Biomass market and trade in Norway: status and future prospects.

Abstract This paper gives an overview of bioenergy use, prices, markets and markets prospects in Norway. The current energy production based on biomass in Norway is about 50 pJ or 10% of the stationary energy consumption. About one-half is produced and used in forest industries. The main share of bioenergy used by households consists of firewood in stoves. The use of refined, solid biofuels in heat production is hampered by low coverage of water-borne heating systems and historically low end-user prices of electricity. Harvest levels in Norwegian forests are much below annual growth, implying that forest biomass resources steadily accumulate. Decreasing wood prices combined with rising prices of oil and electricity in recent year have improved competitiveness of solid biofuels in the heat market. Projections of future bioenergy use in Norway using a partial equilibrium forest sector model suggest that bioenergy use will increase in some market segments with the current price levels of electricity and oil. However, quite minor improvements of bioenergy competitiveness or increased energy prices may release substantially higher bioenergy use. A net increase in bioenergy use of 5 TWh (18 PJ 1 ) by 2010 is realistic, but requires public awareness of the opportunities in bioenergy technologies, as well as significant economic incentives. Wood stoves and replacement of oil-boilers in central heating systems show highest competitiveness, whereas district heating systems need higher energy prices or more subsidies to be competitive. Biomass for combined heat and power projects or domestically produced liquid biofuels seems to have limited competitiveness in the short term. On the raw material side, wood residues, and roundwood from pine and non-coniferous species represent the main potential, whereas spruce continues to be consumed by the forest industries. According to the model projections, imported biomass will take a significant share of the possible increase of wood consumption in Norway.