ORIGINAL RESEARCH article
Front. For. Glob. Change
Sec. Forest Management
This article is part of the Research TopicForest Hazard Mitigation and Ecosystem Function Restoration in the Era of Climate Crisis: Safeguarding Ecological Integrity for Sustainable Forest ManagementView all 3 articles
Assessing the economic feasibility of integrating wood processing and energy generation in forest management: A case study from a forestry-centric district in temperate South Korea
Provisionally accepted
Soonjin So1
Chang-Bae Lee2*- 1Korea Forestry Promotion Institute, Gangseo-gu, Republic of Korea
- 2Kookmin University, Seoul, Republic of Korea
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Climate change necessitates urgent action across all sectors, including forestry, which remains underdeveloped in some countries—especially South Korea, where the carbon sequestration capacity of forests is declining due to tree aging. To address this challenge, a circular forest management system is crucial for promoting wood utilization and regeneration with climate-resilient species. This study develops a regional-scale sustainable forest management model that integrates wood production, processing, and biomass energy generation, and evaluates its economic viability in Goesan-gun, a forestry-centric district in South Korea. Data from timber production and wood-related industries were used to quantify outputs across the supply chain, including roundwood, processed wood, and energy, and to calculate cash flows encompassing annual investment requirements and revenues. The analysis also incorporated carbon credits and renewable energy certificates, which have become essential market instruments in the context of climate change. Results showed that total wood production from the 22,900-hectare project area amounted to 2,265,235 m3 (approximately 56,631 m3 annually), which is 2.6 times higher than the national average. The overall economic assessment indicates positive feasibility, with a net present value (NPV) of US$25.3 million, an internal rate of return (IRR) of 13.1%, and a benefit–cost ratio (BCR) of 1.17, considering carbon credits and renewable energy incentives. However, the wood processing sector alone was not economically feasible (NPV: −US$1.9 million; IRR: 1.1%), indicating a potential disconnect in the supply chain. These results indicate that forestry investment can be economically viable, but integrated governance is required to bridge sectoral financial gaps and sustain a regional-level forestry value chain.
Keywords: Climate Change, Forest biomass energy, integrated forestry supply chain, sustainable forest management, voluntary carbon markets
Received: 12 Aug 2025; Accepted: 12 Dec 2025.
Copyright: © 2025 So and Lee. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Chang-Bae Lee
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