IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2023i8p3473-d1124424.html
   My bibliography  Save this article

Data-Driven Internal Carbon Pricing Mechanism for Improving Wood Procurement in Integrated Energy and Material Production

Author

Listed:
  • Teijo Palander

    (Faculty of Science, Forestry and Technology, University of Eastern Finland, P.O. Box 111, FI-80101 Joensuu, Finland)

Abstract

More than 25% of the total energy consumption in Finland has been produced with wood fuels. Since 2012, the share has been greater than that of oil, coal, or natural gas. Internal carbon pricing is used to manage the risks in wood procurement after wood import from Russia ended. Further, the EU announced plans to sell more carbon emission permits to fund the EU’s exit from Russian energy. To manage these challenges, a data-driven internal carbon pricing mechanism (DDICPM) has been developed for wood procurement optimization. Particularly, local changes are considered via available information about growth-based carbon sinks (GBCS). The results of the new scenario were compared to the basic national scenario that ensures carbon neutrality in forestry. The DDICPM may provide the optimum wood-procurement operations maintaining carbon neutrality in the integrated energy and material industry (IEMI). In this study, the use of DDICPM increased profitability b 16.2, 16.1, and 16.0% between adapted wood procurement areas at the EU’s emission allowance prices of 30, 65, and 98 € t −1 CO 2 . The experiments’ results also revealed that the DDICPM could consistently and significantly outperform the conventional solution adopted by the company in terms of economic costs. A significant conclusion is that an increase in profitability is possible if the size of wood procurement areas is allowed to vary optimally with respect to transport distance to take advantage of the GBCS as a new application of the renewable carbon sink.

