Wood-based fuels in energy generation

Black liquor, bark and chips from wood processing used to produce electricity and heat

Wood-based energy is generated from side streams of wood processing, such as bark, sawdust and waste liquors from pulp production. Treetops, branches, stems and stumps collected in connection with harvesting and forest management work can be chipped and used as a source of energy, i.e. as forest chips. In Finland the main purpose of use of wood-based fuels is heat and electricity production. 

In recent years more than a quarter of the total energy use has been produced with wood-based fuels. Today, wood-based fuels are the most important individual source of energy generation: since 2012 their share has been larger than those of oil, coal or natural gas.

Wood-based energy from many different sources

In Finland the use of wood-based fuels for energy generation is based on side streams of wood processing or different kinds of residue or small-diameter wood from harvesting operations and forest management.

The most significant individual type of wood-based fuel is black liquor produced as a by-product of pulp mills (46 TWh in 2021). Besides this, heat and power plants use about the same amount of solid wood-based fuels, such as bark, sawdust and forest chips (46.8 TWh in 2021).
In 2021 a total of 113 TWh of energy was produced from wood-based fuels. Of this, 46 TWh was produced from black liquor and other waste liquors from forest industry and 46.8 TWh from solid wood-based fuels of industrial and energy production. Wood-based fuels account for about 30% of the total energy use in Finland. 

In recent years the increase in the use of wood-based fuels has mainly been based on the growth in the use of side and waste streams from forest industry. Wood-based fuels have substituted for fossil fuels, i.e. the use of coal, oil, natural gas and peat, which has significantly contributed to the increase in the share of renewable energy sources in Finland.

Side product and waste wood from forest industry is an important source of energy

Most of the solid wood-based fuel used by heat and power plants is side-product and waste wood from the forest industry, of which about two-thirds is bark. Besides these, different kinds of sawdust, wood residue chips, recycled wood and wood pellets and briquettes are used. According to provisional data for 2022, the use of side product and waste wood from forest industry totalled 12.9 million cubic metres. Besides side product and waste wood, heat and power plants use forest chips to produce electricity and heat. When the different kinds of side product and waste wood from forest industry and forest chips are added up, the use of solid wood-based fuels in heat and power plants totalled 22.8 million cubic metres in 2021. In terms of energy content this corresponded to about 44.7 TWh.

More than half of forest chips from small diameter wood

In the past ten years (2012–2022) the average annual use of forest chips in heat and power plants has been about 8.0 million cubic metres (about 16 TWh). In recent years more than half of the forest chips have been chipped from small diameter wood harvested e.g. in connection with the management of young stands. The second most common source is logging residue. In Finland the use of forest chips is mainly based on parts of trees that are not fit for industrial wood processing. 

According to provisional data, in 2022 the use of forest chips in heat and power plants rose to 10.2 million cubic metres. Of this, 6.4 million cubic metres was small diameter wood and 3 million cubic metres was logging residue. Besides these, the plants used about 0.9 million cubic metres of wood from sturdy trunks, mostly damaged by rot, and dry standing trunk wood and stumps. In 2022, 6.6 million cubic metres of forest chips were used in combined heat and power production (CHP) and 3.6 million cubic metres were used in heat production.

According to provisional data for 2022, together with the 0.6 million cubic metres burned in small residential buildings, the use of forest chips totalled 10.8 million cubic metres.

Fuel wood used by farms and private households included in wood-based fuel statistics 

In Finland the use of wood-based fuels also includes fuel wood used on farms and in private households. The Natural Resources Institute Finland carries out surveys to estimate this small-scale use of fuel wood. The most recent statistics are for the heating season 2016–2017. According to these, small residential buildings use about 6.9 million solid cubic metres of fuel wood per year, which in terms of energy content corresponds to 15.3 TWh. Wood and chips burned in small residential buildings account for about 9% of all domestic roundwood harvested in Finland. When this wood is also included, in 2022 the total use of solid wood-based fuels was about 30 million cubic metres, which corresponds to about 60 TWh.

Supply of forest chips as a substitute for energy peat and coal studied in 2021

The substitution of peat and coal with renewable energy sources will increase the demand for solid wood-based fuels in the next few years. AFRY Management Consulting and Natural Resources Institute Finland conducted a study in 2021 to estimate the growth in the demand for solid wood-based fuels in energy production. AFRY’s study was concerned with the trend in the demand for forest chips and other energy wood, domestic supply in different regions, and the impacts of these on the energy use of roundwood and use of imported chips and, through these, on security of supply. Projections were made for the years 2025, 2030 and 2035. The Natural Resources Institute Finland studied the supply of forest chips until 2030 on the basis of three demand scenarios. Links to these studies are given below.

 New National Climate and Energy Strategy adopted in 2022

The National Climate and Energy Strategy adopted in 2022 is a comprehensive medium-term action plan that covers all greenhouse gas emissions in the emissions trading, effort sharing and land use sectors and carbon sinks in land use and other sectors. In particular, the process to prepare the strategy was based on the EU's climate and energy targets for 2030 and the carbon neutrality target 2035 set in the Government Programme. Background material on the policy actions and their impacts for the Climate and Energy Strategy and Medium-term Climate Plan was prepared in the project ‘Carbon neutral Finland 2035 – measures and impacts of climate and energy policy’ (HIISI). The matters related to the forest sector in the Climate and Energy Strategy include the objectives and policies concerning the trends in renewable energy and carbon sinks.


Related topics

Wood fuels in energy generation in Finland (March 2022)

Statistics of Statistics Finland, Natural Resources Institute Finland and Finnish Energy

Wood in energy generation in 2022, provisional (22 March 2023)
Fuelwood consumption in small-scale housing 2016/2017 (Natural Resources Institute Finland 19 June 2018)
Energy supply and consumption (Statistics Finland)

Finnish Energy statistics on electricity and district heating in Finland
Finland in Figures: Energy (Statistics Finland)

Related links

Press release on the Climate and Energy Strategy 30 June 2022 (Ministry of Economic Affairs and Employment)
Climate and Energy Strategy (Ministry of Economic Affairs and Employment) 
Energy (Natural Resources Institute Finland) 
Forest energy (Forest Centre)


Further information

Kaisa Pirkola, Ministerial Adviser 
Ministry of Agriculture and Forestry, Natural Resources Department, Metsä- ja biotalousyksikkö Telephone:0295162350   Email Address: