Forestry & Timberland

U.S. timberland owners are concerned with improving forest health and resilience in the face of threats like wildfires, insects, and disease. Thinning and restoration projects are seen as beneficial for reducing tree density and competition, allowing remaining trees to grow stronger and be more resistant to threats. However, federal agencies like the U.S. Forest Service face implementation challenges at the necessary scale due to budget constraints, bureaucracy, and litigation from environmental groups. Still, timberland owners want to see streamlined processes and increased funding from Congress to expedite forest management projects.

Another major concern is the preservation of old growth and mature forests which play an important role in carbon sequestration. However, timberland owners feel restrictions on logging these forests have gone too far, hampering their ability to actively manage forests. They want changes to Forest Service plans to allow some logging in old growth forests. Environmental groups strongly oppose this.

Overall, timberland owners want policies that balance forest management for health and commercial use with conservation. They seek compromise solutions and collaboration between stakeholders. Groups like the Pinchot Partners exemplify this approach. But challenges remain in aligning the goals of the timber industry and environmental groups.

The demand for wood pellets globally is expected to increase dramatically in the coming years, driven largely by Asia and Europe looking to replace coal with biomass for electricity generation.

• Japan and South Korea are two of the largest importers of wood pellets, with Japan's demand alone projected to reach 20 million tonnes by 2030, up from eight million currently.
• Vietnam has become the second largest wood pellet exporter after the U.S., recently signing a three-year deal to supply pellets to Japan.
• While Canada has historically been the major supplier of lumber imports to the U.S., British Columbia has seen a major decline in production capacity over the past five years. As a result, European sawmills have been able to increase their share of the U.S. lumber import market to 15%, with opportunities for continued growth in lumber supply to the U.S. in the coming decade.
• Domestically, new legislation like the Timber Innovation for Building Rural Communities Act aims to further support and incentivize wood product innovation and use, including for mass timber construction. Federal pilot programs to demonstrate the use of wood products in rural infrastructure could also boost demand.

With global demand increasing, particularly in Asia, and constraints on supply from traditional sources like Canada, U.S. timberland owners appear well-positioned to benefit from growing export opportunities for wood pellets and other wood products in the years ahead.

Corporate 'net zero' goals are linked to increased interest in forest planting and carbon trading because forests act as natural carbon sinks. Planting trees or avoiding deforestation can offset a company's emissions, helping it achieve net zero goals.

Several articles discuss companies like Apple, Goldman Sachs, and Shell investing in forest carbon projects to generate credits to counterbalance their emissions. However, recent studies have exposed issues with forest carbon offsets, finding many projects exaggerated emissions savings. This has made some companies reconsider offset purchases amid 'greenwashing' concerns.

EasyJet, Nestlé, and fashion brand Gucci have reduced offset buying due to uncertainty around forest project benefits. Voluntary carbon markets, including forestry offsets, declined 8% in the first half of 2022 - the first drop in years.

Still, the American Forest Foundation states that family-owned forests represent an underutilized climate solution. The group calls for innovative carbon financing models to incentivize small landowners to manage forests for climate mitigation.

The U.S. paper industry also touts its use of sustainable forestry practices to absorb and store carbon.

Overall, corporate net zero goals have increased interest in forest projects, but scrutiny of offset quality has prompted reevaluation of some strategies. More investment in robust measurement and innovative finance is needed to fully realize the potential climate benefits of forests.