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Biomass Surpasses Oil to Become Sweden's Number One Fuel

Wood Resources International LLC recently reported that biomass in Sweden now generates 32% of all energy. Whilst still supported by large subsidies currently, the huge reallocation of investment and research into delivering more viable renewable alternatives has the objective of making the "green" energy sector ultimately more competitive than gas, oil and coal. This objective will be supported as non-renewable energy becomes more expensive to produce and more expensive once the price includes a cost for contribution to green house gas emissions.

Sweden is one of the countries making the greatest progress in this switch to biomass. Its goal is to have renewable energy reach 50% of total energy consumed by 2020 and in addition, the country aims to be totally independent of imported fossil fuels for the transportation sector by 2030.

The implication for forest owners in Sweden is that wood processing by products (such as sawdust and wood chips) and pulp logs from the forest now have two viable market alternatives - the pulp and paper/reconstituted panel market, and bio fuels. This increased competition in the market place is increasing the price of fibre driving the price of pulp logs to new highs.

The implication for New Zealand forest owners is less immediate although we are already seeing purchasers of wood fibre such as Nature's Flame in Taupo increasing its wood pellet production significantly over the next few years. Of more importance, however, is the growing trend, globally, towards renewable energy. Whilst it won't happen overnight, it is a reasonable assumption that as non-renewable energy becomes more expensive and technology increases the viability of utilising the stored energy in wood, forest owners will have increased options to market their fibre and maximise their returns from harvesting.