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Woody Biomass for EnergyNGO Concerns and RecommendationsApril 2011

This report was prepared with the financial assistance of the Dutch Ministry of Housing, Spatial Planning and theEnvironment and the European Commission. The views expressed do not however imply the expression of any opinionon the part of any of the donors. The donors are not responsible for any use of the information contained within thisreport.ii

Executive summaryUnder the EU Renewable Energy Directive, 20 per cent of overall EU final energyconsumption should be fulfilled by renewable sources by 2020. According to MemberStates’ National Renewable Energy Action Plans (NREAPs), a significant share ofrenewable energy is expected to come from bioenergy (bioliquids, biofuels, solid andgaseous biomass for transport, electricity, heating and cooling). The rapid expansion ofenergy production from biomass derives from the Member States’ planning a staggeringincrease in feedstock exploitation.While the NREAPs indicate that woody biomass will be heavily relied on to meet MemberStates’ renewable energy targets, reliable data regarding how much woody biomass canbe sustainably supplied is hard to come by. However, we do know that, even without theincreased demands placed on forest resources by policies encouraging the use ofbiomass for energy, there are already many other competing demands—both industrialuses and ecosystem functions or services—on limited forest resources.The majority of forests in the world are not well managed. It is essential that wemanage global forest resources sustainably. Forests are a strong ally against climatechange, as well as home to 90 per cent of terrestrial biodiversity, and a resource uponwhich more than one billion people depend for their livelihoods.Studies show that claims that we can increase the harvesting of wood for biomass usewithout serious negative environmental or social impacts are unfounded. EUconsumption of biomass should not further increase the already-too-large EU ecologicalfootprint and should not have long-term negative environmental or social impacts.Therefore, the EU should base its biomass use on what forests can sustainably supply,applying the precautionary principle. This report shows that the opposite is happening.The EU and Member States use the demand for biomass as starting point, rather thanaligning biomass policies with limited supply.At the beginning of 2011, the European Commission started a public consultation inpreparation of a report on additional sustainability measures at EU level for solid andgaseous biomass used in electricity, heating and cooling. The consultation is intended toanalyse whether the EU needs to take further action to ensure that biomass used forenergy is sustainable, in particular in light of the developments in the bioenergy sectorand considering the impacts of the developments of national and regional(solid/gaseous) biomass sustainability schemes. Existing international, EU, and MemberState policy frameworks are wholly inadequate for ensuring that the production and useof biomass for energy will be sustainable. There is no overall framework that a biomasspolicy could fit into. The biomass consultation refers to various policies that are eitherunder development or may never be developed, clearly indicating the lack of such aframework. The national schemes that have been developed so far also fail to convinceiii

us that they will sufficiently address key aspects necessary to ensure biomasssustainability. There is therefore at the moment no choice other than to ensure that anEU biomass policy should be standard-setting in itself. This requires a strict policy thatsets clear limits for where and how biomass can be used, as well as how and to whatextent woody biomass can be harvested and forests managed.In addition, current legislation considers biomass a ‘carbon neutral’ source of energy.This is based on an assumption that the carbon released by the combustion of biomassis recaptured during its re-growth, so that the cycle closes with zero greenhouse gasimpacts. Recent studies, however, have demonstrated that this assumption is erroneousbecause it overlooks at least two important issues: (i) emissions from biomass extractionand from land-use change (both direct and indirect), and (ii) the time differencebetween emissions from combustion and re-absorption through re-growth. But the othermeasures recommended here—including the reduction of overall energy demand,improved energy efficiency, the need for policy coherence, and the need for biomasspolicy to be aligned with a limited sustainable supply—are equally, if not more,important. If this whole package of measures is not taken up in its entirety, then theEU’s targets for renewable energy—if allowed to be met by unsustainable biomass—willact as a major destructive force for EU and global forests.There is great risk that EU biomass policy will become yet another example of movingforward policy frameworks that cross-reference other inadequate, incomplete, or yet-tobe-developed frameworks rather than filling identified gaps in policy, particularly when itcomes to sustainability measures. This practice has become a recipe for adopting policyincentives without simultaneously ensuring that the incentivised activities will be pursuedin an environmentally sustainable manner, in clear violation of the precautionaryprinciple.The mandate in the RED requires the Commission to address biomass sustainabilityconcerns. This mandate provides an opportunity to reinforce and reform relatedframeworks for the sustainable management of forests, both within and outside the EU.It furthermore provides the opportunity to take other necessary measures to ensure thatthe production and use of biomass for energy is aligned with what can be sustainablysupplied rather than driven by unregulated demand. Omitting to do so would be a majorpolicy failure.As woody biomass is expected to remain the most important biomass source by 2020,the report is focuses mainly on woody biomass. This report will not deal with other formsof biomass.iv

