Forestry Investment Outlook Expects an Accelerating Bio-Economy Transition

New Forests, a global investment manager of nature-based real assets and natural capital strategies, has produced a white paper on the outlook for forestry investment over the next five years.  

Some themes discussed in the paper authored by David Brand, CEO New Forests, include the interlink between trade, supply chains and geopolitics; the rise of analytics and innovations in finance as well as decarbonisation.

A relevant and significant trend linked to the decarbonisation of the global economy according to Brand, is the need to transition to a circular bio-economy.

Circularity refers to the imperative to move away from the linear process of using natural resources in various products and then disposing of them as waste.

A circular economy re-uses, recycles, and re-purposes materials like paper recycling, re-use of glass bottles or taking wood waste from demolition sites and using it as feedstock in the production of wood panels.

The bio-economy is based on using renewable biomass from forestry and agriculture as the basis for a spectrum of materials in society.

Wood, wood fibre, woody biomass and biochemicals can substitute for much of the materials used in society, from concrete and steel in the built environment, polyester fabrics, plastic packaging, fillings, coatings, food additives, and even metals and batteries.

Brand says this is a tremendous opportunity for the forestry sector, and rapid innovation is occurring across a spectrum of goods and materials.

Scandinavia to Lead

Studies of the materials needed in a decarbonising economy suggest that by 2050, a net zero world would be consuming 40-fold the annual quantities of cobalt, copper, nickel and lithium7.

Even full recycling of these materials Brand says would only contribute about 17% of supply because of the escalation of demand relative to recycling supply. To most analysts this is an infeasible level of expansion of supply of these scarce metals and minerals.

This Brand says points to the relentless need to find ways to substitute for these critical minerals with refined biomass-based materials and bio-chemicals.

He adds that there is likely to be a rise of bio-refineries and wood processing ecosystems that produce core building materials, engineered wood products, wood fibre-based products and bio-chemicals and energy, with the most advanced efforts to implement the circular bio-economy, most likely to be led by developments in Scandinavia.

This in turn will eventually lead to biomass production baskets, with large-scale, relatively homogenous feedstock supplies, likely based on intensively managed timber plantations.

#Biomass #Decarbonising #BioEconomy