Substitution and carbon storage impacts of harvested wood products - Effects of increased cascading with different market responses


 BackgroundThe climate impacts of wood-based products can be measured by substitution impacts and changes in product carbon stocks. Cascade use of wood aims to increase resource efficiency and minimize the impact on the environment and climate, but it may lead to changes in the product portfolios of industries. Thus, measuring the overall impact is challenging. This study analyses the impact of wood cascading on the climate under varying market responses. Cascade use here refers to discarded sawnwood product utilisation in panel and wood-based composite production. The study utilises explorative scenarios where Finnish wood-based flows are modelled in an Excel-based material flow model, and discarded sawnwood flows are shifted from energy use to material use in the end-of-life stage. The Reference case represents the situation where discarded wood-based products are only used for energy. The scenarios portray plausible market responses to cascading, with cascade production either leading to additional wood-based panel and composite production, or substituting primary sawnwood products thus leading to lower overall harvest levels. ResultsThe results show that the cascading can result in 1.6%-5.4% more avoided C emissions compared to reference when considering the substitution impacts, the carbon stock changes in wood products, and the avoided carbon loss from roundwood harvest. Besides the market response, the results vary depending on the time-period selected for the estimation of the average annual carbon stock change of wood products and the emission profile of non-wood products. ConclusionsThe results of this study indicate that cascading can contribute to climate change mitigation regardless of the market response, but it depends on the market response whether the reduction potential origins from wood-based products or indirect changes in the harvest levels. There are less avoided C emission gains in the technosystem, if cascading production substitutes primary production and therefore reduces the wood harvest. However, the opposite holds, if the average substitution impacts are significantly reduced in the future due to decarbonization of non-wood sectors. Thus, in the long-term, extending the carbon residence in the technosystem or in the ecosystem may provide a larger climate change mitigation potential than increasing the substitution impacts. Keywords: carbon stock change, cascading, forest industries, greenhouse gas emissions, harvested wood products, substitution, substitution impact


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In the EU, industrial wood residues present a greater volume potential for cascade use, com-28 pared to waste wood [10]. However, discarded products can also offer an additional source for 29 material cascading and create additional climate, social and economic benefits [11]. General-30 ly, the cascade use of wood has been recognised as a strategy that contributes to an efficient 31 development of the bioeconomy and to mitigating climate change [12]. However, many chal-32 lenges in the calculations of cascading benefits for wood-based products, and the trade-offs 33 between cascading and substitution benefits of energy use of wood, have recently been recog-34 nised [12,13]. Previously, greater importance was placed on substituting energy than increas-35 ing the cascade use of wood [14]. The potential of the optimised cascade use of wood can also 36 be less favourable in terms of GHG emissions reduction in the energy sector, especially on 37 meeting renewable energy targets in the EU [12]. Earlier studies suggested that the material 38 cascading impacts of wood on GHG environmental sustainability can be relatively small, in 39 relation to low cascading volumes [13,15,16]. Recently, Budzinski et al. (2020) [17] estimat-40 8 up in long-lifetime uses, it is safer to assume a high reduction of volume during the lifetime. 159 In Europe, for example, the half-life for sawnwood products is generally 35 years [31]. The 160 end-of-life stage assumptions are the same for the reference and cascading scenarios, with the 161 difference being that in the cascading scenarios discarded sawnwood products are used as raw 162 material for panel production (80%) and wood-based composites (15%), and only 5% is used 163 for energy (Table 1), whereas in the reference all the discarded wood products are utilised for 164 energy. 165 166 Some additional assumptions were made for the 'from raw material to end-product' gains 167 regarding cascading. The original production efficiencies based on roundwood processing do 168 not conform directly with cascading production because, e.g., debarking is not needed. In-169 stead, we assume a material input-output ratio of 50% for cascaded products. The total mate-170 rial cascading potential in the scenarios varies from around 0.7 Mt C to 0.5 Mt C, and the 171 same amount is directed away from energetic use in the cascading loop 1 in the Reference 172 case (see Table 1 The analysis was conducted for a total of four cascading scenarios. The market responses to 178 cascading were studied through two types of scenarios: one scenario in which cascading in-179 creases the overall wood product production volume through additional production of panels 180 and composites (CASPlus), and three scenarios in which the additional cascade production 181 substitutes for primary sawnwood products at the market level and thereby reduces the pro-182 duction volume of primary sawnwood by 5% (CASred05), 10% (CASred10) or 20% 183 (CASred20) in Finland. In the latter scenarios (CASred-), the harvest levels also decrease by 184 an equivalent amount, since fewer sawlogs are required. There is an indirect consequence in 185 the CASred -scenarios: the volume of side streams from sawmilling also decreases, which has 186 a further decreasing impact on side stream-utilising production groups as well. The produc-187 tion volumes and their changes between the reference and cascading scenarios are presented 188 in Figure 1  [28], assuming that there would be less emissions to be replaced in the non-wood sectors to-233 wards 2050 as a result of complying with the Paris agreement targets. This leads to reduced 234 substitution impacts on average, as the currently more energy-intensive processes can reduce 235 their emissions more relative to wood-based products. 236

