Daily CSR
Daily CSR

Daily CSR
Daily news about corporate social responsibility, ethics and sustainability

Wood-Based Products on the Rise and Environmental Solutions Growing


Wood-Based Products on the Rise and Environmental Solutions Growing
The demand for Rayonier's forestlands as a platform for various land-based solutions is on the rise, attracting interest from potential partners. We are committing significant resources to further develop these opportunities. As we assess these avenues for value creation, we are actively collaborating with business developers and local communities to establish protective measures and advocate for sustainable forestry and environmental stewardship.
These land-based solutions generally fall into several categories:
Diversified Land Use: There is an increasing need for land suitable for alternative energy solutions like solar and wind farms, as well as carbon capture and storage (CCS) projects. Our extensive land holdings, particularly in the U.S. South, offer significant acreage suitable for these higher-value purposes. We are actively pursuing multiple projects in this domain, often through long-term lease or licensing arrangements with partners. We believe responsible land use is integral to addressing the climate crisis, and we are excited to be at the forefront of this initiative.

Recent activities include:
Solar Development: In 2022, we successfully executed our first solar lease project in Polk County, Texas. The 600 acres leased are part of a larger 2,800-acre project, set to generate 200 megawatts of clean energy, equivalent to powering over 30,000 homes and reducing CO2 emissions by about 250,000 metric tons annually. Moreover, numerous solar developers have expressed interest in our land, with approximately 26,000 acres of our U.S. South holdings already under active agreements or options for potential solar development by the end of 2022.
Carbon Capture and Storage (CCS)
In early 2023, we initiated our first CCS lease, marking our entry into CCS technologies that enable the secure storage of carbon dioxide captured from industrial sources like power plants. This captured carbon is safely stored in natural geologic formations deep underground, with minimal impact on our timber operations, non-timber income, and other land-based solutions ventures.
Carbon Markets
In recent years, forest carbon offset markets have garnered substantial attention. Our experience in this realm has been significantly shaped by our New Zealand Timber segment. New Zealand operates a regulated carbon offset market known as the New Zealand Emissions Trading Scheme. In this system, registered forests established after 1989 generate carbon credits, or New Zealand Units (NZUs), as the forest matures. A portion of these NZUs are retired upon forest harvest. We currently hold an inventory of 1.6 million unencumbered NZUs, which we plan to sell periodically on the open market. In 2022, our NZU carbon credit sales amounted to $20 million.
In contrast to New Zealand, the U.S. lacks a regulated carbon credit market and relies on voluntary markets. The voluntary carbon market is anticipated to grow significantly in the years to come, driven by corporate net-zero commitments and the need for carbon offsets to fulfill these commitments. Given the current high cost and limited scalability of technology-based removals like direct air capture, we believe that land-based removals/offsets will play a pivotal role in the transition to a low-carbon economy.
Most U.S. forestry carbon offset projects adhere to Improved Forest Management (IFM) standards, altering timberland management to generate additional carbon benefits. This may involve prolonging rotation lengths, cultivating different tree species, or implementing land management changes. Carbon credits can also be generated through afforestation projects, which convert land previously used for purposes like farming or grazing into forests. Afforestation projects are considered to have superior carbon additionality and generally command higher values in carbon credit markets. Rayonier is actively engaged in both IFM and afforestation carbon credit projects in the U.S.
Fiber for Bioenergy/Biofuels
Bioenergy and biofuels are set to assume a growing role in industries striving to adopt lower-carbon energy sources. Consequently, we are witnessing increasing interest from potential partners seeking to secure fiber for the production of bioenergy and biofuels.
For instance, there are ongoing considerations for bioenergy with carbon capture and storage (BECCS) facilities in the U.S. South. These facilities utilize woody biomass for energy production while capturing and storing emitted carbon, resulting in a carbon-negative cycle. Such facilities are anticipated to drive heightened demand for wood fiber within their sourcing radius.
Furthermore, there is substantial demand for woody biomass in the production of sustainable aviation fuels (SAF). Air travel is a significant contributor to greenhouse gas emissions, and SAF blended with conventional jet fuel can help reduce emissions. The demand for SAF is expected to surge in the coming years, as major airlines commit to using increasing proportions of SAF in their operations.
While some of these opportunities are still in the early stages of development, they reflect the growing potential and competition for wood fiber due to the positive environmental attributes of timberlands.
The Rising Utilization of Wood-Based Products
As we transition toward a low-carbon economy, we foresee a surge in the demand for wood-based construction materials and packaging. Comprehensive life cycle assessments have underscored the advantages of using wood-based building products, notably their ability to store carbon, resulting in fewer greenhouse gas emissions during construction and use compared to materials like concrete and steel.

Looking ahead, we hold an optimistic outlook on the continued expansion of wood-based construction, driven by the increased adoption of lumber and engineered wood products, including mass timber. Specifically, we anticipate heightened demand for cross-laminated timber (CLT), a specific type of mass timber, particularly in the commercial construction sector. Additionally, wood-based packaging is expected to gain popularity as an environmentally sound alternative to single-use plastics.
Environmental Conservation
With the growing emphasis on environmental and biodiversity preservation, we anticipate an increase in opportunities for Rayonier to offer solutions in this realm, such as conservation easements and mitigation banking. We are actively providing conservation easement solutions and vigilantly exploring options to contribute to biodiversity preservation in the future. In this regard, we are assessing opportunities to enhance biodiversity within our land base through sustainable forestry practices.