Opinion of the European Economic and Social Committee on Wood as an energy source in the enlarging Europe
Date: 2006-03-15
Institutions: European Economic and Social Committee
Subjects: energy policy, energy supply, forestry policy, fuel, renewable energy, wood product

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Opinion of the European Economic and Social Committee on Wood as an energy source in the
enlarging Europe

(2006/C 110/11)

On 11 July 2005, the European Commission, on behalf of Commissioners Olli Rehn, Mariann Fischer Boel
and Andris Piebalgs, and in accordance with Article 262 of the Treaty on the European Union, asked the
European Economic and Social Committee to draw up an opinion on Wood as energy source in the enlarging
Europe.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing
the Committee's work on the subject, adopted its opinion on 27 February 2006. The rapporteur was
Seppo Kallio.

At its 425th plenary session, held on of 15 and 16 March 2006 (meeting of 15 March), the European
Economic and Social Committee adopted the following opinion by 130 votes in favour and six absten-
tions.

1. Conclusions

1.1
The European Economic and Social Committee (EESC)
considers that use of wood as a fuel is largely a question of
harnessing unused renewable energy potential (1) in Europe and
cutting emissions of the greenhouse gas carbon dioxide. It is
also important to bear in mind the role of forests in safe-
guarding the public interest (protection function and biodiver-
sity). Increased use of woodfuels also makes unexploited raw
material available for industrial processing. Using wood energy
helps to combat climate change, improve the EU's low level of
energy self-sufficiency and enhance security of supply, all of
which are objectives of EU energy policy. However, wood can
make only a limited contribution to solving energy problems.
In addition, other alternative energy sources need to be devel-
oped and steps taken to increase energy savings, including heat
insulation of buildings. Wood binds atmospheric carbon
dioxide while it is growing. One cubic metre of wood binds on
average 800 kg of carbon dioxide. Fundamentally, high
forestry stocks are thus highly significant for the long-term
sequestration of carbon in the forest. Good forest management
and ensuring forest growth help to boost carbon stocks.
Increased use of wood energy would replace non-renewable
energy reserves and at the same time reduce fossil fuel emis-
sions. The use of wood for energy purposes contributes to
more effective forest management and higher forestry stocks in
the long term.

1.3
The EESC believes that it is important that sustainable
use of timber should increase in every country and that the fuel
market be opened up to the industry's by-products, timber
obtained from the forest for energy production and processed
woodfuels. Fuel production and use is often closely associated
with the forestry and timber product industry. An international
market has also emerged for novel types of woodfuels in the
form of pellets, briquettes and bio liquid fuels. In order to
develop the woodfuel market
instruments are
required that also enable new operators to enter the market.
Economic instruments can help to increase demand for and
supply of wood. A carbon dioxide tax on fossil fuels and a low
VAT rate on woodfuel would boost demand for wood energy.
Investment aid can be used to increase energy producers'
demand for woodfuel. In addition, more needs to be done to
promote publicity about woodfuels, training, and research and
should be
development
focused particularly on activity outside the emissions-trading
sector. Transfer of technology and good practice and the crea-
tion of a communication strategy could be especially important
forms of support in the new Member States.

activities. Economic

instruments

economic

1.4
The EESC considers that harnessing and mobilising this
unexploited resource requires operators that can survive finan-
cially in a properly functioning market. In countries where the
market is undeveloped it must be possible to help operators
survive financially by providing them with temporary aid, e.g.
from the Rural Development Fund. It is vital to support forest-
owners' organisations, local entrepreneurs and small industry.

1.2
The EESC also considers that the increased use of wood-
fuel requires a long-term strategy based on the removal of regu-
lations that prevent and restrict its wider use. A level playing-
field must be created for the use of wood energy by removing
tax and aid arrangements that favour fossil fuels. A European
specification and classification for quality of solid wood fuels
— CEN/TS 14961 — has been published.

