RED III greenhouse gas balance methodology: an important element of the IPCC rules is missing

When trees are harvested, this reduces the CO₂ sink capacity of the forest area concerned. In other words, less carbon is bound. If this fact is taken into account in the greenhouse gas (GHG) balance of wood harvested from forests and used to produce energy, such wood does not deliver any GHG reduction compared to fossil fuels.

The methodology for GHG balances in the Renewable Energy Directive RED II and in the proposal for amendment of RED III has a major gap in this regard. This generates false incentives for forest wood energy. Instead, the GHG balance of forest wood energy in RED III should apply the carbon content of wood as an approximation of changes in the sink capacity of forests. That value can be determined easily and is reliable. This blog piece explains the technicalities.

One of the key challenges now and in future is to reduce GHG emissions. Forests play a major role in this context. This has two aspects: For one thing, forests sequester carbon from the atmosphere. For another, wood can be used as a material for construction or fuel to substitute fossil products. However, it is clear that harvested wood reduces the forest’s sink capacity. The two aspects of climate change mitigation thus run counter to each other. When considering the use of forest timber for energy production the following question arises: is such use of forest timber carbon-neutral if the reduced sink function of forests is taken into account in the GHG balance?

Wood harvest = CO₂ release under the IPCC methodology

In a given forest area, carbon is stored in a number of different pools: in trees, in the soil, in dead wood and in litter. Storage in trees, in particular, depends greatly upon management intensity. In greenhouse gas reporting under IPCC rules, changes in the carbon stock of forest areas are inventoried for a country and reported in the LULUCF sector (land use, land-use change and forestry). If the carbon stock in a pool increases, one speaks of a sink or a positive sink capacity. If it decreases, one speaks of a source or negative sink capacity.

When wood is extracted from the forest, this is a CO₂ release in the LULUCF sector under the IPCC methodology. It follows that, in order to avoid double counting in the overall balance for the country, subsequent uses of the wood, such as for firewood, do not need to include the carbon released through combustion in the balance under this methodology.

From this circumstance, two approaches to GHG accounting have emerged:

• Approach 1: The combustion of wood is carbon-neutral. Effects upon the carbon pool of a forest area can be ignored in the GHG balance as long as not more wood is removed than regrows and the carbon pool in trees remains constant. This is the assumption widely made in GHG balances of timber products. It is also the approach taken by the RED III methodology.

• Approach 2: The carbon stored in the wood must be taken into account in the GHG balance because harvesting wood from a forest area means carbon loss. In Germany, for example, about 1 tonne CO₂ per cubic metre are stored in the wood of beech, oak and long-lived deciduous tree species, and about 0,7 t CO₂/m³ in coniferous trees and short-lived deciduous tree species. These amounts must be treated as GHG emissions upon timber harvest. This is an approach adopted by various authors in recent years (Norton et al. 2019, Letter from Scientists).

One argument against the first approach is that changes in the carbon pool of a forest area that are attributable to forest management are entirely ignored.

The second approach takes account of the direct effect of wood removal but ignores dynamics in forest development that can result from differences in the growth of tree species and their age classes.

To better determine which of the two approaches is justified, Soimakallio et al. (2022) have evaluated numerous forest modelling studies in a review study. The benefit: The forest models capture the complex forest dynamics of diverse increments of different tree species and age classes up to the effects of forest management activities. In its review study, the research group always identified scenario pairs: one with more intensive forest management and one with less intensive forest management. As indicator, the difference in the carbon storage capacity of forests is placed in relation to the difference in wood removal (see Figure 1). The carbon storage balance calculated in this manner reveals how strongly the sink capacity of forests changes depending upon the amount of wood harvested. It can be converted into various units, e.g.:

• Tonnes CO₂ per cubic metre wood harvested (t CO₂/m³),

• Grammes CO₂-equivalent per Megajoule (g CO₂-eq./MJ) or

• Tonnes carbon in forest sink per tonnes carbon in wood harvested (t C_{Forest sink} / t C_{Wood harvested}).

  Please note that “carbon storage balance” in Fehrenbach et al. (2022) and “carbon balance indicator” in Soimakallio et al. (2022) are synonymous terms.

The following figure is based on the WEHAM baseline scenario, which extrapolates forest development in Germany under the prevailing silvicultural rules, and the WEHAM wood preference scenario, which intensifies forest management compared to the WEHAM Baseline Scenario and fells more timber.

