By: Miguel Rodríguez Tejerina
Despite half of Bolivia being covered by forest, the forest sector represents only 1-2% of GDP. According to Supreme Decree 26075 of 2001, more than 40 million hectares are destined by the State for sustainable forest use, but currently only about 9 million hectares are being sustainably managed for wood production, mostly by private companies (5 million hectares) and indigenous and peasant communities. The rest is either not being used, or being exploited in an illegal and haphazard manner.
One of the main inputs for wood production is energy, mainly in the form of diesel oil. Many of the logging companies are located in regions without coverage of the national energy grid, and therefore need to produce their own energy with diesel, which is often acquired from black markets due to demand consistently surpasses supply. As mentioned in the groundbreaking article “With or without you: Should the international cooperation support reduction of deforestation in Bolivia?” subsidies for hydrocarbons in Bolivia represent a big burden to the national economy – USD 750 million in 2012 (68% for diesel), and an expected USD 1.000 million for 2013.
The huge and untapped potential of the forest sector in Bolivia and its high dependence on subsidized diesel are two contrasting realities occurring in parallel. Not only is the wood in any industrial facility embedded with the (fossil) energy that was required to extract it from the forest in the first place, but wood possesses in itself, useful energetic content that, under certain conditions, could replace the use of diesel for energetic purposes in the forest sector.
In Bolivia, the efficiency rates for wood production in the forest industry are around 50%. This means that for every cubic meter of wood that goes into an industrial sawmill, about half a cube comes out as finished product and half is scrapped. The waste product is usually burned, which not only emits carbon to the atmosphere, but has also caused severe damage to more than one logging company over the years.
The energetic potential of wood waste in a medium to large-scale wood production facility was estimated by PUMA Fondo Ambiental, with the assistance of German cooperation (project Energising Development – EnDev Bolivia). It turns out that the wood waste converted into energy can cover the demand of the entire facility, and there is even an energy surplus that, at least theoretically, could be redistributed for other users.
This could provide autonomy to the forest industries that are currently so dependent on diesel and its tax-payer financed subsidies, especially in an isolated grid. Savings in diesel would allow for a private company to repay the initial investment required for producing bioenergy in less than 5 years. Upfront capital costs could be also covered, at least partially, with subsidy savings generated in favor of the Government. And there would be a strong case for international cooperation to financially support the shift from the high dependence on subsidies of imported fossil fuels into a renewable energy-powered, sustainable forest sector. Diverting the spending on fossil fuels would also allow the Government to attend other urging needs in the look for social, economic and environmental welfare in Bolivia.