BioFuels Threaten Wood Fiber Supply for Mulch Producers

By: Michael Chase, Corporate Counsel, ChromaScape, Inc.

We all are aware that wood fiber supplies are in lesser supply than in years past, due to a number of factors. The economic downturn, the lack of land clearing operations, and the demand for renewable energies have all eaten into the supply of fiber. An economic recovery should have a positive effect on the first two for mulch producers, but the demand for biofuels will remain a threat for years to come. One of the speakers at the Mulch and Soil Council’s annual meeting last October, Pete Stewart, the CEO of Forest2Market located in Charlotte, NC, gave some statistics regarding the push towards renewable energies and how it will affect the wood fiber supply.

Stewart pointed out that throughout the world, more and more demand for renewable fuels, such as wood pellets, is increasing the demand for wood fiber. He noted that the United Kingdom is targeting a rate of 20% of its fuel needs coming from renewable supplies by the year 2020. In order to reach this goal, it will need to import around 12 million tons of fuel pellets, at least a third of which will likely be imported from the United States. He also argues that, depending on the amount of fuel that is required to come from renewable sources in legislation pending in front of Congress today, demand for pellet fuel in the US may double in the next decade. The demand is expected to be around 60 million tons in 2012, but may reach a level of over 120 million tons by the year 2018. How will this doubling of wood fiber for fuel pellets be accomplished, and what will it do to fiber prices?

Stewart also notes that the current forestry management administrations do not seem to favor growing dedicated timber crops for only biofuel uses because it is expensive, time consuming, and is not guaranteed to be profitable. Better use of some of the green fiber currently discarded in many forestry processes will assist in closing this gap somewhat, but the bulk of the projected demanded wood will have to come from somewhere.