Projecting investment potential of an emerging forest bioeconomy market: An EU—Australian benchmarking study

In emerging markets, investment costs tend to be associated with uncertainty, especially if the investment is policy driven. Globally, nations have agreed to reduce greenhouse gas emissions to keep the temperature increase below 1.5°C by 2100. Australia faces challenges in achieving its Paris Agreement Nationally Determined Contributions and Agenda 2030 commitments, mostly given the extraction profile of its economy. Introducing renewable carbon from forest residues in the niche markets could increase the competitiveness of the forest industry not only in terms of reduced energy costs but also in terms of ‘greening’ the primary product. Growing interest in the bioenergy market, linked with large volumes of available biomass feedstocks including forest residues, presents opportunities in Australia. Yet, ambiguity about costs and concerns about biomass supply throttle the investment potential. This paper aims to estimate a range of forest residue costs along the supply chain for the Australian market by projecting the biomass supply costs from a mature bioenergy market onto it using a benchmarking process reinforced by expert opinion. A three-round Delphi method in which experts indicated direction and range of costs along the forest biomass supply chain revealed that roadside costs of forest residues (other than stumps), and biomass transportation costs, are lower than or equal to and equal to or higher than, the EU costs respectively. Experts ranked investment and supply-side support as priority areas for the development of forest bioenergy in Australia. The expert estimations of forest residue cost ranges along the supply chain offer the first layer for framing a national policy for forest bioenergy within the broader bioeconomy.