The internationalization processes that affect the bioenergy segment more directly are reflected in (i) the development of markets for biofuels, (ii) definition of policies and actions to favor bioenergy options, and (iii) research and development.

Traditionally, biomass for energy has been harnessed and used locally, but trade in biofuels is, in fact, expanding rapidly, boosted by commercial opportunities. These opportunities are anchored in well-established systems and are on increas­ing demand. In Sweden, the imports of biofuels have increased from a volume corresponding to less than one TWh in the beginning of the 1990s to 6-8 TWh today. Further market development in the near future shall be strongly affected by national and regional policies.

Policy making reflects the internationalization of the bioenergy sector. Various EU directives deal directly or indirectly with energy issues, and some are particularly significant for the development of bioenergy e. g. directives dealing with energy taxation, waste incineration, combined heat and power production (CHP), and motor fuels (European Commission, 1997, 2001). Standards and specifications are also the subject of common projects within the EU, e. g. European standards for solid biofuels and for solid recovered fuels are being developed (see also Thran et al., Chapter 11). These standards aim at improving conditions for trading biofuels. The development of a common policy framework for the EU is also in line with international agreements such as the Climate Convention and Kyoto Protocol, and may gradually lead to common strategies and legislation for bioenergy.

Internationalization is also observed in R&D. The EU aims at a better coordina­tion of research and development as a means to make Europe more competitive, and this is being promoted through specific schemes to distribute EU research funds. It is believed that increasing complexity implies high costs for further developing bioenergy systems, and small countries such as Sweden cannot cope with the task alone. Obviously, such coordinated efforts find barriers particularly due to the large variation in the progress achieved by the various EU countries when it comes to understanding and using bioenergy systems.

Integration of bioenergy systems with other production processes A more rapid and effective development of bioenergy, to reach more volume and importance in the European energy matrix, and offer the reliability and cost effi­ciency commercially required, demands integration and coordination. The bioenergy sector needs to be more integrated with other segments of the energy sector, for example, as part of strategies to secure the energy supply, or as a means to make bioenergy a more competitive alternative.

Bioenergy can be better motivated when integrated with other business sectors and industrial processes. For example, there is a significant potential for synergies through increased integration with the forest industry (see e. g. STFI, 2000; see also the discussion in Chapter 7). Bioenergy generation companies need vertical integra­tion of the fuel chain to guarantee quality biofuels derived from waste handling and forestry activities. The sector also needs to forward integration in consumer markets in order to exploit the full potential and qualities of bioenergy. But there are barriers to such integration. For example, biofuel and bioenergy production are at the margin of core activities of most forest companies (e. g. Ling, 1999). Other non­technical barriers include issues related to the distribution of business ownership, as well as the sharing of responsibility for management and risks.

There is integration potential also with sectors such as waste management and rural development, which conventionally belong to other departments. Such integra­tion requires a coordination of policies, planning and development, and strategies for marketing bioenergy. This implies coordination of public and private actors from different business spheres. The experience of Enkoping provides an example of how this can be made possible (see Fact box 3.1). In fact, the potential to contribute to environmental benefits, new business opportunities and regional development while providing efficient energy services can be crucial in assuring continued support for bioenergy and further progress in this area.