Renewable Energy from Forest Residues—How Greenhouse Gas Emission Offsets Can Make Fossil Fuel Substitution More Attractive

Burning forest biomass from renewable sources has been suggested as a viable strategy to help offset greenhouse gas (GHG) emissions in the energy generation sector. Energy facilities can, in principle, be retrofitted to produce a portion of their energy from biomass. However, supply uncertainties affect costs, and are an important impediment to widespread and sustained adoption of this strategy. In this paper, we describe a general approach to assess the cost of offsetting GHG emissions at co-generation facilities by replacing two common fossil fuels, coal and natural gas, with forest harvest residue biomass for heat and electricity production. We apply the approach to a Canadian case study that identifies the price of GHG offsets that could make the use of forest residue biomass feedstock attractive. Biomass supply costs were based on a geographical assessment of industrial harvest operations in Canadian forests, biomass extraction and transportation costs, and included representation of basic ecological sustainability and technical accessibility constraints. Sensitivity analyses suggest that biomass extraction costs have the largest impact on the costs of GHG emission offsets, followed by fossil fuel prices. In the context of other evaluations of mitigation strategies in the energy generation sector, such as afforestation or industrial carbon capture, this analysis suggests that the substitution of fossil fuels by forest residue biomass could be a viable and reasonably substantive short-term alternative under appropriate GHG emission pricing schemes