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The production structure weighted avg DF represents the average substitution impact that one 238 unit of Finnish wood-based production results in under a certain production structure (see eq. 239 12 cading substitution results in extra benefits without additional harvesting, i.e., the wood con-241 tained in the initial product is assumed to substitute for a non-wood product twice on the mar-242 ket level. 243

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The DF for a wood-based product group (e.g. sawnwood-based products), DFproduct group, is 245 given as: where DFHWP is the production structure (volumes of harvested wood products) weighted av-258 erage DF, v represents the volume in the wood product group pg, and initial_volume is the 259 total volume of produced wood products based on initial wood flow. 260 261 Finally, the total substitution, DFtot is calculated by multiplying the total volume of produced 262 wood products (i.e., initial volume) with the production structure-weighted avg DF (eq4). where i is year, Ci carbon content (total stock) in the specific product group, k the decay con-286 stant for each product group category (k = ln(2)/half-life (see Table 2)), and Inflowi is the 287 total carbon inflow to the specific product group annually. where ∆Ci is the total carbon stock change in year i. The annual net C stocking forms a para-294 bolic curve, as the stock calculation is set to start from zero, meaning that historical C stocks 295 are disregarded in the analysis. This is because they would not have had an impact on relative 296 differences between the scenarios and Reference, which allowed us to isolate the material 297 cascading impacts, ceteris paribus. The C stock development in these theoretical scenarios 298 follow an exponential trend until they reach the saturation point. In that setting, the differ-299 ences increase between scenarios and Reference (no cascading) towards saturation point. 300 Therefore, we standardised the C stock changes to be more informative by using an average 301 from the estimation period (years 1-10, 1-30, 1-50, and 1-100). 302

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The half-life assumptions for product groups are based on IPCC (2006) [30], with the excep-304 tion of composites, which is assumed to have the same half-life as panels ( Table 2). The main 305 difference between cascading scenarios and Reference is that there is an extra product group 306 in inflows for sawmilling products that will continue to material cascading practices at the 307 end-of-life stage (as panels and composites). This flow, which eventually enters cascading 308 practices, is excluded from the original sawmilling inflow. Its half-life is assumed to be twice 309 as long as virgin sawnwood (70 years where Cres is the carbon residence in years, Ci+1 total carbon stock in harvested wood-based 321 products in year i+1 (+1 stays for the next year's storage), and Outflow the total Carbon out-322 flow released from harvested wood-based products to the atmosphere in year i. Because the C 323 stock development in this study setting follows an exponential increase trend until the satura-324 tion point, the relative differences between scenarios in Carbon residence also increase over 325 time towards saturation point. Thus, we used average C stock and average outflow from a 326 longer estimation period of 100 years instead of specific year selection to calculate the C resi-327 dence. 328 329 2.5 Impacts of increased cascading on the avoided carbon loss from roundwood harvest 330 331 In some of the cascading scenarios (CASred), the demand for harvested roundwood is de-332 creased due to cascading impacts. To assess the carbon emission reduction, i.e., climate 333 change mitigation potential in the form of negative emissions, of different wood utilisation 334 patterns, it is necessary to simultaneously account for both the technosystem and ecosystem 335 GHG flows [3]. We additionally consider the avoided carbon loss from roundwood harvest due to increased cascading of wood-based products, based on the carbon content of harvested 337 roundwood. More detailed assessment of forest ecosystem carbon sink dynamics is out of the 338 scope of this study. The avoided carbon loss from roundwood harvest is calculated as a mate-339 rial flow difference (t of C) in the cascading scenarios compared to the reference.

