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Finland has extensive biomass resources, such as forest, peat, and agro-based biomass. Forests cover 87 percent of the total land area in Finland. Since Finland has no indigenous reserves of fossil fuels, energy management has strongly been based on wood far longer than other industrialised countries. As a matter of fact, wood energy amounts to 19 percent of overall energy consumption in 1997. About 45 percent of wood corresponding to four Mtoe were used for energy purposes in 199617. A considerable amount of useful wood is left in the forests. In addition to this, the rise of production in the wood-processing industry has increased the use of wood both as a raw material and as a fuel.

The main sources of energy from the forest today are logging residues, collected in areas to be reforested and small silvi-cultural stands developed during forest reconditioning programmes. In Finland the wood-based fuels that can be readily utilised, sawmill by-products, are already being used so effectively that there is not really any more scope for growth in that area. However, the smaller-sized stemwood and logging residues that are left in the forest could produce around 30MWh per year. Logging residues from final cuttings account for around 50 percent of this figure. At present only around one percent of logging residues are used for energy production. The majority of the branches and tops are left in the forest, where they hinder new growth.

For all these reasons, SRF has no important role.

The Finnish forest industry supplies over 40 percent of its energy requirement by converting its wood-based by-products into heat, process steam, and electricity. Finland is also a trend-setter in combined heat and power production, with CHP plants accounting for over 30 per cent of the total installed power capacity.



In recent years, fundamental changes have taken place in the sphere of operations of the Finnish energy economy. The main changes concern the liberalisation of the Finnish energy market (the State does not intervene in market activities anymore), stricter environmental regulations, and Finland's membership in the EU as of 1995. These were the starting point for the long-term Energy Strategy prepared by the Council of State in the spring 1997, and it was approved by the Finnish Parliament in October 1997.

As result of the liberalisation of the market, there is a great competition among electricity producers, as a matter of fact anyone can build a power plant and produce electricity: no permits are needed.

It is declared goal of the Government (April 1994) to increase the use of bioenergy by a minimum of 25 per cent (1.5 million toe) by the year 2005. The Government approved a special programme on the promotion of bioenergy utilisation in which the main emphasis is in increasing the use of economically viable woodfuels and enhancing the competitiveness of said existing woodfuels.

As regard environment, Finland pursues an interventionist policy and some years ago adopted the following emission reduction goals:

In Finland publicly funded energy technology research is linked with the national, long-term industrial, energy and technology policies. In the period of 1993-98 research activities were carried out within 11 research programmes. Research programmes form a network linking academia and industry.

Total funding for the energy technology programmes during the years 1993-98 was 0.3 MEURO, about half of which will be put up by TEKES and the rest by the industry18.


Governmental Organisations involved:

· The Ministry of Trade and Industry is responsible for energy policy; its funding covers the first full-scale applications (demonstrations) resulting from the research and development activities;

· Ministries of Agriculture and Forestry participate in biomass, technology, transportation, financial aid and advisory services;

There are some organisations which can influence the policy orientation concerning biomass, such as:

· The Agrarian party, which supports agricultural diversification efforts and the development of biofuels;

· The Central Union of Farmers which promotes co-operation between farmers and heat network aimed at boosting the use of fuelwood, creating forestry jobs and improving the management of forestry wastes;

· Local Forest Management Associations provide expert assistance to forest owners in conjunction with delivery sale and other forestry activities;

· Local Agricultural Centres give out information about wood production;

· MOTIVA - the Information Centre for Energy Efficiency - financed by the Ministry of Industry and Trade for disseminating information on energy savings;

· TEKES is the Technology Development Centre of Finland. It deals with promotion and financial support for technological R&D;

· VTT ENERGY is one of the nine VTT Centres (the largest research institute in the Nordic Countries). It is a government controlled and impartial expert organisation that carries out technical and techno-economic research and development work19. It promotes export of efficient energy technology through research and product development and helps to reduce environmental impacts of energy use. The information unit arranges seminars, conferences, training courses and site visits.

Non Governmental Organisations involved:

· FINBIO - the Finnish Bioenergy Association is a private non-profit organisation that promotes and develops harvesting, transporting, and processing of biofuels and other biomass. It aims to promote the use of bioenergy in accordance with environmentally sound and sustainable development20.

· TTS - INSTITUTE'S Department of Forestry is specialised in the development of timber harvesting and silvi-culture. It conducts research focusing on forest work and the exploitation of indigenous fuels. It is also involved in the development of economic and safe equipment and methods. The department produces information especially for the representative organisation of the private, non-industrial forestry sector and for the forest owners.

· BIOWATTI is a subsidiary of a Finnish group whose shareholders are mainly forest owners. It is concerned with the collection of wood-fuel from all sources, the research of outlets and the delivery of fuel at heating plants and district heating network21.


As early as 1990 Finland has instituted a tax on the carbon content of energy products. Renewable energy, including wood, are tax-free. Environment taxes were restructured in 1994. In 1997, a new taxation law came into force: taxation of heat generation remained unchanged and the electricity tax was split in the category of private consumers, service sector, farmers and public sector (5.4EURO/MWh) and the category of industry (2.8EURO/MWh).

The Electricity Market Act (1st June 1995) aims to improve the efficiency and competitiveness of electricity generation, transmission, and distribution. At the beginning of 1998, a new taxation decision was made to promote the use of RE. The tax paid by the consumer on the electricity produced with wood-based fuel will be refunded as subsidy to the producer.



Plant investments and the production of biomass are subsidised in areas with high rates of unemployment. In forest improvement, the emphasis has been placed on the harvesting of wood for energy purposes.


The Ministry of Trade and Industry grants aids to investments in heat and power plants (11.4MEURO in 1995). Grants of up to 25 percent of investment costs are available for power plants, district heating plants and industrial space heating boilers using wood.


Energy crops are exempted from carbon dioxide taxes. There are available also a lot of funds for research aiming to make wood fuel production more competitive.


Wood fuel standards exist. The quality is determined by choosing for each delivery batch the limit values for the energy density, moisture content and particle size of fuels. (In January 1998 a "Quality assurance manual" for solid wood fuels was published by FINBIO).


The use of bioenergy in Finland is the highest among any other industrialised country. Forest residues have the greatest potential for extra biomass use, but their competitiveness is poor in many cases compared to fossil fuels22. It is common in Finland that the bulk of the solid biofuel is obtained from the forest through one procurement organisation. Through that advantages of integrated harvesting of energy and pulpwood is obtained not to mention the development of new, more efficient harvesting methods.

17 TEKES-Technology Development Centre "Growing power - Bioenergy technology from Finland"

18 ALTENER - "Renewable Energy Sources in Finland" Newsletter 8/1998

19 PYNE - Pyrolysis Network for Europe - Newsletter March 1997

20 ALTENER - "Renewable Energy Sources in Finland" - Newsletter n°5, Nov. 1995

21 EU-DGXVII- "Wood-fuel for Heating Systems - European Catalogue".

22 FINBIO - "Bioenergy in Finland" Review n°6, June 1998.

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