(1) Directive 2001/77/EC, OJ L 283, 27.10.2001, p. 35, Article 2(b).

1.5
The EESC would like to see efforts made to increase
demand for woodfuels by means of environmentally-oriented
economic instruments that treat different users equally and
encourage the use of wood fuel
in all market segments:
domestic heating with firewood and processed woodfuels;
heating of large individual buildings; plants producing district
heating and electricity for villages, municipalities and towns;
naturally, within the forestry industry; and in other industrial

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plants using heat and electricity that have local and regional
access to woodfuel. The use of larger quantities of wood as an
energy source should take place only when all heat insulation
possibilities have been used and a heating plan involving other
alternative energy sources (such as solar energy) has been
drawn up.

tial and monitoring of its use are needed, and the opportunities
it offers should be investigated more closely on a uniform
basis. This would make it possible to set operational objectives
and to measure the results of different instruments.

The EESC feels that special

initiatives are needed to
1.6
launch business activities involving the production of wood-
fuels, heating with woodfuel and electricity generation in
almost all the Member States, but in the new Member States
and accession countries in particular, where forest holdings are
small and there is a low degree of organisation among private
forest owners and low use of forestry resources. The barriers to
entry are often too high. Lowering them would increase busi-
ness activity and stimulate the creation and development of
new markets. The EU Structural Funds should be actively used
to initiate business activity and create local and regional
markets.

1.7
The EESC considers that all biomass fuel should be
treated equally. The competitiveness of wood among biomass
fuels must not be jeopardised by instruments in other EU
policy areas. With current technology, wood biomass is suitable
for producing all types of energy, and also as a raw material for
transport fuel.

The EESC considers that agreements and provisions that
1.8
limit
freedom of movement and other trade obstacles for
wood-based fuel within the European Union should be abol-
ished. Wood can play a significant role in stimulating competi-
tion in the energy sector. In particular it can compete with
other sources of energy at local and regional level.

The EESC notes that there is a lack of awareness of the
1.9
potential and use of woodfuel resources in the European
Union. Stocktaking of wood energy resources must be
improved in all present and future Member States as this infor-
mation constitutes the basis for sustainable development. In
this a differentiated approach is needed. Thus in the large
central European deciduous forest areas an adequate wood
potential should be left standing to ensure the variety of forest
species. There is not enough information about
forestry
resources that cannot be used by the industry because of their
location. These resources should therefore be clearly defined,
classified and standardised so as to avoid distortions within the
timber trade in the EU. National inventories of woodfuel poten-

1.10
The EESC considers that increased use of wood as fuel
is important in some regions in the control of forest fires
caused by humans in cultivated conifer monocultures. More
intensive use — especially for energy production — probably
could help to reduce the risk and occurrence of forest fires.

1.11
Research on selecting effective species and ecotypes,
intensive cultivation methods and shortened production cycles
should be integrated into the programme for exploiting wood
as an energy source. The plantation aspect of forestry should
be developed. The search for effective methods of obtaining
wood energy should not adversely affect the maintenance of
biodiversity or cause any problems for local and regional water
resources management. The EESC feels that it is necessary to
develop combustion technology and the technology and logis-
tics needed to use woodfuel from forests. Lasting results can be
achieved by supporting research and development, information
dissemination and technology transfers. Common European
standards must be established for small solid-fuel boilers, so
that competition is not impaired.

1.12
The EESC believes that more information should be
provided about the potential uses of wood energy. This applies
to the whole sector, from use of pellets in private homes to
large industrial and municipal plants, where wood chips and
by-products are used.
In many modern combined heat and
power plants co-firing with other solid fuels is possible.

Use of wood-based fuels, by-products of

1.13
the forest
industry and logging residue (crowns, branches, stumps and
low-grade timber from thinnings) would boost the profitability
of sustainable forestry and the competitiveness of the forestry
sector without significantly endangering the forest industry's
raw-material supplies or jobs in the forestry sector or wood-
based industries.
Increased use of wood energy would also
make an important contribution to the forestry sector's ability
to meet the Lisbon Strategy targets.

