Forestry Sector Resource Optimization with TIMES

Abstract

Latvia's wood industry is based mainly on three product groups - fuelwood, wood-based panels and furniture. This research adopts the TIMES modelling approach to assess the potential of forestry resources' contribution to the development of bioeconomy by evaluating different existing and new products. The modelling approach is commonly used for energy systems, however, the study shows the adaptation of TIMES for the forestry sector from the perspective of bioeconomy development analysis, considering wood resource demand in the energy sector and the benefits of higher added value product production. The aim of modelling is to find which are more economically feasible exploitation options and the optimal production amounts for wood and wood by-products, such as biofuels, xylan, and lyocell. The study results show that the potential production of new products with higher added value is compatible with currently existing wood demand trends of three main product groups. The result shows that the lyocell biorefinery scenario has the potential for adding 199.5 million euros to Latvia's GDP and helps achieve a 30 % increase in the added value of forestry resource use by 2030. To achieve the target, only 140 thousand tons (1.3 %) of total processed wood (total wood commodity is equal to 11 139 thousand tons) is used for lyocell biorefinery due to the high added value of the new product. Despite the various limitations of the model, the obtained results suggest that producing higher added-value products from forestry resources should be considered as a significant long-term supplementary driver of economic growth and bioeconomy development.