Demand for timber in North Carolina is dominated by the traditional forest products industries: the pulp and paper industry utilizes pulpwood, and construction markets utilize saw timber.  These products are specified based on the size of the tree, with the smaller trees being used as pulpwood, larger trees used as chip-n-saw for composite panels, and the largest trees being used as saw timber.

Based on current forest products demand, pulpwood resembles the general species flexibility and physical properties acceptable for thermochemical biofuels production.  North Carolina currently has five pulp and paper mills using pulpwood as feedstock; four of these mills are located in the state’s coastal plains, and one is located in the mountains.

U.S. demand for paper and paper products has declined, and a worldwide shift in paper production has impacted North Carolina’s mills.  A number of machines have been idled, dismantled, and moved overseas.  In April 2009, Paper Age reported that U.S. paper and paperboard capacity edged down further in 2008, and cumulatively declined by 7.3% since its 2000 peak.  Additional increases in paper recycling have further reduced demand for virgin wood fibers as feedstock.

Also, North Carolina continues to build greater standing inventory of woody biomass growing stock.  Around the peak of timber demand for the construction and housing markets in 2006, nearly 45 million tons of wood were harvested in North Carolina for all markets, according to U.S. Forest Service 2006 FIA data.  Despite peak demand, North Carolina still increased its standing inventory in 2006 and grew nearly 54 million tons of timber – 20% more than was harvested.  Demand for forest products from the major market segments continues to decline across the board in North Carolina while supply increases, creating both a strong need and opportunity for biofuels development.

Upon evaluation, it is reasonable to conclude that new biofuels production capacity can be added across North Carolina without negatively impacting feedstock access and demand from existing pulp and paper operations.