Virginia's Woody Biomass Market: Opportunities and Implications

Abstract

Abstract Recent interest in producing energy from woody biomass has raised questions about the coexistence of wood-to-energy markets and the traditional forest products industry in Virginia. This study examined recent trends in the forest products industry and the wood-to-energy market, as well as the potential for competition between the two industries. Results indicate that the forest products industry has struggled recently, whereas wood-to-energy markets have expanded. Current opinion varies as to whether or not the wood-to-energy market will negatively affect the forest products industry. At present, 75% of Virginia's pulpmills are located within 50 miles of a wood-to-energy facility, and all pulpmills are within 75 miles. Recent trends in pulpwood prices, fuel chip prices, and Virginia law indicate that competition for raw material is unlikely in the short term. However, this research indicates that in the longer term, depending on government policies and technological progress in conversion technologies, competition between forest industry and wood-to-energy companies is possible.