Executive Director
NHLA
The Southern United States has long been a hub for wood-based biofuel, biomass export, pulp, and paper production. Hardwood mills play a significant role in the region’s rural economy and are one of the primary feedstocks for these applications. However, recent years have seen a troubling trend of biomass export terminals and paper plants shutting down, leaving Hardwood mills grappling with the inability to move their residuals and maximize their utilization.
Hardwood mills, which generate significant quantities of wood residues such as sawdust, bark, pulpwood, and wood chips, rely on these plants for processing their byproducts, which are traditionally burned to create steam used to heat kilns, sold to biomass plants for energy generation, or sold to paper plants for pulp production. Many reasons cause the closure of these facilities, though the most significant factors are economic challenges and regulatory hurdles. Green subsidies are not consistently applied. Export terminals that have been large purchasers of bulk shipments to Europe have gone bankrupt. Paper production has shifted overseas due to lower production costs and changes in consumer demand.
Consequently, Hardwood mills are left with surplus byproducts and limited avenues for disposal, leading to increased operational costs and decreased profitability. The results of lost residual markets also impact the ability to source saw logs, as the logger has no contract for the smaller pulp logs in the same forest stand. This has shifted the Hardwood industry’s focus to local power generation.
There are several challenges preventing Hardwood sawmills electricity generation:
First, the volumes of Hardwood mills are significantly smaller than softwood and would require bringing in additional biomass to ensure a consistent supply and achieve a large enough economy of scale to be profitable.
Second, the electrical generation market is heavily regulated and very restricted from a utility purchase and environmental emissions perspective.
Third, high capital costs pose significant challenges to Hardwood mills seeking to implement their own biomass power generation systems.
Thus, despite the potential for wood biomass to serve as a renewable fuel source, Hardwood mills cannot overcome the numerous obstacles in harnessing this resource for power generation.
Addressing the crisis of underutilized biomass in rural communities requires a concerted effort from policymakers and industry stakeholders. It is crucial to develop, support, and enact regulatory frameworks and financial incentives that encourage biomass utilization and domestic renewable energy projects. For instance, FERC needs to mandate fair pricing equal to solar and ensure co-op power suppliers are not mandated to purchase only from the big utilities. Investing in infrastructure for biomass transportation and storage can facilitate the transition towards decentralized power generation and create opportunities for Hardwood mills to grow and stabilize their raw material supply. Furthermore, fostering cooperation between the utilities and Hardwood mills can unlock new opportunities for sustainable energy production while bolstering the resilience of the region’s Hardwood industry.
Biofuel, biomass, pulp, paper, and other plants or export terminals shutting down across the Southern United States are causing a ripple effect throughout the region’s economy. The situation poses a significant challenge to Hardwood mills, jeopardizing the economic viability of the region’s forestry sector. However, addressing regulatory barriers, granting access to capital, investing in infrastructure, and improving cooperation between federal and state governments, utilities, and Hardwood mills can mitigate the impacts of plant closures and pave the way for a more sustainable future.
Why knot advocate to solve our biomass crisis?
To learn more about the National Hardwood Lumber Association, visit www.nhla.com.
