The Optimum Wood Procurement Scenario and Its Dynamic Management for Integrated Energy and Material Production in Carbon-Neutral Forest Industry

Abstract

The digitalization of the forest sector, the increased demand of energy-wood, as well as faster market changes have increased the number of challenges for wood procurement of the forest industry. The aim of the study is to optimize wood procurement (upstream of supply chain) of energy and material production in integrated situations, and to consider the effects of production changes on the management of procurement regions. Three scenarios described integrated production situations in a carbon-neutral forest industry: (1) declining export, (2) energy reform, and (3) extensive energy reform. Time-varying capital-, cost-, and energy efficiency of the dynamic wood-flow model affected the competitiveness of the procurement regions. As a novel contribution, energy efficiency was modeled using the price of emission allowance as a cost parameter. The results show the positive effects of the energy reforms, which partly compensate for the declining exports. In addition, it is possible to change wood procurement in the regions in a market-oriented way. Decision makers should optimize purchases, inventories, and procurement resources as business processes, which are also considered success factors for the forest industry in integrated production situations. The strategic solution of extensive energy reform provides a potential approach for carbon-neutral customer-oriented supply chains, but it needs tactical energy efficiency analysis in future studies of sustainability, if the ultimate goal is to implement a carbon-free forest industry and bioeconomy.