A survey analysis of the wood pellet industry in Finland: Future perspectives

Abstract

Finland has the greatest forest cover of western European countries and thus considerable raw material potential for wood pellet market development. Wood pellet production and consumption volumes in the country have increased steadily during the last decades. The aim of this paper is to present an overview of the current status of the Finnish wood pellet business and discuss the main opportunities and challenges facing future development of the industry. The paper collects and revises data on the Finnish wood pellet market based on the results of a survey of nearly 60 wood pellet experts. The results show that neglect of policy support and a lack of suitable regulation are the key factors inhibiting Finnish wood pellet industry development. Currently, wood pellets are not economically competitive with other fuels. However, Finnish wood pellet markets seem promising if challenges such as high raw material costs and competitiveness with other fuels, especially for household users, are addressed. The country has the potential to become a more important producer and consumer on European wood pellet markets if effective policy support and a suitable regulatory framework are formulated.Keyword: Pellets; market; Finland; bioenergy; power energy; biomass IntroductionGrowing demand for CO 2 -free energy, concerns around environmental sustainability, and a desire to decrease dependence on fossil fuels are increasing the role of biomass in energy production. Finland is one of the leading countries in the European Union (EU) in terms of bioenergy utilization and, primarily due to the large share of biomass-based energy in the energy mix, Finland reached a 39% share of renewable energy in final energy consumption in 2014 [1]. The country has plans of reaching 100% renewables by 2050 [2]. Achieving this target is not easy and requires efficient technologies, especially for bioenergy, as this form of energy will likely provide the backbone of energy for transport. Discussing a 100% renewable energy economy, Mathiesen et al.[3] present a Smart Energy Systems concept that may provide a more feasible energy economy structure and enable more sustainable use of bioenergy than current approaches. For Denmark, for example, an overall energy system analysis of a 100% renewable energy system and an energy economy model based on linear programming for the optimal sizing of 100% renewable supply systems are presented by Lund and Mathiesen [4] and Milan et al. [5] respectively. 100% renewable energy system scenarios have also been presented for Japan [6], Macedonia [7] and Portugal [8]. Describing existing studies on 100% renewable energy systems, Olabi [9] concluded that despite major progress in the field, more research and development are required if te aim of 100% renewable energy by 2050 is to be achieved. Bioenergy will clearly play an important role in many EU countries, including Finland, in any 100% renewable energy future. Biomass is a variable and complex material with considerable challenges when used directly, i.e. i...

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