Complexity of Assessing Future Forest Bioenergy Markets—Review of Bioenergy Potential Estimates in the European Union

Purpose of Review The European Union’s targets to reduce greenhouse gas emissions have led to the increasing demand for forest biomass in energy production, which, in turn, has raised questions about the adequacy of supply and the sustainability of forest biomass resources for energy. Although the prospects of using biomass for energy have been studied extensively, the outcomes and estimates differ widely between studies. Understanding the differences between the estimates can facilitate their utilisation in policy and investment planning. In this review, we identify and summarise the factors and assumptions affecting the forest bioenergy potential estimates. Recent Findings For the purpose of comparing bioenergy potential estimates, there is a need to harmonise units, concepts and methods—the range of estimates is partly attributable to the differences in what the term potential refers to. In terms of methods, perhaps the most significant drawback in some of the previous estimates indicating a “market gap” has been the neglect of market mechanisms, i.e. price dynamics and international trade. Some essential market assumptions have also been overlooked, notably how the demand for and supply of forest biomass for energy are closely related to the development and vitality of traditional forest industries, as well as to the development of forest products markets. Summary The estimates for bioenergy potentials vary mostly due to differences in the scope of the studies, methods and approaches employed and assumptions concerning market developments. Studies have been primarily focused on the theoretical or technical potential for bioenergy and paid less attention to economic and sustainable potential that would provide more policy relevance. Further research on forest bioenergy resources could benefit from increased attention to the interdependencies between markets, the costs and externalities of bioenergy production and sustainability of forest biomass sourcing.