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The production structure-weighted C residence and DF values represent the middle results of 364 this study, yet give a general overview of the average climate performance across scenarios 365 (Table 3). CASplus had the highest performance in C residence (9.7 years) and production 366 volume-weighted DFs (0.54 tC / tC and 0.25 tC / tC) (Table 3). Although CASred05 and 367 CASred10 resulted in longer C residence (9.45 and 9.18 years) compared to Reference (9.04 368 years), CASred20 reduced the residence to 8.63 years due to total lower C stock in the tech-369 nosystem (in harvested wood-based products). The total harvested carbon is lower in the 370 CASred scenarios, because the raw material input is lowered by 5-20% for final products.  Table 4 shows the cascading impact on annual substitution and the annual average C stock 384 change across selected calculation periods. All cascading scenarios, except CASred20, in 385 which cascading production led to a 20% decrease in sawmilling product volumes, resulted in 386 higher annual substitution compared to Reference (Table 4)   occur, thus harvested wood-based products may offer steadier carbon storage. On the other 508 hand, long-term carbon storage in harvested wood products is not guaranteed either, as it de-509 pends on markets, which may change rapidly. Jarre et al. (2020) [35] have identified political 510 incentives/barriers and market mechanisms as two of the most crucial factors that impact the 511 realisation of wood cascading. Market regulation and supportive incentives for long-lifetime 512 products and cascading practices ensuring efficient material use before energy use could im-513 prove the stability of carbon benefits in the technosystem. 514 515 In most comparisons, the Reference scenario resulted in more avoided C emissions through 516 carbon stock change than the cascading scenarios (CASred) in which cascading production 517 was assumed to substitute for primary solid wood products. It is obvious that fewer benefits 518 are gained through wood utilisation in cases where are fewer wood-based products causing 519 them overall. However, in the CASred05 scenario, the cascading decreased sawnwood pro-520 duction volumes only 5%, thus still resulting in 2.1%-3.6% more avoided C emissions than 521 the Reference over all calculation periods and DF assumptions. The respective impact on 522 avoided C emissions compared to the reference was from -6.5% to 0% for CASred10, and -523 13.7% to -7.0% for CASred20. The negative change implies less avoided C emissions gained 524 than in the Reference. This was expected, since the higher reduction of sawnwood production 525 volumes affected the production volumes of other products significantly as well, through 526 sawmilling side stream utilisation. In addition, when sawnwood production volumes de-527 creased, there was less potential material for cascading in the end-of-life stage. Thus, cascad-528 ing use of a wood product as a substitute for a traditional wood product at market-level may 529 lead to a counter effect in cascading potential at the production level. 530