Table of Content1.Introduction2.EU Biomass Policy in relation to Sustainable Supplies of, and Demand for,2.11Forest Resources4Biomass: a sustainable source of energy?42.1.1NREAPs are an unreliable reference for estimating biomass supply, use,and impacts52.1.2What NREAPs tell us about woody biomass supply62.1.3Availability of biomass in the EU to achieve the 2020 target82.1.4Imports of biomass from outside the EU92.2Under Current Policies, Demand for Forest Resources Will Exceed Supply122.2.1The mistaken assumption that forests supplying EU demand aremanaged sustainably2.2.2Increasing biomass demand increases threat to forest biodiversity12132.2.3The exception for biomass installations under one MW excludes a significant cumulativeamount of forest biomass from sustainability criteria2.2.4The need to reduce overall energy demand2.31516Current Biomass Policies are not Aligned with Sustainable ForestManagement Objectives163.Climatic Impacts of Biomass173.1Is biomass a ‘carbon neutral’ source of energy?173.2International carbon accounting rules (LULUCF) are not adequate to ensure emissionsfrom land use are accounted for214.The Legal Framework for Biomass224.1The Renewable Energy Directive and the February 2010 Biomass Report224.2Lack of coherence and perverse incentives in current policies impacting forests254.2.1EU forest policy254.2.2Do other policies contribute to sustainable biomass production and use?264.329Member State legal frameworks for biomass4.3.1Case study: The UK294.3.2Case study: Finland324.3.3Case study: Bulgaria344.437Public consultation on several NREAPs was inadequatev

5.Conclusions and Recommendations5.1The Commission must take action to fulfil the RED’s legislative mandate on sustainabilitymeasures for biomass5.25.33838Sustainability measures for biomass must be pursued in the context of acoherent energy strategy39Recommendations395.3.1Reduce overall energy demand395.3.2Restrict the use of biomass for energy to levels that can be sustainablysupplied, not driven by unregulated demand5.3.3Ensure consistency with other frameworks41415.3.4Ensure meaningful stakeholder participation in the development of NREAPsand the actions they call for425.3.5Reject the myth that all biomass for energy is ‘climate neutral’426.44Conclusionvi

List of abbreviationsRED: Renewable Energy Directive 1NREAP: National Renewable Energy Action PlanEU: European UnionCAP: Common Agricultural PolicyLULUCF: land use, land-use change and forestryREDD: reducing emissions from deforestation and forest degradationGHGs: greenhouse gasesLUC: land-use changeILUC: indirect land use changeMtoe: Million Tonnes of Oil EquivalentROO: Renewable Obligation OrderNPS: National Policy StatementDECC: Department of Energy and Climate ChangeCBD: Convention on Biological DiversityEEA: European Environment AgencyExplanation of termsBiomass: the biodegradable fraction of products, waste and residues from biological originfrom agriculture (including vegetal and animal substances), forestry and related industriesincluding fisheries and aquaculture, as well as the biodegradable fraction of industrial andmunicipal waste.2Bioliquid: liquid fuel for energy purposes other than for transport, including electricity andheating and cooling produced from biomass. 3Biofuel: liquid or gaseous fuel for transport produced from biomass. 4Woody biomass: biomass originating from forestry, wood processing industries or recycledwood products. Short rotation coppice often qualifies as an agricultural practice and hencewood originating from short rotation coppice is often excluded from the term ‘woody biomass’.Nonetheless some studies include wood from short rotation coppice in their woody biomasspotential. These terms should therefore be treated with care. It should be noted that the sameproblems related to lack of arable land, mismatch of supply and demand, sustainability andenergy efficient use of woody biomass, apply as much to wood originating from short rotationcoppice as wood from forestry practices.1Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of theuse of energy from renewable sources and amending and subsequently repealing Directive 2001/77/EC and2003/30/EC, OJ L 140, 05.06.2009, pp. 16 – 62.2RED, Art. 2(e).3RED, Art. 2(h)4RED, Art. 2(i).vii