1.14
For the production of wood as an energy source use
should also be made of areas which are excluded from agri-
cultural use (afforestation as ‘energy woods’).

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2. General

2.1
The European Union does not have a common energy
policy. In recent years decisions have been taken concerning
the market in electric energy (96/92/EC (2)) and natural gas (98/
30/EC (3)), security of supply, greater use of renewable energy
forms and environmental issues connected with energy produc-
tion. There has been a failure to achieve a uniform level of
taxation of carbon dioxide emissions from fossil
fuels that
would appreciably encourage use of renewable energy.

The 1997 White Paper (4) sets the target of increasing
2.2
the use of renewable energy from 45 Mtoe in 1995 to 135
Mtoe in 2010. The objective was set for the EU15 and corre-
sponds to an increase in the proportion of renewable energy
from 5.2 % to 12 % by 2010. The proportion was 6 % in
2001. At best,
it could reach 10 %, but in the worst case
scenario it could be 8 %. This shows that the measures taken
have not been sufficient to put energy development on the
right track with sufficient speed. A communication from the
Commission (5) made a similar assessment.

or partial tax exemption for biofuels possible, and the overall
tax can even be lower than statutory minimum levels. Tax
exemption can be granted for at most six years at a time. Tax
concessions cannot be granted after 31 December 2012 and
under the directive the tax concessions granted cease to apply
by 2018.

2.7
A directive on emissions trading in the EU (2003/87/
EC (10)) was adopted in the autumn of 2003. The so-called ‘link’
directive (2004/101/EC (11)) was adopted in September 2004
and makes it possible to trade emission rights in development
projects outside the European Union (CDM — Clean Develop-
ment Mechanism) or between industrial countries (JI — Joint
Implementation).

2.8
In December 2005, the Commission issued a communi-
cation entitled Biomass Action Plan (12), which is intended to
accelerate and enhance the use of bioenergy in the Member
States.

2.3
The 2000 Green Paper ‘Towards a European strategy for
the security of energy supply’ (6) expressed a strong desire to
reduce the need for Europe to import energy and to increase
self-sufficiency. Self-sufficiency is currently about 50 %, which
— from a strategic point of view — is too low.

2.9 Most biomass exploited for energy production is used to
produce heat. A directive to promote the use of biomass in
heat production should be drawn up.

Directive 2001/77/EC (7) on the promotion of electricity
2.4
produced from renewable energy set a renewable electricity
target for the internal market of 22 % by 2010. Evaluations of
measures taken and follow-up of results show that the figure
will only be 18 %-19 % by the target date. There has been a
clear increase in the proportion of electricity produced from
biomass. However,
there is considerable variation between
countries.

Directive 2003/30/EC (8) on the promotion of the use of
2.5
biofuels sets a target of 5.75 % of all fuels by 2010. The inter-
mediate target was 2 % by 2005 but the outturn was only
1.4 %.

The best way to achieve energy efficiency is to produce
2.10
electricity and heat together in the same plant. Cogeneration is
particularly important in the production of district heating and
in efforts to increase the use of biomass as fuel. Directive
2004/8/EC (13) deals with the promotion of cogeneration of
heat and power.

The

2.11
European Union's 7th Research Framework
Programme (2007-2013) is currently being prepared. The Euro-
pean forestry sector has established a ‘Forest-based sector tech-
nology platform’, whose research programme also provides for
major investment in research and development in the field of
wood energy.

