Security of supply is at risk unless timber trade is initiated. The Russian attack on Ukraine has made the management of young forests a key factor in energy supply.
In Finland, forests are not grown with a specific goal of energy production. Wood used in the energy sector is a by-product of logging, forestry operations, and the wood processing industry. Experts state that there are sufficient raw materials in the forests to meet the needs of energy production and the wood industry, but the profitable extraction of energy wood will be problematic.
“Security of supply will be compromised if we are unable to extract wood from the forest,” warns Kyösti Turkia, a bioenergy and bioeconomy expert at the Finnish Forest Centre.
The Russian attack on Ukraine is affecting the Finnish forest sector. Imports of softwood logs from Russia were halted due to Russian export duties even before the attack. In February, imports of Russian energy wood chips, used by district heating companies, were suddenly cut off.
In the new situation, energy wood procurement is focusing on young forests that need management. More than half of the energy obtained from forests in Finland is derived from small-diameter trees harvested during the thinning of young stands.
“There are significant energy reserves in forests that require thinning,” points out K. Turkia.
“In Finland, we must accelerate the harvesting and procurement process and figure out how to concentrate felling in areas where thinning is urgently needed, as that is exactly where we currently have high potential for harvesting.”
Young stand management has been neglected
According to data from the 12th National Forest Inventory, there are 800,000 hectares of forest in Finland where the management of young stands has been neglected.
“Of these, 460,000 hectares are forests where it would be sensible to extract energy wood. This is a large area, and there is a lot of wood to be thinned,” says K. Turkia.
Finland also has 900,000 hectares of forest in urgent need of first thinning. In some of these, energy wood extraction is also a reasonable solution, although pulpwood and even smaller logs are also obtained during the first thinning. More than half of the energy wood harvested in Finland is obtained from small-diameter trees derived from thinning young stands.
“Forests can be effectively managed even if management has been delayed at the stand stage. We must diversify the methods of managing young stands and develop logging practices. If we succeed in solving these problems, there will be enough raw material.”
The Finnish Forest Centre recommends early management for stands with a maximum height of three metres.
In 2020, the number of privately owned hectares that received support for early management under the Act on the Financing of Sustainable Forestry was just under 42,000 hectares, whereas the target is almost 70,000 hectares per year.
The location of energy wood extraction areas is known
If timely management of young stands is not carried out, small-diameter wood is obtained instead of sturdy logs. The forest resource data prepared by the Finnish Forest Centre includes maps of sites for energy wood extraction. This service is freely available to everyone.
“We know where management activities have not been carried out and where energy wood might be available.”
Timber buyers and procurement organisations can submit a request for contact data to find out who owns the forest. The data is available under the Forest Data Act. This is the right time to carry out overdue thinning work and conclude deals for your timber.
Forest owners were encouraged to carry out thinning work in a press release last week by the forestry company Stora Enso, for example. The company emphasised that thinning is an essential source of wood chips.
“This is the right time to start overdue thinning work and conclude deals for your timber. This will ensure the supply of timber to Finnish sawmills and keep them operating,” Janne Partanen, Head of Wood Supply at Stora Enso Finland, said in a Stora Enso press release. As wood consumption in the forest, wood products, and sawmill industries increases, so too does the availability of by-products suitable for energy production.
“Sixty percent of wood fuel used in energy production is derived from industrial by-products. Forty percent of wood energy must be obtained directly from the forest, and that is the most expensive part of wood energy,” says K. Turkia.
EU regulations emphasise the cascading principle; in other words, wood should first be processed for high-value purposes and only then used for energy.
“The direction supported by the regulation is the use of forestry by-products in energy production,” emphasises Kyösti Turkia.
Logistics chains must be rationalised – better subsidies are needed
K. Turkia believes that managing young forests and extracting small-diameter wood according to market conditions has been a challenge. The factor that determines where to extract energy wood is cost. The most profitable category of wood is fibrewood, and the price of energy wood will increase with demand.
K. Turkia explains that, given the new demand trend, the expansion of state support for sustainable forestry should be re-evaluated. However, this support alone will not be enough to accelerate the procurement of energy wood.
We must be able to improve the quality of logging so that forest owners are satisfied.
In K. Turkia’s view, the most crucial step now would be to ensure a seamless energy wood logistics chain. Heat supply companies need bio-terminals for storing raw materials. There is also a need for harvester operators qualified to work in young stands.
“We must be able to improve the quality of logging so that forest owners are satisfied. It is not hard to compile a list of challenges related to increasing energy wood procurement,” admits K. Turkia.
K. Turkia points out that everyone in the energy wood value chain must make a profit, and this includes those carrying out the actual logging. These entrepreneurs suffer from high logging costs and low profitability, even though energy wood purchased directly from the forest is the most expensive. Fuel prices have risen sharply. Over about two years, the price of light heating oil has doubled, and diesel fuel has become 70% more expensive.
“Ultimately, those buying district heating may have to pay a little more to ensure security of supply.”
EU requirements increase the importance of wood energy How will the situation be affected by potential new EU environmental targets?
“Under current crisis conditions, Finland’s security of supply has become a question that cannot be ignored, regardless of climate targets. The use of peat will be reduced more slowly if we want to provide homes with heat when we need to. The situation has changed quite suddenly, and there is great uncertainty,” emphasises K. Turkia. More than 70% of renewable energy in Finland is currently produced using wood fuel.
K. Turkia predicts that wood energy obtained from the forest will become increasingly important in achieving EU energy targets and that the share of renewable energy in Finland will increase. More than 70% of renewable energy in Finland is currently produced using wood fuel.
At the same time, the management and regulation of forest use in the EU are becoming stricter. The EU is preparing sustainability directives influenced by concerns over declining biodiversity.
It must be assessed how EU legislation and sustainability criteria will affect the potential for forest energy use in the future, says Kyösti Turkia.
“For now, Finland does not have detailed information on the content of the taxonomy, the biodiversity strategy, and the biodiversity criteria. They are all still being formulated.”
Kyösti Turkia notes that ecological sustainability can also be ensured in logging if forest management recommendations and forest certification criteria are followed.
“Biodiversity will be taken into account just as in other logging processes.”