Primary biomass: biomass directly from forestry or agriculture. 5Direct supply of woody biomass: biomass directly from the forest including from fellings,residues from fellings, landscape management residues. 6Indirect supply of woody biomass: biomass from residues from wood working industry, byproducts of the pulp and paper industry, processed wood fuels, post consumer recycled woodand other. 7Carbon debt: the net GHG emissions in the atmosphere where carbon is emitted upfront byharvesting biomass in forests and associated management changes, but it takes many years ordecades to recapture the carbon in soils and vegetation.Gross final energy consumption: the energy commodities delivered for energy purposes toindustry, transport, households, services including public services, agriculture, forestry andfisheries, including the consumption, of electricity and heat by the energy branch for electricityand heat production and including losses of electricity and heat in distribution andtransmission. 8Black liquor: lignin residue left by the chemical pulping process when extracting cellulose fromwood.5Report from the Commission to the Council and the European Parliament on sustainability requirements forthe use of solid and gaseous biomass sources in electricity, heating and cooling, COM(2010) 11 final(hereinafter Biomass Report).6Commission Decision 2009/548/EC of 30 June 2009 establishing a template for National Renewable EnergyAction Plans under Directive 2009/28/EC of the European Parliament and of the Council, OJ L 182, 15.07.2009,pp. 33 – 62.7Commission Decision 2009/548/EC.8RED, Art. 2(f).viii

Woody Biomass for Energy: NGO Concerns and RecommendationsApril 20111. IntroductionThe control of European energy consumption and the increased use ofenergy from renewable sources, together with energy savings andincreased energy efficiency, constitute important parts of the package ofmeasures needed to reduce greenhouse gas emissions.9With these opening words, the Renewable Energy Directive (RED) justifies the adoptionof mandatory renewable energy targets for the Member States in their total energyconsumption.10 Under the RED, 20 per cent of overall EU final energy consumptionshould be fulfilled by renewable sources by 2020. In particular, a significant share ofrenewable energy is expected to come from biomass.Biomass isthe biodegradable fraction of products, waste and residues frombiological origin from agriculture (including vegetal and animalsubstances), forestry and related industries including fisheries andaquaculture, as well as the biodegradable fraction of industrial andmunicipal waste.11In practice, biomass for energy generation can be divided into three categories: forestbiomass, agricultural biomass, and waste biomass. 12RED requires each Member State to adopt and publish a National Renewable EnergyAction Plan (NREAP) setting out the roadmap for achieving the targets. 13 Analysis of theNREAPs shows that aggregate EU renewable energy production is expected to grow from99 Mtoe in 2005 to 245 Mtoe in 2020. At the same time, however, energy consumption isalso projected to grow from 1166 Mtoe to 1317 Mtoe. 14 Energy from solid biomass, inparticular, is anticipated to rise from 53 Mtoe in 2005 to 90 Mtoe in 2020, of which 139RED, Recital 1.RED, Art. 1.11RED, Art. 2(e).12Forest biomass includes: direct and indirect supply of wood biomass from forests and other woodedland, such as logs, stumps, leaves, branches, bark, cut-offs, woodchips, and sawdust. Agriculturalbiomass includes: crops and fishery products, by-products, and residues, such as straw and animalmanure. Waste biomass includes: organic waste, including landfill gas, sewage sludge, industrial waste(paper, cardboard, pallets), and municipal solid waste (garden and park waste, food and kitchen wastefrom households, restaurants, caterers and retail premises, and comparable waste from foodprocessing plants). IEEP, Atanasiu B., The role of bioenergy in the National Renewable Energy ActionPlans: A first identification of issues and uncertainties , November 2010, p. 11.13RED, Art. 4.14Energy Research Centre of the Netherlands (ECN), Beurskens L. W. M. and Hekkenberg M.,Renewable Energy Projections as Published in the National Renewable Energy Action Plans of theEuropean Member States , February 2011, p. 239.101

Woody Biomass for Energy: NGO Concerns and RecommendationsApril 2011Mtoe in the electricity sector (a 160 per cent increase over 2005 levels) and 77 Mtoe inthe heat and power sector (up 60 per cent from 2005). 15The rapid expansion of energy production (for transport, electricity, heating and cooling)from biomass derives from the Member States’ planning a staggering increase infeedstock exploitation. For example, feedstock exploitation will rise by over 3000 percent in Portugal, by 1379 per cent in the Netherlands and by 636 per cent in Ireland.Supply of woody biomass 16 is expected to grow by 354 per cent in Italy, 201 per cent inSlovenia and 111 per cent in Ireland. Use of agricultural crops and fishery products forenergy generation will increase by half over 2006 levels (from 19.6 per cent to 31 percent), while by-products from the same sources are expected to more than triple in allMember States. 17 While several NREAPs estimate large domestic potentials for woodybiomass, they usually do not provide details on how forestry resources will be collectedor the forests managed to ensure sustainability. 18The following graph compares biomass feedstock exploitation in 2006 with estimated useby 2020 according to 23 NREAPs and highlights the relative contribution of differentfeedstock:Figure 1 - Biomass feedstock in 2006 and the NREAPs estimations by 2020. 19In addition, estimates show that 48 per cent of biomass potential from domesticfeedstock is already exploited, 20 thus raising serious concern over whether European15ECN (2011), p. 239.Including the indirect supply of woody biomass17IEEP (2010), p. 11.18IEEP (2010), p. 10.19IEEP (2010), p. 12.20EUBIONET3, Junginger M. et al., Solutions to overcome barriers in bioenergy markets in Europe ,February 2011, p. 11. Data refer to the year 2006.162

Woody Biomass for Energy: NGO Concerns and RecommendationsApril 2011biomass demand can be met from domestic sources. The alternative—relying uponimports—would exacerbate the Union’s footprint on global natural resources and be atcross-purposes with its ambition to lead the world’s efforts towards climate changemitigation.In fact, while a market for biomass feedstock has already developed within the EU, tradeis increasingly becoming international. Especially the trade in refined products such aswood pellets has been growing strongly and is expected to increase further in thecoming years. This is because wood pellets couple high energy content with lowmoisture and size, so that they can be handled easily and shipped over long distancesrelatively inexpensively. Other forms of solid biomass (e.g. wood chips, waste wood,firewood and agricultural residues) are also traded in sometimes significant quantities.Indeed, several NREAPs explicitly anticipate a heavy dependence on imports. 21It is essential that we manage global forest resources sustainably. Forests are a strongally against climate change, as well as home to 90 per cent of terrestrial biodiversity,and a resource upon which more than one billion people depend for their livelihoods. 22 Inlight of the multiple demands made on forest resources, including increased demand forbioenergy from other countries as well as EU Member States, the figures presentedabove strongly suggest that the increased demand for forest biomass expected underthe current provisions of the RED and Member States NREAPs will be difficult to meetfrom sustainably managed forests.In addition to the impact of increased EU demand for biomass on sustainable forestmanagement and related biodiversity concerns, in the current policy framework the useof biomass for energy is wrongly considered ‘carbon neutral’ and thus encouraged. Infact, biomass for energy poses sustainability concerns for forests that can reduce anyGHG-emission benefits or even run against the objectives of EU environmental policy ingeneral and the climate objectives of the RED in particular.As woody biomass is expected to remain the most important biomass source by 2020,the report is focuses mainly on woody biomass. This report will not deal with other formsof biomassThe present paper seeks, in its first part, to clarify these problems. In doing so, itdiscusses the greenhouse gas (GHG) performance of biomass as a source of energy aswell as the detrimental effects of increased demand for biomass on forests. The secondpart focuses on the legal framework for biomass exploitation, producing evidence thatcurrent legislation is not capable of satisfactorily addressing environmental and socialconcerns and that the law places an obligation upon the Commission to take action. We21IEEP (2010), p. 17.World Bank, Biodiversity and forests at a glance , p. 2, available stsAtAGlance.pdf (accessed 07.04.2011).223

Woody Biomass for Energy: NGO Concerns and RecommendationsApril 2011conclude that, in a world of finite resources, demand cannot grow indefinitely but has tocome to terms with limited supply. This means that the extent to which biomass can helpmeet our energy needs must be limited to that which can be sustainably supplied, ratherthan driven by unregulated demand. This question, moreover, must be considered inlight of the multiple demands made on forest resources and careful assessment of howlimited forest resources can best be mobilized to address a broad range of developmentand environmental objectives, including climate. The EU should therefore first introducemore stringent and binding energy reduction and saving targets. A limited use ofbiomass can only be justified in the context of ever-increasing energy savings targets.Unfortunately, the recent Energy Efficiency Plan released by the European Commission 23is insufficient. 24 Second, a supply-led biomass policy would only permit biomass to beused for energy where it can be used most efficiently. Currently, however, there seem tobe no clear plans, either at EU or Member State level, to limit biomass use to where it ismost efficient. If the Commission would start working from a supply-led approach, thiswould help significantly to bring some policy coherence in all the different pieces ofregulation and legislation that are currently influencing the biomass debate. This policycoherence is urgently needed. Finally, we propose GHG criteria for biomass, to ensurethat EU biomass policies are consistent with, and not counterproductive towards, EUclimate mitigation objectives.2. EU Biomass Policy in relation to Sustainable Supplies of,and Demand for, Forest ResourcesIt is apparent that current EU biomass policy is demand-led. That is, it suggests thatbiomass can provide a ‘renewable’ source of energy for the EU without any regard forthe plain fact that supplies of sustainable forest resources—and also, of course, suppliesof unsustainable forest resources—are limited. Accordingly, we argue that a sustainablebiomass policy should be supply- rather than demand-led.2.1Biomass: a sustainable source of energy?While National Renewable Energy Action Plans indicate that woody biomass will beheavily relied on to meet Member States’ renewable energy targets, reliable dataregarding how much woody biomass can be sustainably supplied is hard to come by.However, we do know that, even without the increased demands placed on forestresources by policies encouraging the use of biomass for energy, there are already manyother competing demands, in terms of both industrial uses and ecosystem services, onlimited forest resources. A biomass policy developed in accordance with the23Communication from the Commission to the European Parliament, the Council, the EuropeanEconomic and Social Committee and the Committee of the Regions Energy Efficiency Plan 2011 ,COM(2011) 109 final.24European Environmental Bureau, Press release, Little direction and no action on energy efficiency ,08.03.2011.4

Woody Biomass for Energy: NGO Concerns and RecommendationsApril 2011precautionary principle would not introduce additional significant demands on forestswithout first ascertaining whether and how existing and additional demands can besustainably supplied.2.1.1 NREAPs are an unreliable reference for estimating biomass supply, use,and impactsBy mid 2010, Member States had to submit their NREAPs, to provide clarity regardingexpected supply and use of renewable energy, including bioenergy, by 2020. MemberStates also had to highlight how they would ‘develop existing biomass resources andmobilise new biomass resources for different uses.’ 25It should be questioned, however, whether these plans provide reliable data to assessthe anticipated consequences associated with meeting the EU renewable energy targets.First, the plans are based on statistics of varying quality concerning the quantity of solidbiomass. Second, there seem to be problems with the conversion factors Member Stateshave used when converting between different units. Third, it is unclear how the NREAPswould be affected by policy changes (such as changes in subsidies or taxation) or byfluctuations in the prices of alternative fuels, competition for raw material, or otherfactors that could impact demand for energy or supplies of various fuels and theirfeedstock.Box 1: The lack of clear data on woody biomassThere are currently several data deficiencies which are interfering with the collectionof useful forest data at EU level. In addition, the collection, interpretation, andreporting of data still lack harmonisation in the EU, due to inconsistency indefinitions, scope, and focus in current forest monitoring.26Clear, up-to-date and reliable statistics on the production and use of wood in the EUare also difficult to come by. It is worth pointing out that the volumes of wood andco-products (residues) used for energy are much larger than previously believed, orregularly recorded, due to the limitations of information systems based purely ontrade statistics.27 Not all removals from forests are reported in these statistics. Tradestatistics are not able to cover informal trade (for example, wood use by privatehouseholds) or wood residues and waste recovery streams (for example, blackliquor). 28 However, these volumes can add up to significant numbers.25RED, Art. 4(1).Winkel G. et al., EU policy options for the protection of European forests against harmful impacts ,September 2009.27Steier F., Wood energy in Europe and North America: a new estimate of volumes and flows , January2007.28Mantau U. et al., Wood resources availability and demands – Part I: National and regional woodresources balances 2005 , Background paper to the UN-ECE/FAO workshop on wood balances, March2008.265

