What Are the Alternatives for Unused Forest Biomass Facing Industrial Collapse?

There is a growing trend, centered in Europe, to actively respond to the climate crisis era by utilizing sustainable forest bioenergy. A representative forest biomass fuel is wood pellets. In fact, when examining the LEDS (Long-term Low Emission Development Strategies) submitted by various countries to the United Nations Framework Convention on Climate Change, most have set the activation of forest bioenergy as a key strategy in the forestry sector.

The U.S. Department of Agriculture forecasted a stable upward trend as wood pellet consumption in the European region surpassed 30 million tons last year. South Korea is no exception. The total wood pellet consumption market, which was 1.52 million tons in 2015, grew about twofold to 3.25 million tons by 2020.

However, the low economic feasibility of domestically produced pellets and the import dependency rate reaching 90% remain issues. South Korea ranks third in the world in pellet imports. Criticism from various sectors, including the National Assembly, continues. To overcome this, the Korea Forest Service and related ministries implemented the ‘Unused Forest Biomass’ policy in 2018. This policy converts branches and other forest residues, which are left unused and emit greenhouse gases, into wood pellets for energy use. The ultimate goal is to replace fossil fuel use and reduce carbon emissions. Since it utilizes forest products that are abandoned or left unattended rather than felled trees, it can be considered genuine domestic renewable energy.

It also has effects such as job creation, revitalization of the local economy, and prevention of forest disasters, thereby enhancing public safety. The localization of wood pellets contributes to energy security. There is no doubt that it is a carbon-neutral resource.

What deserves attention is forest fires. Forest fires have escalated to the level of national disasters. Over the past decade, more than 4,700 forest fires have occurred, resulting in 134 casualties. It is analyzed that unused forest biomass such as accumulated branches and fallen leaves within forests acts as a catalyst for forest fires, with an estimated annual volume of about 4 million tons. Actively and substantially collecting these materials to remove fire hazards in advance is important. Considering technological conditions, the collected byproducts are estimated to be able to replace about 2 million tons of imported pellets.

Thanks to these efforts, the market share of domestically produced pellets made from unused forest biomass has risen to about 10%, and production capacity has grown about threefold to approximately 900,000 tons compared to three years ago. From the perspective of responding to the climate crisis, the industry expects to have a production capacity of 1.6 million tons by 2025 based on active private investment.

However, despite being a nationally justified policy, the industry is reportedly facing a collapse crisis just three years after implementation due to falling REC prices and various external factors. The actual demand for domestic pellets by power generation public enterprises has also decreased by half.

An informed expert stated in an interview, “In the era of climate change, forest policy needs to be consistently promoted reflecting international trends. In particular, forest biomass is the only renewable energy source whose entire process from production to power generation occurs domestically. It is clear that we need to activate our industry by securing price competitiveness against imports through REC adjustments and other measures.”

The industry, including the Korea Forest Biomass Energy Association, said, “Due to the difficult situation, unnecessary survival competition among domestic companies and the risk of massive unemployment have emerged. The bankruptcy of the entire related industry, the first among renewable energy sources, will be recorded in the history of South Korea’s carbon neutrality. Ultimately, the vacant space will be filled again by imported pellets, and a balanced power mix will become unattainable.”

Furthermore, they added, “If the REC weighting is not adjusted immediately, the estimated damage to manufacturing facilities alone will be about 552 billion KRW. There are more than 200 raw material suppliers, most of which are small businesses. Considering the damage to manufacturing facilities under construction, logistics, and other indirect industries, at least 600 companies will collapse, and the damage is expected to exceed 1 trillion KRW. Policy consideration is urgently needed.”