Costs of Meeting the EU’s LULUCF Target through Restricting Roundwood Harvests

The European Union (EU) has a target for greenhouse gas emissions and removals from land use, land-use change, and forestry in 2030. Within the time frame to 2030, reducing roundwood harvests in managed forests appears to be the only measure capable of substantially increasing forest carbon sinks. The resulting reduction in global net emissions would be considerably smaller than the increase in the EU forest sink because lower harvest levels in the EU are partly offset by increased production elsewhere, and the climate benefits associated with harvested wood products decline. This study assesses the economic costs faced by the EU and its Member States if the latter restrict harvests to meet their targets. Two alternative background settings for policy implementation are considered: one with market-driven harvests and the other with stagnating EU harvests. Under the assumptions made, a comparison of the economic value generated by the forest sector with and without harvest constraints suggests that France, Germany, Finland, Poland, and Sweden would face the highest costs, amounting to several billion euros over the period of 2026–2035. A few EU countries would gain modestly. Outside the EU, the United States, Canada, Brazil, and Russia are the largest economic beneficiaries. The estimated costs vary across Member States, while at the EU level, they are € 1000 per tCO₂ or more during 2030–2035 when accounting for the direct and indirect effects related to forest sector production. In addition, there would be induced effects on the rest of the economy.