2.6
The directive on taxation of energy products and electri-
city (2003/96/EC (9)) enables Member States to exempt wood-
fuels from taxation or to apply a lower tax rate. This makes full

(2) Directive 96/92/EC, OJ L 27, 30.1.1997, pp. 20-29.
(3) Directive 98/30/EC, OJ L 204, 21.7.1998, pp.1-2.
(4) COM(97) 599 final, 26.11.1997.
(5) COM(2004) 366 final, 26.5.2004.
(6) COM(2000) 769 final, 1.12.2000.
(7) Directive 2001/77/EC, OJ L 283, 27.10.2001, pp. 33-40.
(8) Directive 2003/30/EC, OJ L 123, 17.5.2003, pp. 42-46.
(9) Directive 2003/96/EC, OJ L 283, 31.10.2003, pp. 51-70.

2.12
Competition in the energy market has developed very
differently in the various parts of Europe. This is true of both
production and distribution, especially within the electricity
sector, but also applies in many cases to the sale of fossil fuels.
Competition within the energy sector is unsatisfactory. As a
local and regional fuel, wood could generate more competition
on the market.

(10) Directive 2003/87/EC, OJ L 275, 25.10.2003, pp. 32-46.
(11) Directive 2004/101/EC, OJ L 338, 13.11.2004, pp. 18-23.
(12) COM(2005) 628 final, 7.12.2005.
(13) Directive 2004/8/EC, OJ L 52, 21.2.2004, pp. 50-66.

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2.13
New operators within the energy sector, and in par-
ticular small operators who want to supply electricity to the
grid on the same terms as others, find it difficult to compete.
The situation varies considerably across Member States.

2.14
On 30 September 2005 the European Parliament
adopted a resolution setting the objective of increasing the
proportion of renewable energy to 20 % by 2020. The resolu-
tion acknowledges that renewable energy does not have free
access to the market. It argues that administrative measures
that hamper the growth of renewable energy should be abol-
ished. It further proposes that the external costs of fossil fuel
use should be included in the energy price, that support for
harmful conventional energy forms be phased out and that
taxes that are a burden on renewable energy be abolished.

2.15
Citizen organisations in Europe actively coordinate
their stance towards renewable energy through environmental
labelling for electricity. Wood, as a renewable natural resource,
meets the requirements for sustainable energy production.
Harnessing energy from wood improves the basis for sustain-
able forestry. From a sustainability viewpoint it is important
that felling should not outpace growth. Sustainable forestry is
based on and safeguarded by the decisions taken by the confer-
ence of forestry ministers of the MCPFE (Ministerial Conference
on the Protection of Forests in Europe) on sustainable forestry in
Europe. Sustainable forestry is also safeguarded by forest certifi-
cation schemes. Under
sustainable forest
management adopted at the Lisbon meeting of forestry minis-
ters, the extraction of biomass from forest areas for energy
purposes must protect
the soil's carbon supply and fixing
cycles. The processes of evolution, nutrient supply and mainte-
nance of physical-chemical conditions in soil must therefore be
guaranteed. At this stage it is necessary to concentrate on
sustainably increasing the use and production of wood. At the
same time efforts should be made to develop good methods of
harnessing wood energy. In many EU countries there are also
good examples of labelling schemes for wood energy which
guarantee that energy production is controlled and inform
consumers about respect for environmental criteria.

the criteria for

million hectares in the accession countries. The net annual
increment (growth) of the growing stock (gross increment less
natural loss of trees) in the EU is 560 million m3. In 2002 fell-
ings amounted to 350 million m3, of which 41 million m3 was
traditional felling for firewood. Net imports of roundwood into
the EU amount to about 25 million m3. Together, industry and
households use 62 % of the annual increment, of which more
than 7 % is traditional firewood for use in the home. A good
total growth is in protected forests or otherwise
10 % of
outside commercially exploited areas.

2.16.1
This means that almost 30 % of growth is still
unexploited, and EU forest stock is therefore still growing, as it
has been for the past 50 years. Part of this unused timber (170
million m3) is low-grade timber, which can only be used for
energy production. Of this amount, 30 million m3 can be used
as energy wood, in addition to other raw-material use. Each
year 173 million m3 of logging residue and other wood from
felling suitable for energy production are left in forests. Taking
into account technical, economic and ecological constraints, an
estimated 70 million m3 of this amount, in the form of felling
residue and stumps, could be used.

