Implications of the LULUCF-regulation for the Swedish forest-based sector Mårten Larsson Deputy Director General Swedish Forest Industries Federation

Our vision The forest based sector drives growth in the globala bioeconomy Swedens climate vision and goal One of the first fossil-free welfare states in the world Fossil-free 2045

Source: VMR/SDC/Swedish Forest Industries Federation, 2014 The Swedish forest industry and the Swedish energy sector forms a cluster Million m3sub* Sawmills & plywoodind. 26,4 Export 0,7 Import 7,8 Sawn timber 36,3 Wood chips 9,9 Harvest 70,7 71,6 ~100 TWh of bioenergy in the Swedish energy system Fuelwood etc 6,2 Pulpwood 35,3 Pulp & paper industry. 45,2 *Solid volume under bark Source: VMR/SDC/Swedish Forest Industries Federation, 2014

Policy-makers Forest owners Forest industry Profound knowledge about the forest resource is needed for governance Investment decisions in the forest industry Investments in renewable energy Investments in forestry Energy policy Industrial policy Forest policy Demands for even harvesting level over time for individual property Minimum age for harvesting Appropriate harvesting methods Demands for regeneration Important issues Policy-makers Added-value (jobs and investments) Sustainable management of resources Development Forest owners Security of demand Profitability Forest industry Security of supply. 20-40 years horizon for investments Wood cost Profit = Competetive conditions, (globally) Forest industry

IPCCs IV assesment report Carbon flux IPCCs IV assesment report In the long term, a sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an annual sustained yield of timber, fibre or energy from the forest, will generate the largest sustained mitigation benefit. = FRL should be as high as possible taking into account that future generations will have at least as good access to forest biomass as we have.

or carbon sink… Carbon sinks in forests is a risky strategy in a changing climate

Sustainable harvesting levels 1933-2029 Source: Forest Agency, rolling 5 years average

Sustainable harvesting levels 1933-2029 Source: Forest Agency, rolling 5 years average

SFIF - Strategic goals for LULUCF Keep national competence = Continuation of forest legislation and management practice. Support a growing bioeconomy No reduction for historic intensity A model that supports an active sustainable forest management No flexibility between Managed Forests and other sectors Use best available data Avoid carbon leakage = Limited harvest in the EU will increase imports to the EU and harvests in third countries

Implications for the Swedish forest-based sector. Definitely ”thumps up” but the job is not finished yet The political agreement Implementation Det här fotot av Okänd författare licensieras enligt CC BY-SA

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Emissions of Greenhouse Gases From Land Use in Sweden CO2-equivalents, Million Tonnes/year Minus = Carbon Sink Source: Swedish Environmental Protection Agency

Integrating LULUCF in EUs Climate- and energy legislation touches national competence EU has large/full competence Energy EU has relatively large competence but certain issues as energy mix is national competence Tax EU has no competence except for state-aid guidelines Forestry EU has no competence. Full subsidiarity for member states

Assumptions about forests and climate change benefits - what science tells us. If you assume that biomass must regrow after harvest biomass is worse than coal in the short term. In the long term trees will regrow and then bioenergy will be better than coal. If you assume that we grow the trees first, then bioenergy is always better than coal. Suppose we manage an entire state of forests. At any one time harvesting and growing occur simultaneously. Carbon goes into the forest at the same, or higher, rate than it goes out. Bioenergy is far better than coal. Add product substitution and HWP and the climate change mitigation potential is even higher.