The export of wood pellets from the southeastern United States (USA) has grown significantly in recent years, following rising demand from Europe. Increased wood pellet demand could lead to spatially variable changes in timberland management and area in the USA. This study presents an assessment of the impacts of increasing wood pellet demand (an additional 11.6 Mt by 2030) on land‐use dynamics, taking into account developments in other wood product markets as well as expected changes in other land uses. An economic model for the forest sector of the southeastern USA (SRTS) was linked to a land‐use change model (PLUC) to identify potential locations of land‐use change following scenarios of demand for pellets and other wood products. Projections show that in the absence of additional demand for wood pellets, natural timberland area is projected to decline by 450–15 000 km2 by 2030, mainly through urbanization and pine plantation establishment. Under the high wood pellet demand scenario, more (2000–7500 km2) natural timberland area is retained and more (8000–20 000 km2) pine plantation is established. Shifts from natural timberland to pine plantation occur predominantly in the Atlantic coastal region. Future work will assess the impact of projected transitions in natural timberland and pine plantations on biodiversity and carbon storage. This modeling framework can be applied for multiple scenarios and land‐use projections to identify locations of timberland area changes for the whole southeastern USA, thereby informing the debate about potential impacts of wood pellet demand on land‐use dynamics and environmental services. © 2017 The Authors. Biofuels, Bioproducts and Biorefining published by Society of Chemical Industry and John Wiley & Sons, Ltd.

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Bioenergy is a significant source of renewable energy in the U.S. and internationally. We explore whether creation of localized bioenergy markets near existing military installations in the southeastern U.S. could simultaneously address military renewable energy generation objectives while reducing urban encroachment. We model the use of public-private partnerships to stimulate the creation of these markets, in which stable installation demand is paired with stable supply from surrounding landowners. We employ two economic modelsthe SubRegional Timber Supply (SRTS) model and the Forest and Agricultural Sector Model with Greenhouse Gases (FASOMGHG)to assess how markets influence forest and agriculture land use, renewable energy production, and greenhouse gas (GHG) mitigation at the regional and national levels. When all selected installations increase bioenergy capacity simultaneously, we find increased preservation of forest land area, increased forest carbon storage in the region, and increased renewable energy generation at military installations. Nationally, however, carbon stocks are depleted as harvests increase, increasing GHG emissions even after accounting for potential displaced emissions from coal-or natural gas-fired generation. Increasing bioenergy generation on a single installation within the Southeast has very different effects on forest area and composition, yielding greater standing timber volume and higher forest carbon stock. In addition to demonstrating the benefits of linking two partial equilibrium models of varying solution technique, sectoral scope, and resource detail, results suggest that a tailored policy approach may be more effective in meeting local encroachment reduction and renewable energy generation objectives while avoiding negative GHG mitigation consequences.