By-products of the forestry industry (black liquor,
2.16.2
bark, sawdust, etc.) and recovered wood offer the greatest
potential and are already exploited effectively in many coun-
tries, particularly in the context of an integrated forest industry.
Use of by-products and recovered wood for energy purposes
could amount to 30-50 % of roundwood use (equivalent to
100-167 million m3 of roundwood).

2.16.3
This implies that the EU's sustainable energy wood
potential is about 267 million m3; part of the industrial by-
products included in this amount is already exploited. This
amount of wood is equivalent to 50 Mtoe of energy. Thus EU
forests have an unused wood energy potential of at least 100
million m3. The amount of by-products is increasing along
with expanding use of roundwood in the forest industry. Small
quantities of energy wood can be obtained in conjunction with
cultural
landscape management. The FAO/UNECE Timber
Committee is currently developing arrangements for moni-
toring use of woodfuels and testing a data collection system in
ten countries.

Forestry resources in Europe (stem volume in cubic
2.16
increased by approximately 30 %
meters without residuals)
when the 10 new Member States joined the EU in 2004. The
EU's total
forest and woodland area currently amounts to
140 million hectares and there is about 22 million hectares in
the accession countries. Commercially exploited woodland area
in EU Member States (i.e. forests available for wood supply —
woodland areas where statutory, economic and environmental
protection constraints do not significantly affect timber produc-
tion) totals 117 million hectares and there are a further 19

2.16.4
In 2001 only 101.3 Mtoe of total energy consump-
tion of 1,668 Mtoe in the EU (EU25) was produced using
renewable energy forms. In most countries — all except four
— biomass accounted for the largest proportion of renewable
energy. In eleven countries, the proportion was over 75 %. The
proportion was particularly high in the other new Member
States, except Malta and Cyprus.

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3. Greenhouse gases and use of wood as a substitute

major heat, steam and electricity requirements, so it is espe-
cially appropriate to generate electricity in connection with
industrial processes.

3.1
The main indirect cost of fossil energy sources is climate
change. Carbon dioxide is the most important greenhouse gas.
Some countries have tried to address carbon dioxide emissions
by imposing a CO2 tax. Sulphur, nitrogen oxide and particulate
emissions also create external costs. Woodfuel
is carbon
dioxide-neutral, i.e. it does not increase net emissions into the
atmosphere. Wood contains
and nitrogen
compared with other fuels, and the main source of its particu-
late emissions is its traditional small-scale use.

sulphur

little

3.2
The wellbeing of today's planet rests almost exclusively
on the use of non-renewable natural resources. This is particu-
larly true of energy production and use of energy that is largely
the product of fossil fuels such as lignite, coal, oil, oil shale and
natural gas.

Energy use is the main cause (59 %) of greenhouse gas
3.3
emissions in the world. The main emission due to energy use is
carbon dioxide, whose air concentration level has continued to
increase over many decades.

The mechanical and chemical

3.8
forestry industries use
wood primarily to make wood and paper products. The
process gives rise to various types of by-products that are
highly suitable as fuel for energy production. Modern chemical
and sawmill industries are generally net producers of energy,
i.e. they can produce more energy than they use themselves.
By-products that are not needed for their own energy produc-
tion can be sold on the biomass fuel market.

The most

important by-product

3.9
from pulp mills is
lignin-containing black liquor, which can be used to produce
electricity and heat. Black liquor is also likely to be used in the
future as a raw material
for vehicle fuel. This will require
further research and development. Ethanol from lignocellulo-
sics, gasification and subsequent production of synthetic diesel
are other likely sources of energy.

3.4
The use of fossil fuel also causes emissions of other
substances that harm the environment, e.g. sulphur dioxide,
nitrogen oxides and particles of various sizes. Use of wood as a
replacement fuel reduces these emissions. Woodfuels replace
energy production based on fossil fuels, which have a notably
more harmful environmental impact.

