U.S. Leadership in Sustainable Wood Products Begins with Innovation

This blog was written in partnership between BPC and the University of Tennessee, Knoxville’s Baker School of Public Policy and Public Affairs.

Global consumer demand for sustainable products and materials is increasing, driven in part by a growing recognition of the environmental impact of product and material sourcing, manufacturing, and end of life. Recent surveys show that consumers are willing to pay a price premium for products that are better for the environment.

Innovation in wood products can meet this mounting demand while also displacing the use of more emissions-intensive materials. According to the United Nations’ Food and Agricultural Organization, the use of wood products results in lower greenhouse gas emissions over their lifecycle, when compared to products made from non-renewable or emissions-intensive materials like steel, cement, and plastics. Research further shows that when sustainably-sourced wood is used in place of other construction materials, there is an average emissions reduction of approximately 0.9 kilograms (kg) carbon for every 1 kg carbon in the wood used, with innovative management practices holding significant promise as nature-based solutions to climate change.

Despite these trends, the United States lags Canada, Australia, and many European nations in commercializing innovative wood products such as mass timber building systems, wood fiber insulation, and wood fiber nanotechnologies. Significant federal policy opportunities exist to bolster wood innovation, building on the U.S. Forest Service’s Wood Innovation Grant Program that received new funding in the Bipartisan Infrastructure Law and the Inflation Reduction Act. The Bipartisan Policy Center’s Farm & Forest Carbon Solutions Task Force identified this as a policy priority, recommending that “USDA explore ways to support emerging markets for innovative wood products through new incentives for domestic manufacturers, federal procurement across executive branch agencies, and other options.”

There is great potential for sustainably-sourced forest biomass to be used in a wide range of products beyond lumber and furniture. Applications such as biofuels, biochemicals, bioplastics, composites, and nanomaterials for the automotive, aerospace, electronics, and medical device industries can replace many emissions-intensive products. Vast domestic forest resources mean that the United States could be a global leader in innovative wood products, building on the foundation of today’s industry. Within the United States:

• Approximately 30% of the land area is forested.
• More than 50% of the 765 million acres of forestland are privately owned.
• The forest products industry employs approximately 950,000 people and contributes nearly 5% to domestic manufacturing GDP.
• Timber production represents two-thirds of forest land use.

What limits market opportunities for forest products?

The forest products market is constrained by several intersecting and compounding factors: decreased federal research capacity and funding for research at land-grant universities, coupled with reduced private sector investment has ultimately stifled the innovation needed to ensure the industry remains competitive. Slowed innovation and broader market forces have lowered the demand for products from the domestic forest sector. These converging challenges have constricted the forest science workforce, which further constrains the market:

• Federal research capacity in the forest sector has fallen by half in recent decades, with only 25% of federal staff working in forest products and technology compared to 35 years ago.
• The private sector has not offset these declines, because the forest sector industry has largely transitioned away from vertical integration, meaning that in-house research programs were less useful and disbanded. Furthermore, compared to other industries, private sector investment in forest research and development is significantly lacking.
• There has been a loss of research capacity at land-grant universities as state funding has declined and federal grant priorities have increasingly focused on basic research.
• At the same time, there has been a reduced forest science workforce, with research showing that the number of American forest scientists declined by 12% between 2002 and 2016.
• The domestic forest products sector has faced significant contraction dating back to the 2008 recession and collapse of the housing market, and amid a backdrop of a downward trend in pulp and paper manufacturing and demand.

What’s at stake?

Missed opportunities for R&D investments don’t simply curtail innovation but also diminish U.S. competitiveness on a global level, particularly at a time when consumer demand for sustainable products is growing. According to the U.S. Forest Service, such innovation serves to: “increase efficiency, decrease waste, provide sustainable products that can sequester carbon, and create jobs for Americans by supporting business development and expansion.”

Reduced public and private R&D is also limiting innovation for market-based approaches to financing critical wildfire prevention and forest health management activities. After forests are harvested or thinned for commercial, forest health, or wildfire prevention purposes, leftover biomass like small diameter limbs and branches are often left on the forest floor. Such materials are known as forestry residuals, residues, or slash. A lack of adequate market demand for forestry residuals has contributed to rising costs for manufacturers and land managers to sell or dispose of the materials. There also remain concerns around the environmental impacts of market incentives for biomass removal efforts. Given cost pressures and lack of other alternatives, land managers typically gather and burn the material in slash piles, which can contribute to increased wildfire risk and air quality degradation, or the material is left untreated in the forest. Advancing wood products manufacturing could generate revenue to help address this challenge by driving down the net cost of forest management.

What’s needed?

Tackling the barriers addressed above, we identify several key elements to advance wood products innovation and adoption. Cultivating strong partnerships is vital to support fundamental wood innovation science and address the forest products industry’s challenges and future needs.

To address the growing concerns around natural resource management and climate change, innovation in forest products research is vital. Over the last decade, in response to market factors, the U.S. forest products industry has had to rationalize and reduce its long-term research efforts, which clearly drives the need for a government-academic-industry partnership to revive the industry and foster innovation.

Increase investments in R&D: Robustly supported innovation is critical to ensure products and processes are competitive in the market, based on improved performance, functionality, energy and cost-efficiency, reliability, or quality. Public-private financial support for R&D projects can be especially helpful to identify novel opportunities for sustainable materials and meet market needs.

Foster a collaborative culture for commercialization: Research and cooperation are vital along the entire value chain for sustainable wood products. Partnerships like the Alliance for Pulp & Paper Technology Innovation should be cultivated among government, academia, and industry because strong networks of diverse researchers and practitioners can enable collaboration, facilitate cross-disciplinary partnerships, and bring fresh ideas to the industry to enhance innovation. Such partnerships can also be instrumental in accelerating strategies for responsible regional resource use; initiatives to provide for product retrieval from the customer, recycling, or other end-of-life disposal; pipelines for pilot to full-scale production; certification and incentives for bio-based alternatives; and consumer preferences and perception.

Bolstering the domestic forest products industry can generate robust economic benefits for forest landowners while advancing climate mitigation and ecosystem resilience. Building on the recommendations presented here, policymakers can help spur vital wood innovation industries.

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Nourredine Abdoulmoumine, Ph.D., Associate Professor
Center for Renewable Carbon and Biosystems Engineering and Soil Science Department, University of Tennessee, Institute of Agriculture.

Nicole Labbé, Ph.D., Assistant Director and Professor
Center for Renewable Carbon and School of Natural Resources, University of Tennessee, Institute of Agriculture.

Caroline Normile, Ph.D., Senior Policy Advisor
Bipartisan Policy Center Energy Program