FI
Finland’s energy wood market has experienced a notable decline in prices, a trend that experts believe could invigorate the nation’s bio-based energy sector. This development is poised to attract significant investments, bolstering Finland’s position as a leader in renewable energy.
Recent data from the Natural Resources Institute Finland (Luke) reveals that the use of solid wood fuels decreased by 3 percent in 2024, marking the third consecutive year of decline. Specifically, the consumption of forest chips dropped by 5 percent, while the use of by-product wood from the forest industry remained steady compared to 2023 levels.
Despite this downturn, the demand for forest chips remains over 40 percent higher than pre-2020 figures. Harri Laurikka, CEO of Bioenergia ry, attributes the heightened demand for forest chips to increased pressure to replace other energy sources and reduced availability of by-product wood due to economic fluctuations in 2023–2024. He notes that nearly half of the growth in forest chip demand stems from the lower utilization of by-product wood.
Implications for Bio-Based Energy Investments
The reduction in energy wood consumption has led to a surplus in supply, driving prices down. This price drop presents a lucrative opportunity for investors in the bio-based energy sector, as lower feedstock costs can significantly enhance the profitability of bioenergy projects.
Finland’s commitment to renewable energy is further evidenced by recent developments:
- Green Hydrogen Production: P2X Solutions commenced commercial production at Finland’s first green hydrogen plant in Harjavalta, utilizing renewable electricity sources such as wind power.
- Data Centre Expansion: Microsoft is developing a dozen new data centres in Finland, attracted by the country’s efficient energy infrastructure and abundant carbon-neutral power.
- Renewable Power Investments: Fortum agreed to acquire a 2.6 GW onshore wind development portfolio in Finland, reflecting the nation’s expanding renewable energy capacity.
Government Support and Economic Incentives
The Finnish government’s proactive stance on renewable energy further enhances the investment landscape. The European Commission recently approved a €2.3 billion Finnish scheme to support investments in strategic sectors and assist industrial companies in decarbonizing their processes. Additionally, Business Finland offers energy aid for projects promoting new technology and energy efficiency, with grants covering up to 15-20 percent of project costs, depending on the region
A Positive Outlook for Finland’s Bioenergy Sector
The confluence of declining energy wood prices, robust government support, and a strong commitment to renewable energy positions Finland as an attractive destination for bio-based energy investments. This favorable environment is expected to drive innovation, create jobs, and contribute to the nation’s goal of achieving carbon neutrality.
Read More:
- Reuters: Finland’s first green hydrogen plant starts commercial production
- Reuters: Nordics’ efficient energy infrastructure ideal for Microsoft’s data centre expansion
- Reuters: Fortum to buy renewable power portfolio for $9.4 mln
- Business Finland: Towards a low-carbon energy system through energy efficiency
- European Commission: Commission approves €2.3 billion Finnish State aid scheme to foster the transition to a net-zero economy
- LUKE: Demand for forest industry products slowly recovering