EU's Renewable Push Bolstering Increased US Logging Operations

A revealing piece was published last week in the Wall Street Journal documenting an uptick in clear cutting and logging activity in the US tied directly and indirectly to meeting the European Commission's greenhouse gas reduction requirement and 20 percent renewable energy mandate.

The surge in logging activity, especially in the southeastern US, has been pronounced since the adoption by the European Commission's carbon reduction and renewable energy standards in 2007. Under the rules, countries must reduce their greenhouse gas emissions to 1990 levels by the year 2020. In order to meet that standard, the Commission created an Emissions Trading Scheme (a cap and trade program) to reduce carbon dioxide and other greenhouse gas emissions as well as establishing a 20 percent renewable energy mandate that must be met by 2020. Ramping up large-scale solar and wind projects have proven costly and time-consuming, and in order to help meet the ambitious timeline, many EU power providers have turned to biomass to help meet the requirements of the mandate. The rub, however, is that most of Europe's forests have long since been logged and many EU nations have very strict limitations on clear cutting and harvesting trees in general. Increasingly, European power providers have turned to US forests in the South to help address this biomass shortage. Since 2007, the amount of pulp wood that has been processed into wood pellets used for power plants has grown from 0 to 1.72 million tons per year based on 2012 data from Wood Resources International. 

The Emissions Trading Scheme, or ETS, devised a system that awards credits to private companies to generate renewable electricity which can then be sold to utilities and electricity providers. Biomass generated from harvesting wood and trees counts as renewable power under the regulatory program and its backers note that replanting younger trees absorbs more carbon from the atmosphere and is a more preferable alternative to running coal plants which also emit other air pollutants. One power company in the UK, Drax PLC, recently announced its intention to convert more of its coal fleet to wood and setting up additional pellet mills in the US which has provided a source of economic stimulus for the pulp wood processing industry.

The practice of harvesting trees from American hardwood forests has drawn criticisms from environmental groups who believe it allows companies to avoid the EU's conservation rules as well potentially harming biodiversity in the developing world, and damages wetlands in the US. Further, they contend that harvesting a mature tree releases nearly all the carbon dioxide it "sequestered" instantaneously when it's burned compared to the slower absorption process for saplings.