This discussion paper describes the activities, methods and outcomes of a project, which identifies policy and market scenarios with major impacts on the European forest sector. It is based on an intensive literature search and an inquiry addressed to major stakeholder groups in the forest sector. Based on these inputs the study develops major scenarios in qualitative terms. It identifies quantitative links between the policy and market scenarios and the steering parameters of outlook modelling for forest resources and forest products markets. The outlook models are described in separate discussion papers.