[en] Finland is enhancing its use of renewable sources in energy production. From the 1995 level, the use of renewable energy is to be increased by 50 % by 2010, and 100 % by 2025. Wood-based fuels will play a leading role in this development. The main source of wood-based fuels is processing residues from the forest industries. However, as all processing residues are already in use, an increase is possible only as far as the capacity and wood consumption of the forest industries grow. Energy policy affects the production and availability of processing residues only indirectly. Another large source of wood-based energy is forest fuels, consisting of traditional firewood and chips comminuted from low-quality biomass. It is estimated that the reserve of technically harvest-able forest biomass is 10-16 Mm' annually, when no specific cost limit is applied. This corresponds to 2-3 Mtoe or 6-9 % of the present consumption of primary energy in Finland. How much of this re-serve it will actually be possible to harvest and utilize depends on the cost competitiveness of forest chips against alternative sources of energy. A goal of Finnish energy and climate strategies is to use 5 Mm' forest chips annually by 2010. The use of wood fuels is being promoted by means of taxation, investment aid and support for chip production from young forests. Furthermore, research and development is being supported in order to create techno-economic conditions for the competitive production of forest chips. In 1999, the National Technology Agency Tekes established the five-year Wood Energy Technology Programme to stimulate the development of efficient systems for the large-scale production of forest chips. Key tar-gets are competitive costs, reliable supply and good quality chips. The two guiding principles of the programme are: (1) close cooperation between researchers and practitioners and (2) to apply research and development to the practical applications and commercialization. As of November 2002, the programme consisted of 35 research projects, 35 industry projects and 15 demonstration projects, inclusive of the completed ones. The participation of researchers and practitioners in joint projects has strengthened the research capacity and promoted networking amongst research organizations in the field of wood energy in Finland. Furthermore, researchers have been able to identify and meet the practical needs of the industry, and joint projects have facilitated the dissemination of research results to practical forestry, forest industry, energy enterprises and machine manufacturers. During the first three years of the five-year programme, the use of forest chips increased from 0.5 Mm' to 1.3 Mm'. The average increase was thus 270 000 m' per annum. If the official goal of the Action Plan for Renewable Energy Sources is to be achieved, an increase of 400 000 m' is required in each year of this decade. The biomass resource exists. The combustion capacity of the present and planned heating and power plants is sufficient to absorb practically all competitively priced woody biomass available. As a result of the recent technological development, even stump and root wood can be used by large power plants equipped with modern fluidized bed technology. Considerable progress is taking place in the technology of chip production, e.g. the successful CRL system based on bundling of residues and crushing at the plant. Nevertheless, the production of chips rather than combustion technology still remains the real bottleneck for the utilization of the biomass potential of the Finnish forests. The main barrier is the high price of chips. Even worse, the fall in costs of production in the 1990s is supposed to reverse. Consequently, it is of great importance that the support for the research, development and commercialization of forest chip production technology should continue after the Wood Energy Technology Programme ends in 2003. For example, Tekes has recently expanded the scope to the smallscale production and combustion in a new sub-programme that will last till the end of 2004. The parties involved in the forest chip business were interviewed in order to determine the constraints on growth. The survey indicates that many barriers remain, but that they are becoming less problematic. However, as the demand for forest chips increases, availability starts to cause concern. In addition to developing technology and reducing costs, non-technical barriers must also be addressed in order to encourage forest owners, forest machine entrepreneurs and chip producers