3.10
The new Member States offer considerable potential
for expanding the forestry industry and using wood as a raw
material for production of wood-based products and energy.

3.5
Using wood in various products is an effective way of
decreasing CO2 emissions, as preparation of wood products
usually requires considerably less energy than competing mate-
rials. Wood as a material
is a substitute for non-renewable
natural resources. The competitiveness of wood products in
relation to energy-intensive products such as steel and concrete
is improving as a result of emissions trading.

Biomass fuel markets are usually local or regional
3.11
markets, owing to,
for example, transport costs. Processing
furniture or sawmill industry by-products to produce pellets,
bio-oil from pyrolysis or briquettes, for example, could easily
open up new, wider markets. Distribution networks should
therefore be boosted and guaranteed in order to facilitate
consumption by the public. The new CEN classification makes
distribution and trade easier.

Using renewable energy instead of fossil fuel can help to
3.6
cut greenhouse gas emissions. The scale of
the reduction
depends on the fuel and production methods that are replaced
with renewable energy. Different fossil fuels have different CO2
emission coefficients. From the point of view of cutting emis-
sions,
it is particularly important to use energy production
methods where the unit cost of emissions is low.

3.7
Using fossil fuels simply for electricity generation is a
poor environmental solution. Many industrial processes have

3.12
Forest fires are a serious problem particularly in Medi-
terranean countries such as Portugal, Spain, France, Italy and
Greece. They also pose a minor risk in northern European
countries. Managing these areas and collecting materials that
increase the risk of forest fires reduces economic losses. The
cause of forest fires are legion, but three leading causes should
be singled out:
forest condition — felling residue must be
removed in order to lower the fire risk; people's behaviour; and
lack of monitoring and extinguishing systems. Forest fires are
major natural disasters and every effort must be made to
prevent and combat them, both in Member States and the EU.

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4. International politics and development

4.1
In 2005 the energy market was hit by higher oil prices
and a deficiency in oil product processing capacity. At the
same time, electricity prices have generally risen. One reason
for this is trading in emission rights, the overall
impact of
which is, as yet, impossible to gauge. In addition, deregulation
of the electricity market has not progressed very far.

4.2
The international political climate is a key factor when it
comes to increasing use of renewable energy forms. The Euro-
pean Union has,
in accordance with the Kyoto Protocol
(entered into force on 18 February 2005), undertaken to cut
CO2-emissions by 8 % compared with 1992 levels. This reduc-
tion has been shared out between the Member States according
to each country's ability to cut emissions. The EU's emissions
trading scheme is one component of the European Union's
climate strategy, and is only partly linked to the Kyoto
Protocol.

4.3
Emissions trading within the European Union started on
1 January 2005. The initial period covers the years 2005-2007
and only applies to CO2. Internal distribution within the EU
depends on the EU15 as a whole succeeding in cutting emis-
sions; failing this, each EU15 Member State will have to ensure
it manages to achieve the 8 % reduction like other countries.
Some Member States have even more ambitious requirements
for 2008-2012. The post-2012 international
situation is
unclear. Some individual EU Member States have announced
different objectives for the European Union as a whole and for
themselves individually.

States pursue

their own national

The European Union has no common forestry policy,
4.4
but Member
forest
programmes and policy. The EU Council of Ministers approved
an EU forestry strategy in 1998. Forestry strategy is under-
pinned by the subsidiarity principle, according to which
forestry policy is basically a Member State competence.
In
March this year the Commission issued a communication on
the implementation of the forestry strategy (14), stressing that
promoting wood energy brings added value to EU sustainable
development policy. The EESC issued an opinion (15) endorsing
the Commission's communication in October 2005. At the
moment, the Commission is working on an action plan for
sustainable forestry in the European Union, which is due to be
completed in 2006.

(14) COM(2005) 84 final, 10.3.2005.
(15) CES 1252/2005 OJ C 28, 3.2.2006, pp. 57-65.

