Finnish government’s obligation package to support wood-based energy production

Finland will boost energy production from forest residues to reach renewable energy targets.

On 20 April 2010, the Government’s ministerial working group for climate and energy policy agreed on the contents of an extensive package of obligations concerning renewable energy, with the aim of increasing energy production based on renewable forms of energy by a total of 38 TWh of final energy consumption by 2020.

This package will promote the use of forest chips and other wood-based energy in particular, alongside wind power, the use of transport bio-fuels, and the increasing utilisation of heat pumps. In doing so it will enable Finland to meet its obligations set by the European Union, to increase the share of renewable energy to 38% of final energy consumption in 2020.

The use of wood chip will be increased to 25TWh (equivalent of 13,5 million cubic meters). In 2009, the use of wood chip in Finland was approximately 10TWh (5 million cubic meters). This development will be supported with an incentive package consisting of three elements:

1) Energy subsidy for first thinning chipping

2) Support for increased wood fuel consumption in existing power plants

3) Feed-in-tariff for new small-scale CHP plants

Total value for the incentive package shall be over 300 million euros in 2020. A feed-in-tariff, planned for wind energy, biogas as well as for small-scale cogeneration, forms a majority of the package. In all, with the help of the subsidies, investments of nearly 10 billion euros on the production of renewable energy in Finland could be realized.

More information

Minister of Economic Affairs Mauri Pekkarinen, tel. +358 (0) 10 606 3500

Special Adviser to the Minister of Economic Affairs Jyrki Peisa, tel. +358 (0) 50 364 0836