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As the demand for wood pellets has increased in EU member states, so has a multi-pronged examination of the environmental effects of establishing a transatlantic trade in wood pellets between the U.S. and Europe. However, the nature of industrial wood pellet supply chains is poorly understood or little known. This work aimed to understand the feedstock sourcing strategies being used by the wood pellet industry in the southeast U.S., commonly applied approaches to documenting sustainability of these feedstocks, and drivers operating behind related developments. This study used structured interviews of sustainability managers and procurement staff at pellet mills comprising 75% of the U.S. industrial pellet sector. The industry was classified into types of supply chains, based on the role of loggers, wood dealers, sawmills, and other wood product facilities in the supply chains. Additional classifications examined feedstock types and origins, number and type of suppliers, contractual relationships with suppliers, applied procurement systems, risk assessment and due-diligence methodologies, risk mitigation procedures, and supply chain certifications. Three main types of supply chains were identified within the U.S. industrial pellet sector, differentiated based on features of feedstock procurement, risk assessment procedures, and risk management. The study observed a slight shift toward using a higher proportion of wood residuals as feedstock in some of the larger pellet mills. Policy requirements, customer orders, and external pressures were driving the sector’s adoption of sustainability programs, with risk assessments and wood procurement procedures aligned to policy requirements. The strength of a risk-based approach to sustainability documentation depends on the quality of source data on risks within a sourcing area, scale of analysis, and integration of risk assessments into procurement practices. Some risk categories are more difficult to assess and control. Challenges increase with increasing number and diversity of supply chain actors and depend on the nature of agreements between these entities for the conveyance of feedstocks to pellet mills. Fiber procurement is similar to pulpwood-using industries, but extending the risk assessment to residuals is complicated and challenging to the sector. The study identified a number of strategies in use within pellet mill supply chains for dealing with these challenges.

Assessing the wood sourcing practices of the U.S. industrial wood pellet industry supplying European energy demand