Bioenergy sector – towards a carbon-negative future

Bioenergy is renewable wood energy that originates in forestry and forest industry side streams. The bioenergy industry has linkages to the energy, forest, technology and transport sectors where it creates added value from biomass without compromising the forest carbon stocks. Primarily based on domestic resources, bioenergy produces 32% of Finland’s energy and is the largest source of renewable energy in Finland and the EU. Bioenergy has supported Finland’s energy system during crises of recent years and grown according to estimations of 10 – 20 % compared to 2019 by 2030. Notably, there are already 14 projects in Finland where carbon dioxide is planned to be captured, totaling approximately 1–1.5 MtCO2/a.

Current and target state

Bioenergy is a largely domestic renewable energy source, which makes it a natural substitute for fossil energy. Currently, bioenergy contributes to adjustable and energy efficient energy production e.g. through bio-based heat generation and cogeneration from side streams. If bio-based side streams were not commercially used, but instead left in the woods, new long-term emission sources would be created.

The operating environment of the bioenergy sector has changed significantly since 2019. Key changes include shifts in the security environment and the increased importance of security of supply, the weakening of Finland’s economy and the resulting tightening of public finances, increased demand for domestic energy wood and the resulting rise in energy wood prices, significant changes in perceptions of the size of Finland’s carbon sinks, the emphasis on electrification in energy investments planned for Finland, and the growing importance of the technical capture of biogenic carbon dioxide. In the current situation, bioenergy offers self-sufficiency and supports energy supply and security, which is prioritized higher than the cascading use of biomass in EU regulations.

There are already 14 projects in Finland where carbon dioxide is planned to be captured, totaling approximately 1–1.5 MtCO2/a. Removing carbon dioxide from the atmosphere does not require exceptionally expensive climate technology.

Main solutions

Major means for sustainably replacing fossil energy with biomass are side streams and recycled wood from the forest and the forest industry, transport biofuels and biogas. In the future, cogeneration of electricity and heat could also include a parallel fuel production and hybrid systems e.g. coupled with solar heat. Furthermore, the growing use of biomass with carbon capture technology provides opportunities to create low-carbon products and even a carbon-negative energy system.

Needs and requirements

To ensure the availability of wood energy, it is important to sustain competitive economic operating conditions for the forest and sawmill industry. In order to leverage the potential of agricultural biomass, increased cultivation of energy crops and short-rotation ligneous plants will require support programmes. Similarly, technologies for carbon dioxide removal require incentives. Funding should be directed in an ecologically efficient and cost-effective manner to measures and areas that provide the greatest benefit at the lowest cost.

In addition, Nordic cooperation in the capture, utilization, and storage of carbon dioxide should be increased through bilateral agreements with Norway, Denmark, and the United Kingdom. This will enable operators to transport and store carbon dioxide in these countries in accordance with the London Protocol.

Future and positive impacts

The Finnish bioindustry continues to grow its handprint impact and enable global emission reduction by exporting innovations such as bio-boilers and renewable transport fuels.

The global growth of bioenergy, especially the transition from traditional bioenergy to modern bioenergy, offers opportunities for Finnish companies and solutions. In the European market, there is strong demand and opportunities for Finnish equipment suppliers, particularly for industrial plants using biomass, biogas plants, and biochar plants, as well as for equipment and machinery related to the bioenergy supply chain. The demand for bioenergy in transportation is also significantly increasing in Europe. This growth is expected to continue in road, air, and maritime transport until 2040.The production of biochar is also currently scaling up significantly. By the end of the 2020s, Finland could have enough biochar production to enable the removal of 0.4 MtCO2/a of carbon dioxide.