For boreal and temperate forests a mean carbon storage balance of 1.2 t CO₂/m³ (standard deviation ±0.7 t CO₂/m³; all periods calculated) was found for 154 scenario pairs in 45 international simulation studies (Soimakallio et al. 2022, Figure 2). The findings are marked by a wide range.

Conclusion 1: Approach 2 is suitable

Overall, the scenario review reveals a substantial effect of wood removal upon the sink capacity of forests. This continues to apply if the dynamics of the forest ecosystem are taken into account. As the carbon storage balance value is in the order of the carbon quantity stored in the wood, it is justified to integrate the latter as an estimate of forest management emissions in the GHG balance of timber products. The other approach, in contrast, is not suitable.

Sample of a greenhouse gas balance using approach 2

A comprehensive GHG balance should be guided in principle by DIN EN ISO 14067:2018 (Carbon footprint of products) while also observing the IPCC principles. It should therefore include the following elements:

1. All GHG emissions along the production chain

2. Impacts of wood harvest on CO₂ sink capacity of forests (carbon storage balance)

3. Carbon storage in wood products

4. As a fourth element, the GHG balance of a wood product should be compared to that of alternative products that would be used instead of the wood product (substitution effects).

Please note: Substitution effects are not an integral part of the GHG balance of a wood product. The alternative products must be defined and substantiated, and separate GHG balances produced for them. They serve purely comparative purposes and must therefore be presented separately.

To make the balance transparent, all four elements should be presented separately. A comparison of the sum of elements 1 to 3 with element 4 (substitution) will generally underpin the statement on GHG reduction: “Product x saves y% GHGs”.

Figure 3 presents this for the example of a GHG balance of woodchips in Germany. Even with a low carbon storage balance of 0.62 t CO₂/m³ (cf. Figure ), energy from wood harvested in forests delivers no GHG mitigation compared to fossil fuels (-13%). If a higher carbon storage balance in the order of the mean in Figure 2 is assumed, GHG emissions are twice those of the fossil reference (-101%).

For comparison: The annex to RED II states that if trunk wood from forests is used as woodchips for energy, the default value for the GHG reduction is taken to be more than 80% (for a transportation distance up to 2,500 km; carbon storage balance, or carbon content, in wood not taken into account). This default value provides compliance with the 80% limit value for GHG reduction. If, however, the impact of wood removal upon the storage capacity of the forest area is taken into account, this would no longer be the case.

Recommendations for the refinement of RED III and for forest management

The example of the GHG balance of woodchips made of harvested stemwood shows impressively that harvested wood energy delivers no GHG mitigation effect. This applies equally to firewood and pellets (Fehrenbach et al. 2022).

It is essential that RED III is amended such that GHG balances take account of the amount of carbon (C) in harvested wood used as fuel. A further option would be to class as unsustainable the direct use of stemwood as fuel (billets, woodchips, pellets). This would prevent mismatch arising between the goals designed to boost sink capacity in the LULUCF sector in the LULUCF Regulation and the goals established in RED III.

Conclusion 2: These recommendations follow for forest management (Fehrenbach et al. 2022):

• In climate-resilient forest stands with high ecological integrity (e.g., mainly deciduous and mixed forests in Germany) where mainly low-quality and short-lived wood products are expected, harvesting should be reduced to build up forest carbon stock.

• In forest stands with poor climate resilience and low ecological integrity (e.g., spruce forests in unsuitable locations in Germany), harvesting should continue with the long-term goal of conversion into climate-resilient forests.

• In forests where wood output is primarily used for long-lived products such as construction timber and furniture, carbon stock accumulation through reduced harvesting will presumably not reduce overall GHG emissions.

• Synergies and trade-offs with other ecosystem services such as biodiversity, soil and water should be factored into decision-making.

Dr Klaus Hennenberg is a Senior Researcher in the Energy & Climate Division in the Oeko-Institut’s Darmstadt office. His work focuses on biomass modelling and statistical analysis techniques. Dr Hannes Böttcher and Judith Reise at the Oeko-Institut and Silvana Bürck and Horst Fehrenbach at ifeu co-authored this blog piece.

Further information

Blog piece by Dr Sibylle Braungardt: Biomass for heating in the context of the fit-for-55 package: How to ensure sustainability?

Blog piece by Dr Klaus Hennenberg: Erosion of European sustainability requirements for bioenergy