er vurdert til dårligere enn ‘delvis implementert’. Norsk oppfølging er generelt kommet noe lengre for nasjonale enn internasjonale elementer. Innen nasjonale elementer er to tematiske områder vurdert til å være ‘delvis implementert’. Dette gjelder områdene (i) kriterier og indikatorer for bærekraftig skogforvaltning og (ii) vern av skog og beskyttelse av unike skogtyper og sårbare økosystemer. Innen disse områdene er flere aspekter ved anbefalingene ivaretatt gjennom norske tiltak, men det er også vesentlige aspekter som synes å ikke være ivaretatt. For ‘kriterier og indikatorer’ er det særlig implementeringen av disse i offentlig politikk som synes mangelfull, mens det for ‘vern og beskyttelse’ er særlig representativt vern basert på faglige kriterier som er mangelfullt per dato. Internasjonale elementer består av anbefalinger og beslutninger som dreier seg om bistand, handel og samarbeid i internasjonale organisasjoner. Tematiske områder der status for de internasjonale elementene er vurdert til å være ‘delvis implementert’ omfatter (i) bekjempelse av avskoging og forringelse av skog, (ii) rehabilitering og vernestrategier for land med lavt skogdekke, (iii) rehabilitering og restaurering av forringede arealer og fremme naturlig og plantende skoger, (iv) finansielle ressurser og (v) internasjonalt samarbeid innen kapasitetsbygging, overføring av og tilgang til miljøvennlig teknologier for støtte til bærekraftig skogforvaltning. Felles for disse tematiske områdene er at bistand utgjør et vesentlig aspekt blant de internasjonale elementene i anbefalinger og beslutninger, og at norsk oppfølging er vurdert til å avvike fra internasjonale beslutninger/anbefalinger på grunn av den lave prioriteringen av skog i norsk bistand. Utredningen påpeker områder med avvik mellom internasjonale beslutninger/anbefalinger og norsk oppfølging, uten å gå konkret inn på hvordan oppfølgingen kan forbedres. Kartleggingen vurderer status i forhold til anbefalinger og beslutninger tolket samlet for de tre prosessene. I politikkutforming og annen oppfølging nasjonalt og internasjonalt vil i tillegg andre prioriteringer og prosesser med relevans for skogsektoren måtte tillegges vekt.