Climate Change Mitigation vs. Renewable Energy Consumption and Biomass Demand

The land use, land-use change, and forestry (LULUCF) sector plays a crucial role in climate change mitigation; therefore, it is included in national and international climate change policies. However, renewable energy and bioeconomy development increase the demand for biomass for energy and material needs and challenge greenhouse gas (GHG) removal in LULUCF. Therefore, this study aims to analyze whether climate change mitigation and bioeconomy goals are compatible from an LULUCF perspective at the EU level. This study mainly covers the 2000–2020 period, looking at decoupling trends and LULUCF removal as well as estimating the substitution effect, which enables a broader view of the LULUCF GHG removal potential. The results reveal that decoupling is taking place at the EU level regarding economic growth and GHG, with a steady increase in renewables. The share of biomass in renewables is increasing at a slower pace, and the reduction in LULUCF GHG removal is proportionally lower compared to the pace of wood being harvested from forest land at the EU level. Still, biomass demand raises the pressure for LULUCF GHG removal, considering the sector itself is highly uncertain. Despite this, some possibilities to align climate and bioeconomy goals could remain, especially if the substitution effect is considered. Based on historical data, the estimated substitution effect is even higher (−367 mill. t CO 2 eq. on average in 2000–2020) than the sector’s removal (−300 mill. t CO 2 eq. on average in 2000–2020) and is dominated by material substitution (61%). Hence, LULUCF contributes to a reduction in GHG in other sectors, but it is still seldom acknowledged and not accounted for.