Suggested Citation

  • Teijo Palander, 2023. "Data-Driven Internal Carbon Pricing Mechanism for Improving Wood Procurement in Integrated Energy and Material Production," Energies, MDPI, vol. 16(8), pages 1-10, April.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:8:p:3473-:d:1124424
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/8/3473/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/16/8/3473/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bento, Nuno & Gianfrate, Gianfranco, 2020. "Determinants of internal carbon pricing," Energy Policy, Elsevier, vol. 143(C).
    2. Thollander, Patrik & Mardan, Nawzad & Karlsson, Magnus, 2009. "Optimization as investment decision support in a Swedish medium-sized iron foundry - A move beyond traditional energy auditing," Applied Energy, Elsevier, vol. 86(4), pages 433-440, April.
    3. Teijo Palander & Hanna Haavikko & Emma Kortelainen & Kalle Kärhä, 2020. "Comparison of Energy Efficiency Indicators of Road Transportation for Modeling Environmental Sustainability in “Green” Circular Industry," Sustainability, MDPI, vol. 12(7), pages 1-22, March.
    4. Palander, Teijo & Haavikko, Hanna & Kärhä, Kalle, 2018. "Towards sustainable wood procurement in forest industry – The energy efficiency of larger and heavier vehicles in Finland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 96(C), pages 100-118.
    5. Teijo Palander & Jari Takkinen, 2021. "The Optimum Wood Procurement Scenario and Its Dynamic Management for Integrated Energy and Material Production in Carbon-Neutral Forest Industry," Energies, MDPI, vol. 14(15), pages 1-19, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Teijo Palander & Jari Takkinen, 2021. "The Optimum Wood Procurement Scenario and Its Dynamic Management for Integrated Energy and Material Production in Carbon-Neutral Forest Industry," Energies, MDPI, vol. 14(15), pages 1-19, July.
    2. Baburam Rijal & Luc LeBel & Shuva H. Gautam & Pierre Cantegril, 2020. "A Sequential Optimization Approach in Tactical Planning for Value Creation in the Forest Products Industry," Sustainability, MDPI, vol. 12(12), pages 1-23, June.
    3. Teijo Palander & Stelian Alexandru Borz & Kalle Kärhä, 2021. "Impacts of Road Infrastructure on the Environmental Efficiency of High Capacity Transportation in Harvesting of Renewable Wood Energy," Energies, MDPI, vol. 14(2), pages 1-20, January.
    4. Streckiene, Giedre & Martinaitis, Vytautas & Andersen, Anders N. & Katz, Jonas, 2009. "Feasibility of CHP-plants with thermal stores in the German spot market," Applied Energy, Elsevier, vol. 86(11), pages 2308-2316, November.
    5. Venter, Philip van Zyl & Terblanche, Stephanus Esias & van Eldik, Martin, 2018. "Turbine investment optimisation for energy recovery plants by utilising historic steam flow profiles," Energy, Elsevier, vol. 155(C), pages 668-677.
    6. Elena Stefana & Paola Cocca & Filippo Marciano & Diana Rossi & Giuseppe Tomasoni, 2019. "A Review of Energy and Environmental Management Practices in Cast Iron Foundries to Increase Sustainability," Sustainability, MDPI, vol. 11(24), pages 1-18, December.
    7. Gorbach, O.G. & Kost, C. & Pickett, C., 2022. "Review of internal carbon pricing and the development of a decision process for the identification of promising Internal Pricing Methods for an Organisation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    8. Li, Xin & Li, Zheng & Su, Chi-Wei & Umar, Muhammad & Shao, Xuefeng, 2022. "Exploring the asymmetric impact of economic policy uncertainty on China's carbon emissions trading market price: Do different types of uncertainty matter?," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    9. Zola Berger‐Schmitz & Douglas George & Cameron Hindal & Richard Perkins & Maria Travaille, 2023. "What explains firms' net zero adoption, strategy and response?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5583-5601, December.
    10. Rocsana Bucea-Manea-Țoniș & Oliva Maria Dourado Martins & Dragan Ilic & Mădălina Belous & Radu Bucea-Manea-Țoniș & Cezar Braicu & Violeta-Elena Simion, 2020. "Green and Sustainable Public Procurement—An Instrument for Nudging Consumer Behavior. A Case Study on Romanian Green Public Agriculture across Different Sectors of Activity," Sustainability, MDPI, vol. 13(1), pages 1-25, December.
    11. Fernandez Vazquez, Carlos A.A. & Vansighen, Thomas & Fernandez Fuentes, Miguel H. & Quoilin, Sylvain, 2024. "Energy transition implications for Bolivia. Long-term modelling with short-term assessment of future scenarios," Renewable and Sustainable Energy Reviews, Elsevier, vol. 189(PB).
    12. Oliver Gregor Gorbach & Noha Saad Hussein & Jessica Thomsen, 2021. "Impact of Internal Carbon Prices on the Energy System of an Organisation’s Facilities in Germany, Japan and the United Kingdom Compared to Potential External Carbon Prices," Energies, MDPI, vol. 14(14), pages 1-41, July.
    13. Jihad C. Elnaboulsi & Wassim Daher & Yiğit Sağlam, 2023. "Environmental taxation, information precision, and information sharing," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(2), pages 301-341, April.
    14. Weng, Zhixiong & Liu, Tingting & Wu, Yufeng & Cheng, Cuiyun, 2022. "Air quality improvement effect and future contributions of carbon trading pilot programs in China," Energy Policy, Elsevier, vol. 170(C).
    15. Li, Yingjian & Li, Jiezhi & Qiu, Qi & Xu, Yafei, 2010. "Energy auditing and energy conservation potential for glass works," Applied Energy, Elsevier, vol. 87(8), pages 2438-2446, August.
    16. Porzio, Giacomo Filippo & Nastasi, Gianluca & Colla, Valentina & Vannucci, Marco & Branca, Teresa Annunziata, 2014. "Comparison of multi-objective optimization techniques applied to off-gas management within an integrated steelwork," Applied Energy, Elsevier, vol. 136(C), pages 1085-1097.
    17. Giacone, E. & Mancò, S., 2012. "Energy efficiency measurement in industrial processes," Energy, Elsevier, vol. 38(1), pages 331-345.
    18. Riedel, Franziska & Gorbach, Gregor & Kost, Christoph, 2021. "Barriers to internal carbon pricing in German companies," Energy Policy, Elsevier, vol. 159(C).
    19. Maximilian Hettler & Lorenz Graf‐Vlachy, 2024. "Corporate scope 3 carbon emission reporting as an enabler of supply chain decarbonization: A systematic review and comprehensive research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 263-282, February.
    20. Teijo Palander, 2023. "Modeling Techno-Economic Wood Procurement from Renewable Forests for the Sustainable Energy Supply of a CHP Plant," Sustainability, MDPI, vol. 16(1), pages 1-21, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:16:y:2023:i:8:p:3473-:d:1124424. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.