Carbon savings with transatlantic trade in pellets: accounting for market-driven effects

Exports of pellets from the United States(US) are growing significantly to meet the demand for renewable energy in the European Union. This transatlantic trade in pellets has raised questions about the greenhouse gas(GHG)intensity of these pellets and their effects on conventional forest product markets in the US. This paper examines the GHG intensity of pellets exported from the US using either forest biomass only or forest and agricultural biomass combined. We develop an integrated dynamic, price-endogenous, partial equilibrium model of the forestry, agricultural, and transportation sectors in the US to investigate not only the direct life-cycle GHG intensity of pellets but also the accompanying indirect market and land use effects induced by changes in prices of forest and agricultural products over the 2007–2032 period.

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