Developing a forestry sector model for Italy: Material flow, economic impacts, and related carbon sequestration and energy substitution effects

The transition toward a circular and climate-neutral bioeconomy requires a comprehensive understanding of how forest resources, industrial transformation, trade dynamics, and carbon accounting interact within national forest-wood value chains. While forest ecosystems are widely recognized as carbon sinks, the mitigation potential of harvested wood products (HWP), cascading use, and recycling remains insufficiently integrated into policy assessments, particularly in trade-dependent economies such as Italy. This thesis develops an integrated analytical framework centered on the Italian Lumber Exchange (ILEX) model to evaluate material and carbon flows across Italy’s forest-wood value chain. The research is structured in three stages: a systematic literature review of Material Flow Analysis (MFA) applications, the development of a comprehensive static MFA model for 2018, and its extension through dynamic MFA and Dynamic Stock Modelling (DSM) to assess carbon dynamics over time. The literature review highlights key limitations in existing studies, including methodological fragmentation, inconsistent assumptions, and limited product-level resolution, underscoring the need for harmonized approaches capable of capturing the complexity of modern bioeconomy systems. Building on this, the ILEX model provides a consistent system-level representation of Italy’s forest-wood flows, integrating national statistics, trade data, and sectoral information. Results show that total wood inputs amount to 17.26 Mm³, with a strong dominance of fuelwood and a high dependence on imports for industrial uses, while recycling plays a structurally significant role in panels and paper sectors. The dynamic MFA and DSM extension (2000–2023) reveals that carbon outcomes are driven more by trade structures, product lifetimes, and accounting frameworks than by harvest volumes alone. Under the Production plus Net Import Approach (PNIA), carbon stocks are substantially higher than under the Production Approach (PA), highlighting the role of imports in shaping mitigation outcomes. Overall, the thesis demonstrates that carbon performance depends on allocation patterns, recycling efficiency, and product longevity, rather than resource availability alone, and provides a harmonized modelling framework to support evidence-based policy in the forest-based bioeconomy.