Trading fossil and biogenic carbon emissions: Assessments of substitution effects for different value chains

The project has adopted a holistic perspective with the aim of producing quantitative results in the form of so-called substitution factors. These indicate the climate benefit of replacing emission-intensive materials and fuels with wood-based products. Substitution factors consider the properties of wood products, which non-wood products they replace, differences in the expected lifespan of the products, and how they are handled at the end of their life. The empirical focus has been on quantifying substitution factors for five overarching value chains for forest biomass: construction materials, packaging, paper products, furniture, and biochemical products and textiles. The substitution factors were used to assess the climate impact of various scenario descriptions.

The overall results indicate a general substitution effect in the order of magnitude of 1±1. This means that one unit of fossil carbon can be replaced by one unit of biogenic carbon. Higher substitution factors can be achieved under optimal scenarios and when specific emission-intensive materials are replaced. However, poor forest management and inappropriate use of forest biomass can reduce the substitution factors. The results also indicate that every scenario leads to negative net emissions, with an average avoided emission of 150 kt CO2 annually. The findings show that while harvesting and processing emissions remain relatively stable, avoided emissions drive most of the variation. The results emphasise the robustness of the climate benefits of wood substitution, especially in construction and packaging, where material displacement effects are strongest.

The project highlights the difficulty of calculating and applying substitution factors. The inclusion of substitution effects in the design of climate-related policy instruments should be done with caution. Time dynamics (e.g., evolving production processes, material choices, and technological development), together with complex value chains, affect the climate benefit, meaning that any policy measures targeting substitution effects are aiming at a moving target. Further research is needed to analyse the conditions and consequences of this. However, policy instruments that promote the use of wood materials can be effective and indirectly yield positive climate effects (e.g., via building codes).