Finland is at the vanguard of bioenergy production – the forest industry generates about 80 % of Finland’s bioenergy

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The Finnish forest industry has invested heavily in bioenergy, energy-efficiency and energy conservation. These measures have helped to keep the sector’s CO2 emissions at target levels even though paper production has increased by more than 40% since 1990.

Finland is the EU’s clear leader in wood energy use

About a fifth of Finland’s energy is generated from wood. This is five times the EU average and places Finland at the clear lead of industrialised countries in the energy use of wood.

The forest industry is the largest producer of wood energy and bioenergy in Finland and accounts for about 80% of the bioenergy production and consumption in the country. Some 40% of the wood raw materials received by the industry’s production facilities are used to generate energy in different process phases, which makes the production and consumption of bioenergy a fundamental operating requirement for the forest industry.

A moderate, long-term energy policy promotes the production of bioenergy because large volumes of output automatically translate into large bioenergy production volumes. Obligation-based, overlapping bioenergy subsidy systems can easily lead to an increase in the price of wood, making raw material supply for the forest industry more difficult.

Forest residues are the most rapidly growing form of wood energy and account for about 3% of the wood energy consumed in Finland. In 2004, 2.7 million cubic metres of forest residues were used, over a quarter more than in the previous year. A goal of Finland’s National Forest Programme is to increase the annual use of forest residues to 5 million cubic metres by 2010.

Reaching this goal is a major challenge. The forest industry can do it, however, if forest residue production is combined efficiently with the procurement of industrial roundwood. Supporting the development of forest energy harvesting and transport technologies is commendable because this does not transfer subsidies into the fuel markets. Forest residues are collected from felling residues (such as branches and tops), thinnings and tree stumps.

The use of wood for processing should be a priority – after recycling, end products can be utilised in energy generation

The Finnish forest industry supports the target of increasing the use of renewable energy sources, such as bioenergy, provided that, there is a secure supply of timber raw material at the same time. Wood processing creates employment and generates far more income than using wood for energy, which is why burning raw-material-grade timber is not socially justifiable.

Using carbon-dioxide-neutral wood, the forest industry’s raw material, for fuel has begun to interest the energy sector more and more because of emissions trading. However, Finnish commercial forests are already in almost full utilisation and imported wood is essential for a continuous supply of raw material. For these reasons, the availability of raw material and using wood for energy must be brought into harmony, removing negative effects to the national economy.

The high price for emission allowances enables the energy sector to pay more for wood, and the situation may distort the market and provide an incentive to burn wood that would otherwise be usable as a raw material. Burning raw-material-grade wood has negative consequences on employment and reduces the income generated from wood.

The availability of raw material for the forest industry should be secured by providing subsidies intended to promote the use of wood-based fuels only to wood materials that are not suitable for raw material use. The forest industry’s products are suitable for the generation of energy at the end of their lifespan and will continue to be so.