The growing interest in woodfuels as an environmentally friendly source of energy is leading to an increased number of initiatives and projects in this field. In fact, EU countries expect to reduce their CO2 emissions by 2010 by 15 percent from the 1990 level. One important contribution to this reduction is expected to come from the utilization of wood fuels. This implies that production, trade and use of woodfuels (and other woody biomass) will increase substantially in the coming years and play a leading role in the national energy mix.
Already, in several developed countries, such as USA and Canada and in Northern and Central Europe, demand for woodfuels for heating and power generation is increasing rapidly. The countries involved are also developing market structures to accommodate this. However, for many other countries there remain several aspects influencing the implementation of wood energy systems which need to be investigated. Some concern economic and financial aspects, especially their competitiveness against other energy options. These latter needs to be clarified, particularly given the present circumstances of rising oil prices.
This study analyses the economic conditions in order to show where and when wood energy projects and solutions can be applied. It reviews the economic aspects of bioenergy systems, with main emphasis on wood energy systems, and compares these systems with other conventional energy sources including gas, oil, coal, solar, wind and hydro.
The report provides an assessment of the costs of the utilization of woodfuels as a source of energy, and compares these with other energy options. In the process it indicates the role that government incentives and special taxes, as well as the Clean Development Mechanism, play in influencing the viability of wood energy systems.
The study continues FAO’s long interest in wood energy issues. It complements the many other FAO reports which have addressed the physical and technological aspects of wood-energy systems. A list of these may be found on the FAO Wood Energy website1. It was funded by FAO’s Regular Programme and carried out under contract to FAO by Mr. Gerard Horgan, Consultant and under the direct supervision of Dr. I.J Bourke and Dr. M.A.Trossero of the Forest Products Division.
This overview assessment will provide the base for further FAO work, which addresses more country-specific issues, particularly those concerning the developing countries and also small-scale woodfuel systems.
FAO trusts that this paper will assist in raising awareness and understanding of the important role woodfuels may play in energy systems.
Forest Products Division