Since 1998 the European Union's

4.5
forest area has
increased by 20 % and the number of private forest owners
from 12 to 16 million. In most of the new Member States the
State is still a major forest owner. It is essential to improve the
capacity of the private forestry industry in new and future
Member States. Wood markets are poorly developed in many
countries. Forest-based economic activities in these countries
are still at a modest stage of development but the prospects for
the countries
improving forestry are good, provided that
concerned formulate effective and efficient
In
addition, efforts should be made to increase interest in produ-
cing energy wood. Energy wood production requires the exten-
sive mobilisation of the entire forestry sector, especially at the
beginning of the production chain.

forest policy.

4.6
There are many small forest holdings in the EU. Action
should be taken to promote the organisation of small forest
owners and cooperation between them so as to foster forestry
and efficient wood energy production. The EU could contribute
to this by helping forest sector organisations to increase their
skills and capacity.

4.7
The development of competing energy forms often takes
place in monopoly-like conditions where it is very difficult to
create properly functioning local and regional markets for
woodfuels.

4.8
The fuel market is global and electricity can also be
transmitted across borders in large quantities. In spite of this
Europe is not — and cannot become — fully self-sufficient in
energy production. To improve the European Union's energy
supply, greater focus will have to be put on objectives aimed at
increasing the proportion of energy produced within the EU
and reducing dependence on imports.

5. Woodfuels and their promotion

5.1 Wood plays an important role in energy supply in coun-
tries with large tracts of woodland. Since only just over 50 %
of forestry potential is exploited industrially, efforts will have to
be made to harness by-products from logging and to tap into
this unused potential for energy production. From the point of
view of sustainable development, renewable wood energy is
always preferable to production based on fossil raw materials.
It also helps to underpin good, sustainable forest management
practices, particularly when regenerating forest and thinning
young forest stands.

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5.2 Wood is a renewable raw material and wood products
also act as carbon reservoirs. Recycling of wood products
continues to grow.

wood as fuel must be given the chance to assess the availability
of renewable wood supplies and the profitability of investment
in electricity generation.

5.3
At the end of their various recycling processes, wood
products can be used to produce energy. Similarly, all forestry
and wood industry by-products can be used as raw material for
energy production. Thus the forestry industry and energy
production are a formidable, environmentally friendly combina-
tion.

In order to boost the use of renewable energy sources
5.10
in electricity markets, some Member States have introduced
support schemes based on quotas and feed-in tariffs (firm fixed
prices for renewable energy). In many countries these schemes
are essential for promoting the use of wood energy. Eco-labels
for renewable electricity and especially for electricity produced
from wood could help to promote the use of wood energy.

5.4 Wood is a suitable fuel for energy generation needs in
private houses, blocks of flats, district heating schemes and
industry. Electricity is most efficiently generated in conjunction
with district heating or industrial heating and steam production
(‘combined heat and power’, or CHP).

5.5
The imposition of a carbon dioxide tax would be a good
way of making wood energy more competitive on the energy
market. In addition, the use of wood energy could be increased
through support for fuel production, for example by granting
forest owners aid for logging costs associated with projects
which do not compete with the supply of raw materials to
industry. However, it is essential that such a tax does not lead
to a reduction in forestry stocks, as otherwise the function of
forests as CO2 sinks would be diminished. This measure should
be complemented by tax breaks for forest owners who increase
forestry stocks and thus contribute to the absorption of CO2.

5.6
Instruments that promote wood as fuel boost demand
for wood raw materials that can also be processed to make
wood-based panel products for the construction industry. Heat
is only generated locally where the need for energy arises, and
so the mechanical forest industry, which can also make use of
recovered wood, should be developed in an integrated way
with energy production.

5.7
The forest industry has a permanent advantage in that
production plants already possess logistic resources that can
also be deployed for acquisition and use of woodfuels.

