Carbon neutrality as a basis for biomass utilization in the forest circular economy
Updated by Takanobu Aikawa on July 09, 2025, 7:50 PM JST
Takanobu AIKAWA
PwC Consulting Godo Kaisha
Senior Manager, PwC Intelligence, PwC Consulting LLC / With a background in forest ecology and policy studies, he has been extensively engaged in research and consulting for the forestry and forestry sectors for the Forestry Agency and local governments. In particular, he contributed to the establishment of human resource development programs and qualification systems in the forestry sector in Japan, based on comparisons with developed countries in Europe and the United States. In the wake of the Great East Japan Earthquake, engaged in surveys and research for the introduction of renewable energy, particularly biomass energy; participated in the formulation of sustainability standards for biomass fuels under the FIT system; since July 2024, in his current position, leads overall sustainability activities with a focus on climate change. He holds a master's degree in forest ecology from the Graduate School of Agriculture, Kyoto University, and a doctorate in forest policy from the Graduate School of Agricultural Science, Hokkaido University.
The premise of many discussions of wood use is that forest biomass is carbon neutral. However, it seems that surprisingly few people can accurately explain this concept. Let us explain this principle, which is the basis for the concept of a "circular forest economy.
The idea that forest biomass is carbon neutral became the basis for the use of forest biomass for energy. In addition, sustainability standards have been developed in the EU, the UK, and Japan to ensure that only sustainable wood is used as fuel, and third-party certification is now required for certification.
Despite these measures, criticisms such as "forest biomass is not carbon neutral" and "biomass power generation is worse than coal (thermal power generation)" have come from academia as well as environmental groups.
Many may think that this issue is a criticism of large-scale imported biomass power generation in the case of Japan, and that it has nothing to do with other energy uses (small-scale heat use) or material uses (bioplastics, wooden construction). However, the author believes that this issue is actually an essential question that is common to all applications.
Can forest biomass really be called carbon neutral?
Forests (trees) absorb CO2 from the atmosphere through photosynthesis and synthesize biomass. When they are used and eventually release CO2 to the atmosphere through combustion (with or without energy use), they simply return to their original state, thus having no effect on the CO2 concentration in the atmosphere. In other words, they are carbon neutral, which is probably the simplest explanation. In the case of the use of annual herbaceous plants, this applies neatly.
On the other hand, in the case of fossil fuels, CO2 absorbed by plants hundreds of millions of years ago is denatured and fossilized, but if it is dug out of the ground and burned, it takes geological years for it to become fossilized again. In other words, it increases the CO2 concentration in the atmosphere and is therefore a major cause of climate change.
On the other hand, what must be considered in the case of forests is the time required for trees to reabsorb. In the minds of those involved in the forestry industry, whether in Japan or abroad, there is a "cycle" diagram in which trees are planted, nurtured, harvested, and then used and reforested. However, the problem here is the time required for reabsorption: to keep the temperature rise below 1.5°C by 2050, CO2 emissions are basically aimed at zero, but the CO2 emitted by forest biomass becomes a "liability.
Of course, what is assumed in the figure is a fixed plot (forest area) such as 1 ha, and in reality, there are forest areas in the vicinity that have not been logged and continue to grow, absorbing CO2. In Japan as a whole, although a large number of forest areas are being logged, forest biomass use may be justified by the fact that the net forest accumulation is increasing.
Thus, when considering the carbon neutrality of biomass use, it is necessary to pair it with the increase or decrease in carbon stocks in the forest over a wide area. This is called the landscape approach. In fact, this is the very approach taken in the guidelines prepared by the IPCC for the preparation of GHG inventories to be submitted by countries to the UNFCCC treaty secretariat.
The IPCC guidelines do not account for biomass-derived CO2 as anthropogenic emissions. Since they require reporting of changes in forest carbon stocks, there is no theoretical omission, even though there is a question of how accurately gross absorption and emissions are captured. In addition, CO2 and other GHGs (methane and N2O) from fuels and fertilizers used in production, transportation, and processing must be accounted for as emissions.
Despite the creation of such a logically consistent carbon accounting system, the reason why forest biomass utilization is viewed with skepticism is that forests around the world are being reduced by being cut down and converted to plantations, which are a major source of CO2 emissions. It is important to understand that while the idea that "using trees is good for the environment" may be widely accepted in Japan, this is not necessarily true in the rest of the world.
As of 2020, there are approximately 4 billion hectares of forests on the planet, which is said to cover about 30% of the land area. However, the area of forests continues to decline, with forests decreasing at a rate of 6 million hectares per year in the decade since 2015. The carbon stock of forest ecosystems is estimated to be huge at more than 660 billion t-C, which means that 4.1 Gt of CO2 was emitted each year as a result of this deforestation (2014-2023 average, source: Global Carbon Project (2024)" Global Carbon Budget 2024").
Although this value is small compared to the 35.6 Gt of emissions from fossil fuel use and industrial processes, it is more serious in that no solution has been found, considering that the accelerated introduction of renewable energy sources such as solar power and wind power has put us on track to reduce CO2 emissions from fossil fuel sources. Therefore, at COP26 in 2021, more than 140 countries and regions around the world, including Japan, participated and agreed to the "Glasgow Leaders' Declaration on Forest and Land Use" to halt deforestation by 2030.
And it is estimated that about 60% of deforestation, on an area basis, is due to the conversion of plantations for the production of agricultural and forestry commodities. Specifically, most of the agricultural commodities are palm oil, soybeans, cattle, coffee, etc., but timber (fiber) production is also included. Ninety percent of deforestation occurs in primary tropical forests, and the conversion of these to single-species timber plantations is also counted as deforestation. As the term "fiber" implies, the conversion to eucalyptus and acacia for papermaking is assumed.
Thus, it is important to note that the claim that "forest biomass is carbon neutral and can be used to combat climate change" is conditional on forest accumulation being maintained and increased. In the case of old-growth forests, the basic principle is to stop logging, but empirical data have confirmed that in planted forestry areas, mainly in Europe and the United States, people are rather investing in forests because logging is more profitable, and as a result, accumulation is increasing. From this, we arrive at the moderate conclusion that we should consider the optimal balance between forest use and conservation for each region, while still facing the challenges of the world as a whole.
In addition, the same forest biomass can be used in a variety of ways, including long-life uses such as building materials, energy uses such as paper and plastic, which are usually burned within a year and emit CO2, and so on. From the standpoint of climate change countermeasures, it can be said that priority should be given to long-lived uses in that they can retain the CO2 absorbed by forests for a long period of time. However, paper products and biomass fuels are made from wood offcuts, which are essential for improving the economics of the forestry and timber industries, and they also reduce fossil fuels by replacing fossil fuels and plastics made from them. Conversely, if the combustion of endwood is considered an emission, the carbon footprint of building materials becomes extremely large, and the "environmentally friendly" claim is shaken.
From the above, another common sense conclusion can be drawn that, based on sustainable management of forests, it is important to maximize the amount of CO2 removed from the atmosphere and the amount of fossil fuel-derived CO2 replaced by cascade use in the entire forest, forestry, and wood use system. (Takanobu Aikawa, Senior Manager, PwC Intelligence, PwC Consulting, LLC)
■References
Takanobu Aikawa (2025) "Stemming Deforestation and Forest Fires - Businesses Must Face the Complexity of ForestsPwC Intelligence Climate Change Report Vol. 9
Takanobu Aikawa (2023) "Climate Neutrality of the Biomass Carbon Cycle Understanding the Forest Biomass 'Carbon Debt' DebateNatural Energy Foundation Commentary Report