Estonia is beginning to see the cost of wood pellets. Is North Carolina next?

Trees loom large in North Carolina lore. “Here’s to the land of the long leaf pine,” begins the state toast, a tribute to the vast savannas that once covered the eastern coastal plain.

But since British colonial ships were first bound with tar, North Carolina forests have been as much a source of commerce as of custom. Now, the state is set to become the world’s largest single source of wood pellets, capsules of dried wood that have become a controversial substitute for coal in power plants in Europe and Asia. 

As scientists say more natural, diverse woodlands are needed to suck carbon out of the atmosphere, North Carolina climate advocates have been pleading with state officials to rein in the industrial biomass industry. Across the Atlantic, the country of Estonia offers a cautionary tale for what could happen if they don’t. 

Home to the world’s second largest pellet company, the small Baltic nation is converting many of its own storied forests from natural stands to tree farms. Activists say sacred groves and tourist attractions are suffering as a result, and government officials predict the timber plantations will store dramatically less carbon — with costly consequences for the country’s climate targets. 

The risk in North Carolina is less immediate. The administration of Gov. Roy Cooper has a plan to zero out emissions by 2050, but it doesn’t yet carry the force of law. Still, Estonia’s example is a warning signal to any government serious about keeping temperatures from rising above dangerous levels, advocates say. The message is to curb the growth of the industry and rethink the industry forestry model altogether. 

The rapid rise of the world’s No. 2 pellet company

The birthplace of Skype and Hotmail, Estonia may be best known today for its embrace of the internet. But for most of its long history — since glaciers first receded some 13,000 years ago — this land has been defined by its forests. Ancient Estonians relied on sacred groves for all manner of spiritual ritual. Pagans here were among the last in Europe to adopt Christianity; even then, they layered Viking and Christian customs on top of their nature-centered ones.

“After coming from the church on Sunday, people also went to the sacred groves, adding those rituals,” said Hasso Krull, a poet and academic at the University of Tartu. “It was a beautiful place to recover. If somebody was under stress, he went to the forest and somehow regained that power.”

Spruce, birch, pine, aspen and oak covered most of Estonia until the advent of agriculture. But by the time the country was caught in World War II’s tragic crosshairs, only about a third of it was forested. Much of this farmland reverted back to woods during Soviet occupation, and today they make up about half of the country.

The newly independent Estonia quickly set about protecting its forests. Half remains publicly owned, and half of that enjoys either protection or “strict protection” when it comes to logging. The country’s Forest Act requires at least a fifth of the nation’s stands to remain state-owned. Unlike in North Carolina, even privately-owned forests are subject to cut limits, and landowners are required to plant new trees after felling existing ones.

But as in North Carolina, the pellet trade has also become a key part of the forests products industry. Under an international accounting framework, wood pellet emissions are tracked in the land use sector (where trees and plants soak up and store carbon) rather than in the energy sector (where burning fossil fuels emit carbon.) Countries that burn wood pellets for electricity count their emissions as zero and heavily subsidize the fuel. While European countries that supply pellets are supposed to count emissions in their land use sector, the requirements have been lax. (In the United States, they’re nonexistent.)

As a result, this country of 1.3 million has rapidly become a top producer of pellets on the continent. Headquartered in the capital of Tallinn, Graanul Invest has the market cornered. With four mills in Estonia, another seven in Latvia and Lithuania, and one recently acquired in Texas, the company is now second only to U.S.-based Enviva in pellet production. Graanul’s CEO and majority owner, Raul Kirjanen, is one of the country’s wealthiest.

“The main driver of the pellet industry in Estonia is the renewable energy subsidies by the European Union,” said Asko Lõhmus, lead research fellow of conservation biology at the University of Tartu. “They are making the richest people in Estonia out of European taxpayers’ money.”

‘The scope of destruction’

Critics say the quest for pellets and other wood products has driven logging practices that threaten the sacred groves that remain today. Ahto Kaasik, a researcher at the University of Tartu, estimated in a 2018 report that some 4,000 natural sites across the country are still used as shrines, yet only a fifth of these are mapped and documented, and at least 80 have been logged or otherwise looted. These cases, Kaasick wrote, are only “representative examples of the state of the sanctuaries.”

Krull is among a small percentage in the country who identify as Pagan; the term is too “militant” sounding for the agreeable national psyche, he said. But most Estonians still appreciate and use sacred groves for restoration and rejuvenation, which is why he believes officials are purposefully avoiding documenting them. “There are too many sacred sites,” he said. “If everything would have been marked on a map you couldn’t log at all in Estonia.”

The Estonian government denies these claims. Logging in protected sacred groves can be approved by the country’s National Heritage Board, and the government is “actively improving the information on these sites,” a spokesperson for the Ministry of the Environment said in an email. Plus, activities in sacred groves on private land are up to the individual owner.

Yet the broad picture of the Estonian forest sector is clear: Satellite data from the University of Maryland, compiled by the World Resources Institute, shows Estonia lost 15% of its forest cover since 2001, with only a fraction getting replaced with new tree canopy. Data from the Ministry of Environment show more and more land is clear cut or cut to leave only middle-aged trees that can produce seeds. In fact, such “regeneration felling” has more than doubled in the last decade.

“One thing that hasn’t gotten that much attention is really the scope of destruction that has already taken place,” said Martin Luiga, international communications coordinator for Estonian Forest Aid, a citizen-driven forest protection group he helped found in 2016.

That trend has cut against Estonian’s official appeal to tourists, said Siim Kuresoo, who heads the forest program for the Estonian Fund for Nature, the first conservation group to form after the country gained independence in 1991. Estonia used to claim its forests were unparalleled throughout Europe because of their age and biodiversity, Kuresoo said. “It wasn’t absolute truth but there was some truth in it,” he said. But right now, “we are not in a position anymore where we can say our forests are so unique.”

‘They are going to be punished’

The Estonian government says logging rates are sustainable and projects them to continue apace, while land categorized as forests will hold steady. But because young forest stands retain less carbon, officials estimate the country’s forest will store 75% less carbon by 2040. Combined with an expected loss in cropland, that decrease will cause Estonia’s land use sector to be a source of carbon emissions rather than storage.

“That’s tragic,” said John Talberth, senior economist at the Center for Sustainable Economy, who recently examined carbon storage in North Carolina’s forests. “That’s the signal of high-density native forest, being converted to low-density timber plantations. That’s the exact data you would expect.”

Talberth dubs young pine plantations “carbon sequestration dead zones,” based on research that shows replanted areas release carbon for 10 to 15 years after being clear cut. In a report commissioned by Asheville-based Dogwood Alliance, he estimates the conversion of North Carolina’s natural forests to pine plantations has cut their carbon storage capacity in half, consistent with satellite data showing the state has lost over a fifth of its tree cover since 2000.  That — along with pollution from burning pellets and the decay of other wood products — makes logging the state’s third highest emitter of climate-warming emissions.

More research would be necessary, Talberth says, to convert these preliminary estimates into a figure that could be included in North Carolina’s annual inventory of greenhouse gas emissions; the registry currently shows the state’s land use sector retaining carbon at the same rate through 2030. In any case, for now the inventory is just that: an accounting of the state’s carbon pollution and sinks, without any regulatory force behind it.

That’s not the case in Estonia, where new requirements under the Paris Climate Agreement will begin to kick in in 2021. Measured over two five-year periods in the next decade, the rules compel European Union member states to maintain their average forest carbon storage amounts from 2000 to 2009, a target called the Forest Emissions Reference Level. 

In a presentation early this year, Estonian officials said maintaining the country’s reference level would mean logging about 10 million cubic meters of wood per year. Current logging rates are about 12.5 million cubic meters per year.

“The country that’s having its forest carbon sink hollowed out, like Estonia,”  said Mary Booth, the director of the Partnership for Public Integrity, “they are going to be punished.”