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The CASplus scenario, where cascading production increased the total production of forest-532 based industries and did not affect primary production, resulted in 0.8% -9.5% (0.13-0.51 Mt 533 pared to the Reference scenario. Budzinski et al. (2020) [17], found similarly that the emis-535 sion reduction potential for material cascading in terms of lifetime extension of German wood 536 products was approximately 0.04% (0. 35  this study to other results is not directly feasible due to e.g. scenario differences, cascading 546 volume assumptions, varying calculation methods and half-life assumptions. However, the 547 results indicate that, in general, the lifetime extension of a product due to cascading can con-548 tribute to greater avoided biogenic C emissions through carbon stock change, when it does not 549 substitute for other primary wood products, but the potential might remain modest depending 550 on the cascading volumes and product-specific lifetimes. 551 552 CASplus scenario resulted in 8.4% (2.04 Mt CO2) more avoided C emissions in terms of total 553 annual substitution, compared to Reference. This was expected since the cascade use created 554 additional substitution benefits without any additional wood harvest. On the contrary, when 555 cascading led to decreased production volumes of sawnwood products through market substi-556 tution in the CASred scenarios, the results varied from +4.9% (1.09 MtCO 2 eq./a) to -5.3% (-tors, the carbon stock change in wood-based products could play a larger role in climate 561 change mitigation than substitution, at least in cases where cascade use could substitute for 562 primary wood products at the market level. 563 564 There are some limitations in this study setting, since the scenarios are theoretical and based 565 on simplified assumptions to isolate the impacts of cascading and exclude volume-or other 566 production structure-related impacts. Therefore, it should be noted that the results cannot be 567 interpreted as an assessment of the current situation, but rather as the relative magnitude of 568 cascading impact compared to the case where material cascading does not occur. Another 569 limitation is that cascading production was not assumed to consume extra energy in produc-570 tion, nor possible indirect impacts in lifetimes e.g. due to possible additional maintenance. In 571 reality, these indirect impacts may hinder the positive impacts of assumed lifetime extension 572 in cascading practices [13,17]. Additional energy demand in the cascading production could 573 have decreased the substitution benefits in cascading scenarios. However, as the total energy 574 needed in the cascading practices depends greatly on transportation distances and waste man-575 agement technologies, quantifying that demand would require more detailed analysis and as-576 sumptions regarding future development. Importantly, this study did not quantify the indirect 577 impact of changing harvest levels on the forest ecosystem carbon sinks. Including the forest 578 ecosystem sink impact would have made the relative changes between scenarios greater, but 579 not affected the rank order of the assessed scenarios. 580 581 One central aim of the paper was to model the net C impacts of cascading in light of two op-582 posite market responses. Current models and data remain limited in their ability to address the 583 issue of substitution, particularly in the context of new wood-based products, which is why 584 which of the two market responses would prevail remains a matter of speculation. This repre-sents a significant knowledge gap not only for assessing the various market responses within 586 the sector, but also for assessing the substitution impacts of wood use in general. 587 588 5. CONCLUSIONS 589 590 The study found that the impact of increased cascading on the avoided carbon emissions of 591 the forest sector are sensitive to the assumptions regarding average substitution impacts and 592 the market responses to increased cascading. However, the overall impact of cascading on the 593 climate change mitigation potential of wood use would appear to remain modest, although 594 non-trivial. 595

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The results suggest that material cascading can result in 1.6%-5.4% more avoided C emis-597 sions compared to the energy recovery of discarded wood products, when considering substi-598 tution impacts, the carbon stock changes in wood products, and avoided carbon loss from 599 roundwood harvest. The ranking of different cascading scenarios depends on the time period 600 selected for the annual average calculation of the carbon stock change and DFs used (current 601 vs 2050 estimates). Without considering the avoided harvest of primary wood, the impact of 602 increased cascading is the smallest in cases in which cascaded products substitute for primary 603 wood products. The potential to avoid carbon emissions is higher in the short term if the ma-604 terial cascading does not decrease the harvest levels but increases the total amount of wood-605 based products in the technosystem. However, the opposite holds if the average substitution 606 impacts decrease significantly in the future. These findings could change if cascade use leads 607 to increased market uptake of lower DF-or short-lifetime products or heavily substitute for 608 long-lifetime products that are also a source for later material cascading. However, e.g. necessarily neutralise the climate benefits, and lifetimes should decrease for all considered 611 products by at least 60% to have an opposite effect. 612

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In light of these results, in the long term a more promising mitigation strategy than substitu-614 tion could be to extend carbon residence in the technosystem, and cascading offers one means 615 to this end. Possible solutions could combine market incentives to promote long-lifetime 616 products and lifetime extension.