Forest chips in Finland
Original author Toni Ruotsalainen, editor Teija Kanniainen
Forest chips are a general item for mechanically chipped wood that comes straight from forest. Forest chips are usually chipped from logging residues, small diameter trees especially from pre-commercial thinnings or roundwood that doesn’t fulfil the quality standards of wood processing industry. Forest chips also include mechanically crushed wood, so for example stumps can also be used for forest chip production. Forest chips are used for production of both heat and power (Motiva 2016). The caloric value of forest chips made of soft wood logging residues varies between 18,7-19,8 MJ/kg and of hard wood logging residues between 17,8-18,5 MJ/kg (VTT 2008).
2. The market of forest chips
In 2012 the whole usage of forest chips in Finland was 8,2 million solid cubic meters, of which 7,6 million solid cubic meters were used in heat and power plants and the rest was used in Finnish one-family houses and farms (Motiva 2016). The usage of forest chips has grown strongly, and according to a Finnish national renewable energy strategy the goal for forest chips usage in combined heat and power production and in separate heat production will be 13.5 million solid cubic meters by 2020. There is also a goal to add usage of forest chips in production of biofuels for traffic, whose production target is 7 TWh in 2020. (Asikainen ym. 2013). Achieving these goals will be challenging because of the competition and sufficiency of forest resources.
Picture 1. Usage of forest chips in Finland. Yellow =small diameter trees, dark green=logging residues, light green=stumps, dark blue=dozy sturdy wood, light blue= other, grey=usage in one-family houses, red=goals. 1 TWh ~ 0,5 million m³ (Strandström 2014).
3. The policy measures around forest chips' market
In addition to Europe 2020 ‘s goal to increase the share of renewable energy into 38% in Finland (European Commission 2016), the Finnish national renewable energy strategy is the most important policy measure regarding to bioenergy and usage of forest chips. To increase usage of forest chips to produce renewable energy there is a two stage supporting system to improve its competitiveness compared to competing fuels. The first subsidized stage is to improve profitability of treating young forests and collecting small diameter trees for energy, and subsidy is paid to forest owners on that stage. The subsidy is granted for collecting energy wood when the amount exceeds 20 m³ and the amount of subsidy is 7 €/m³ (Motiva 2016).
The second stage is the fluctuating production subsidy for CHP plants feeding electricity into power-distribution network and who are accepted into tariff system. The main purpose of this subsidy is to maintain forest chips competitiveness compared to peat. The amount of subsidy is at the moment 15,87 €/MWh, and in addition to that there is also a gasification premium which is 2,74 €/MWh (Energiavirasto 2016). There has also been an announcement that the amount of the subsidy would be rising into 18 €/MWh. This reformation also includes a restriction for wood, that fulfils the quality standards for wood processing industry. The restriction lowers the subsidy for using these raw materials into 60% (TEM 2016).
The research of bioenergy and also forest chips production is important, and it's possible to get funding from EU to research projects. Nowadays there's for instance research programme Horizon 2020 in EU (European Comission 2016).
4. Evaluation of the effects of policy measures
As the picture 1 shows, it seems that the target level in 2020 seems to be quite difficult or maybe even impossible to achieve. The usage should increase about 15% every year during next four years. The usage of forest chips has increased very strongly from the beginning of 21st century but in 2014 the usage decreased 6%, while usage of for example recycled wood increased with 13% (Luke 2014). There has also been a lot of conversation about new restriction that limits using wood, which could be used in wood processing industry, for bioenergy with lower subsidies. This reformation has been validated with concerns about too small forest resources for both growing energy production and wood processing industry, even though experts have shown with their calculations, that sustainable level will allow increased use of wood in both bioenergy production and wood processing industry. Competition between these two is still going to be hard.
Even though there are quite many difficulties and challenges in growing usage of forest chips, I strongly believe that the amount will be raised the next years, because Finnish forest are growing faster than ever. Wood as a domestic fuel reduces our dependency on imported fuels and improves employment situation of sparsely populated areas (Energiateollisuus 2016).
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