‘We should exploit it and not be afraid of it’

Estonia can avoid penalty by buying credits from another country or taking advantage of other exceptions in the system. The Ministry of the Environment of Estonia, however, denies the country would need to do that. “Estonia is obliged to follow the rules,” spokesperson Marju Kaasik said in an email, “and is not planning any activity that would contradict that.” 

Teet Randma, an energy expert with Estonian Green Movement and Eastern European group NGO CEE Bankwatch, believes his country is simply putting off the inevitable. “The government wants to delay and continue with the business as usual,” he said. But in about five years “when the bill comes,” he said, that course could put his country deeply in debt.

But Randma also sees opportunity. If Estonia stopped aggressive logging and restored its wetlands, he advised in a June Bankwatch report, it could store more carbon than its reference level requires and sell credits to other countries. In that way, other European countries could help finance Estonia’s badly-needed transition away from domestic oil shale, the source of almost all of the country’s electricity.

“We need to make huge investments in technology like solar, wind, electric cars, to name a few,” Randma said. “The European Union — at least in some part — is willing to pay for it. We should exploit it and not be afraid of it.”

‘An innovative forestry sector’?

Graanul Invest didn’t respond to multiple requests for comment for this story. But allies of Estonia’s forests products industry point to data showing that the country is more forested than at any time in the last century. They defend the type of regeneration felling that leaves some mature trees standing and cite national law that requires all clear-cuts to be replanted. And as in North Carolina, they say that a market for wood products helps convince Estonian landowners to keep replanting trees on their property rather than sell it for another use. 

In both places, critics acknowledge there’s a need for some wood products. But they question the prevailing model of the timber industry: intensive thinning and clear cutting followed by heavy use of fertilizers and pesticides to stimulate rapid regrowth. “That kind of forestry is completely incompatible with global climate change goals,” Talberth said.

Instead, many scientists favor allowing forests to naturally regenerate and then managing them for multiple uses, including timber, recreation, and carbon sequestration. Trees could be selectively harvested and thinned. Landowners would derive income from ecotourism, logging, and dividends under something like a carbon tax. 

It makes much more sense to underwrite such multi-use forests than the international wood pellet trade, biomass skeptics say. “If you’re concerned about forest growth,” said Duncan Brack, a researcher with the London-based think tank Chatham House, “why not just subsidize that directly?”

Lõhmus, the conservation biologist, believes his country’s best opportunity to pioneer what he calls the “land sharing approach,” was right after independence. “I really think that Estonia had an opportunity of building up an innovative forestry sector 20 years ago,” he said, “but it failed.”

A ‘focus on the real actions’

The land sector requirements under the European Union, however, could give Estonia a fresh chance to innovate. And if they are strengthened as many believe they must be, that chance becomes an imperative.

“We need to be doing all that we can to protect, restore, and enhance forests,” said Rita Frost, campaigns director with Dogwood Alliance. “Otherwise, we’re never going to be able to hit the 1.5-degree targets that are laid out in the Paris Climate Agreement.”

With the Trump administration poised to withdraw the United States from this treaty, North Carolina isn’t bound by this target. But Frost and other U.S. advocates believe the state is their best chance in the Southeast of subverting the current industrial forestry paradigm: Gov. Cooper last year issued an executive order aimed at curbing climate emissions, and this year published a Clean Energy Plan that both calls for carbon neutrality and criticizes the global wood pellet trade.

Such gestures, however, lack the force of law, so wood pellet foes on either side of the Atlantic keep pressing for more concrete progress locally. “We want to put the focus on the real actions,” said Linda-Mari Väli, a founder with Luiga of Estonian Forest Aid, which helped stop a proposed pulp mill south of Tartu last year. At the same time, Väli said, Estonia and North Carolina share a connection. “We both are feeding the European Union energy factories,” she said. “I think the Estonians and Americans should unite their minds and their power to fight against this.”

This article originally appeared in the Energy News Network on December 12th, 2019.