Woody Biomass for Energy: NGO Concerns and RecommendationsApril 2011In terms of mobilisation measures for woody biomass, several plans are weak and thereis not enough evidence to evaluate the potential impacts of increased use of forestryproducts for energy generation.29 It is also very difficult to estimate how much biomasswill be imported, and from which regions, as several of the NREAPs lack detailedinformation on these points. For further discussion of imports, see section 2.1.4.All this makes it impossible to draw firm conclusions from the NREAPs regarding thesupply, use and impacts of woody biomass.Box 2: Mobilisation measures in SwedenThe Swedish NREAP emphasises increased wood production throughout the wholeforest landscape. But the NREAP doesn’t mention any concrete plans for how thestate will stimulate this production, nor what the expected environmental impact willbe, nor how expected biodiversity losses will be compensated. The NREAP mentionsforest management operations that are already in use today (including stumpuprooting, fertilisation, re-ditching) and do not require any changes in the law, aswell as other operations that do require changes in the law (such as large-scaleplanting of fast growing exotic species). The NREAP also mentions additionalproposals for forest management methods which, if considered eligible, would requirechanges to existing laws. This could mean anything from introduction of GMOs tolarge-scale ditching projects.2.1.2 What NREAPs tell us about woody biomass supplyThe NREAPs indicate that bioenergy (for transport, electricity, heating and cooling) willremain the most important renewable energy source. It will contribute to more than 50per cent of renewable energy consumption in 2020 and to more than 10 per cent of totalfinal energy consumption in 2020. 30 Although biomass from woody sources, agricultureand fishery and waste are all expected to increase, woody biomass will remain the mostimportant biomass source. In relative terms, however, the biggest increase will comefrom the agricultural and fishery sector.Studies show that indirect supply (forest industry by-products such as sawdust and blackliquor) is, to a great extent, already being utilised. 31 The largest potential increase insupply of woody biomass can be found in (1) harvesting more stemwood in forestsavailable for wood supply, (2) harvesting a greater part of forest biomass, such asstumps, branches, and tops of trees already harvested, and (3) mobilising more postconsumer wood.3229IEEP (2010).European Commission Directorate-General for Energy, State of play of EU biomass policy and updateon biofuels policy. Presentation to Forestry & Cork Advisory Group, February 2011.31Södra, Sveaskog and Vattenfall (McKinsey), Biomass for heat and power: Opportunity and economics(Report commissioned by European Climate Foundation), 2010.32UNECE/FAO Timber Section, Hetsch S., Potential sustainable wood supply in Europe , October 2008.306

Woody Biomass for Energy: NGO Concerns and RecommendationsApril 2011The NREAPs confirm that the biggest increase of (domestic) woody biomass is expectedto come from direct supply (fellings, residues from fellings, landscape managementresidues and other). This means that direct pressure on forests in the EU and globallywill increase.Box 3: Intensification of the use of felling residues in Finland, withoutconsequences?In 2006, 24 per cent of the energy used in Finland was from renewable sources,mostly from woody biomass. 33 More than half of the woody biomass used for energyconsisted of black liquor and other by-products as well as waste products from theforestry industry.Finland’s goal is to produce 38 per cent of the energy it uses from renewable energysources by 2020. It intends to reach this target mainly by increasing the use of woodchips (logging residues such as branches and tree tops, stumps and roots, and smalldiameter stems especially from thinning of young stands and of timber) in heatingand power plants. The use of wood chips in heating and power plants would increasefrom about 5 million m 3 annually in 2009 to 13.5 million m 3 annually by 2020 34. Ontop of this, Finland wants to increase the use of wood chips and industry residues intransport fuel.Research 35 suggests that the lack of dead wood is the single most important reasonfor forest-dependent species to become endangered in Finland. If the amount of deadwood in managed forests decreases as a result of energy w

Increasing biomass demand increases threat to forest biodiversity 13! 2.2.3!The exception for biomass installations under one MW excludes a significant cumulative amount of forest biomass from sustainability criteria 15! 2.2.4!The need to reduce overall energy demand 16! 2.3! Current Biomass Policies are not Aligned with Sustainable Forest

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