Where is the money?

The intensified focus on bio-based economy has revived the interest in forest industry as a very important factor in the achievement of the transition away from an economy based in fossil raw materials. But is it economically viable and justified to produce transportation fuel from forest feedstock?

The recently published f3 report Where is the money? – Value flows in the present Swedish forest-based sector gives an overall view of the economic values related to the main physical biomass flows through the Swedish forest industry. In the report, researchers Jonas Joelsson, SP Processum, and Dimitris Athanassiadis, Swedish University of Agricultural Sciences, also discuss the implication for these value flows at the introduction of large-scale transportation fuel production from forest biomass. Their study aims at providing a better understanding for the bioeconomy structure, the values added within it and the options for renewable motor fuel production, by applying a “follow-the-money”-approach.

According to the study, forest-based motor fuel faces a number of challenges. The feedstock cost is relatively high, partly as a result of competition from other industries (sawmills, pulp mills, heat and power plants) and partly as a result of slow-growing wood and high processing and transportation costs. The processes for conversion of wood into motor fuel are, hitherto, relatively complex and expensive, compared to, for example, the processes for converting sugar, starch and oil crops into motor fuel. The feedstock basis is large, but there seems to be some development remaining for the processes to run efficiently and reliably on more difficult feedstock, such as logging residues and bark. Finally, petroleum-based fuels remain cheap, relative to the present production costs of forest-based fuels.

Hence, motor fuel production from forest resources appears more likely to emerge as a by-product to other products, which make better use of the unique properties of boreal forest, according to the f3 report.

Read the report Where is the money? – Value flows in the present Swedish forest-based sector