Managing Competition and Bottlenecks

For the European forest industry, co-production of bioenergy is an attractive opportunity. The pulp and paper industry has the best potential to increase its use of bioenergy in Europe and this is already happening. At present, the regional capacity is only limited by competitive prices for solid biomass fuels. Thus policies and tax incentives are still needed.

The emissions trading scheme will tend to increase the market price for electricity. On the other hand, the scheme will impove the competitiveness of renewable energy sources in all European countries. The use of the other Kyoto mechanisms, Clean Development Mechanism and Joint Implementation, widen the possibility of emission reduction investments also including developing countries (Silveira 2005).

Energy-intensive industries in Europe have been particularly concerned about the impacts of higher electricity prices on their competitiveness. However, the various energy-intensive industries are in different relative positions with regard to their electricity supply, their access to alternative energy sources, and amounts of initial emission permits received in emissions trading schemes. For example, in Finland, the metal industry relies almost completely on electricity bought from the market, whereas the pulp and paper industry owns most of their electricity and heat supply, either directly or through shareholdings in power production companies.

The EU goals for bioenergy use are so ambitious that the availability and the price of biomass resources will be limiting factors for growth in the future. All the main biomass sources will be needed: forest resources, agricultural biomass, and biodegradable urban wastes. Several studies on biomass resources in Europe have been published but many questions remain concerning the biomass potentials, and the dynamics and sustainability that the bioenergy segment can achieve.