Impact of peat tax and the energy use of wood must be monitored carefully

Press releases |

"More wood needs to enter the market so that there’ll be enough to supply both manufacturers and energy producers,” Timo Jaatinen, Director General of the Finnish Forest Industries Federation, said at a seminar held in Jyväskylä on 15 March.

“Finland has decided to promote the energy utilisation of wood with quite a few overlapping measures. Subsidies come out of State coffers, when more urgent uses could easily be identified in the post-recession economy,” Jaatinen pointed out.

The forest industry has urged the Government to create a mechanism to monitor how subsidies and taxes affect the timber market. 

“Subsidies can distort the functioning of the timber market and raise the price of industrial wood. This jeopardises the raw material supply of the wood processing industry and weakens its competitiveness. At the same time, it leads to a reduction in the forest industry’s renewable energy production, which can prompt spiralling subsidies that call for more tax money to be spent. 

Each type of wood should be steered into the use that makes most sense economically. Forest energy should be generated by burning wood that would otherwise be left to rot in the forest because it is unsuitable for use in the manufacture of products. It is not prudent – from the point of view of the national economy or the carbon cycle – to burn processable wood.

Fossil fuels must be replaced by renewable energy to slow global warming. The forest industry generates 70% of Finland’s renewable energy in conjunction with its production processes. The forest-based sector is strongly committed to doing its part in the national effort to increase the share of renewable energy to 38%. 

More wood than enters the market at present must be acquired to supply future efforts to increase the share of wood-based energy. There is no reason not to increase the forest utilisation rate because the growth of Finnish forest resources is constantly outpacing their exploitation. However, concrete action is required to improve the availability of wood.

Economic incentives are needed to encourage and steer forest owners towards proactive forestry practices. Increasing the average size of forest estates should also be adopted as a target because this would improve the profitability of forestry as a livelihood.

Further information:
Timo Jaatinen, Director General, Finnish Forest Industries Federation, tel. +358 9 132 6600