5.8
The competitiveness of wood energy can also be
achieved through tax concessions, e.g. by lowering value add
tax on wood pellets, retail firewood or on electricity produced
with wood.

5.11
In the initial stage investment aid should be provided
for wood energy production plants and for machinery and
other technical equipment needed for production because of
the high cost of establishing such plants.

5.12
Aid is also needed for research and development. This
applies particularly to forestry management, technology, energy
production and use of woodfuels. Prognoses and scenarios that
ensure the overall sustainability of forests, inter alia in their
biodiversity role, must be developed for forestry management.
There is also a need for research on harnessing pulp industry
by-products to produce more processed liquid fuels, such as
those used for vehicles.

5.13
Use of wood as a fuel can also be boosted by setting
stricter limits on, for example, sulphur emissions. Similarly, use
of woodfuel can be promoted by taxing emissions, ash or other
waste resulting from the use of other fuels.

5.14 Markets for woodfuels and especially firewood are
local but increased use of wood energy in the EU would create
jobs in the market for machinery and equipment as the equip-
ment needed for the mechanised recovery of
timber from
forests is similar in all countries. Special machinery and equip-
ment are also needed to produce pellets, briquettes and other
processed woodfuels. Energy production requires a large
number of boilers and other high-value equipment that offer
major growth potential. Increased use of wood energy would
also open up major opportunities for exporting technology to
other parts of the world.

5.9
In order to provide for rapid uptake of, for example,
electricity generation using wood as fuel, competitive prices
could be paid to electricity producers. Plants planning to use

5.15
Comprehensive information campaigns are needed for
technology transfers and dissemination of knowledge between
EU countries. This could also be carried out by various inde-
pendent organisations. Campaigns could be financed wholly or
partly with public funds.

9.5.2006

EN

Official Journal of the European Union

C 110/67

Household firewood use is still relatively important in
6.4
rural areas
in new Member States with extensive forest
resources and where exploitation for industrial purposes is
fairly low. Exploitation of wood energy is also a useful comple-
ment to the by-products of small-scale sawmill operations.

6.5
To enable Europe's millions of small forest-owners to be
actively involved on the wood energy market, market-oriented
cooperation must be promoted, e.g. through associations and
joint undertakings. This is widely considered to be the key to
exploiting the ‘dormant’ potential of wood. Better cooperation,
particularly at the beginning of the wood production chain,
and between the various operators would also be helpful. In
particular, organisations of forest owners are not well-devel-
oped in many of the new Member States and the accession
countries. In many of the old Member States, organisations of
forest owners and other organisations have proved to be the
most effective way of training forest owners and motivating
them to market renewable wood energy on the timber market.
Effective cooperation can bring considerable cost savings in the
procurement of wood for use as a raw material.

A significant number of new jobs can also be created in
6.6
the machinery and tools industry when there is greater recourse
to woodfuels and more processing.

The president

of the European Economic and Social Committee

Anne-Marie SIGMUND

Optimum use of

5.16
is best
achieved by means of national decisions, with the European
Union playing a coordinating role.

instruments

economic

6. Employment and rural development

impact on employment

6.1 Wood is an important renewable natural resource that is
harnessed to promote rural development and create jobs. The
is estimated at over
direct net
1 000 person-years of employment per 1 million cubic meters
of wood, and the total impact, including the multiplier effect,
at 1 500-2 000 person-years of employment (16). These figures
do not include firewood for home use.

6.2 When imported fuel is replaced with woodfuels, a fuel
cost consisting of foreign capital is replaced with local work
and other local or regional inputs. The overall impact depends
on the extent to which imported fuel can be replaced with
locally or regionally produced woodfuels.

6.3
Replacing imported fuel with woodfuels provides
employment above all for the local rural population. Businesses
are small and can only grow if skills are improved and invest-
ment support is provided. Development of logging companies
and business models is critical to increasing the use of wood
and wood for energy production.

Brussels, 15 March 2006.

(16) See the list of sources in the appendix.