Table 3 Common characteristics of pellet mill wood procurement for three types of supply chains
Characteristic | Type 1—large mills sourcing a large proportion of feedstocks from pulpwood size roundwood | Type 2—medium to large mills linked to a sawmill providing a large proportion of total feedstock as secondary residuals | Type 3—smaller mills sourcing 100% of feedstock as secondary residuals |
|---|---|---|---|
Feedstock procurement | |||
 Contracts with large industrial forest ownerships for primary sourcing | A small portion (10–20%) of the supply | Contracts with large industrial forest ownerships for a significant (50–100%) portion of the supply of primary fiber | No contracts with large industrial forest ownerships |
 Reliance on wood dealers | Significant reliance on wood dealers to provide primary and secondary fiber | Insignificant reliance on wood dealers | Significant reliance on wood dealers |
 Sourcing of secondary residues | Sourcing secondary fiber from multiple sawmills and re-manufacturing facilities | Direct sourcing of secondary residues from a sawmill either owned by the same company or by a partner in joint venture | Supply chain is nearly entirely built around secondary fiber, sourcing from several sawmills and other wood product facilities, from a large area |
Risk assessment (RA) feature | |||
 Use of external consultants and publicly available data for risk assessment (RA) | RA usually completed by external consultants using publicly available data | RA usually completed by external consultants using publicly available data | RA usually completed by external consultants using publicly available data. |
 Level of integration | Commonly feature RAs directly integrated into procedures of primary fiber procurement and indirectly integrated into secondary fiber procurement | Commonly feature RAs directly integrated into primary fiber procurement | – |
 Standards used for RA | RA is done to standards of PEFC CS, FSC CW, and SBP | RA is done to standards of PEFC CS, FSC CW, and SBP | RA is done to standards of PEFC CS, FSC CW, and SBP |
 Coverage | RAs cover area from where primary fiber is sourced and attempt to cover sourcing area for other suppliers (i.e., sawmills providing secondary fiber) | RAs cover area from where primary fiber is sourced and attempt to cover sourcing area for other suppliers (i.e., sawmills providing secondary fiber) | RAs attempt to cover sourcing area for all suppliers (i.e., sawmills providing secondary fiber) |
Risk mitigation | |||
 General picture | Considerable variation among mills, use of several measures | Comprehensive use of risk mitigation through certification | Limited risk mitigation |
 Avoidance of risk identified in RAs | Yes, for primary fiber | Yes, for primary fiber | RAs encompass geographic area of secondary residual suppliers or RAs not conducted |
 Sourcing from FM-certified forests | Yes, for primary fiber. Sourcing mainly from certified industrial forests vs. uncertified non-industrial forests | Yes, for primary fiber. Sourcing mainly from certified industrial forests vs. uncertified non-industrial forests | Very limited sourcing of primary fiber |
 Inspecting a portion of harvest by pellet mill staff | Yes, for primary fiber | Yes, for primary fiber | – |
 Inspecting via questionnaires and/or site visits a portion (10–100%) of residual supplier records and sourcing practices | Yes | Yes | – |
 Use of quota systems limiting the amount of non-FM-certified fiber | Yes, for primary fiber. Use of quota system to encourage fiber from certified forests | – | – |
 Use of independently managed group certification programs | Yes. Including offering to certify the landowners supplying roundwood to sawmills providing pellet mill residuals | Yes. Including offering to certify the landowners supplying roundwood to sawmills providing pellet mills residuals | – |
 Use of supply volume-based agreements that include feedstock sourcing specifications | Yes, for primary fiber. Some instances where contracts with sawmills are cited as evidence of risk mitigation | Yes, for primary fiber. Some instances where contracts with sawmills are cited as evidence of risk mitigation | – |
 CoC, including PEFC CS and FSC CW | Yes, for primary fiber | Yes, for primary fiber | One company with a number of pellet mills of supply chain type 3 reportedly requires that suppliers of secondary fiber use PEFC CS and FSC CW certifications |
 RA with suppliers | Yes, for primary fiber. RAs with suppliers (e.g., wood dealers and wood residual suppliers) | Yes, for primary fiber. RAs with suppliers (e.g., wood dealers and wood residual suppliers) | Yes, some companies extend their RAs to the supply-base of all residual suppliers |
 Use of trained loggers | Yes, for primary fiber | Yes, for primary fiber | – |