As pointed out before, bioenergy is becoming a mainstream energy alternative. But, while the business structure for bioenergy utilization is well tested and has proven efficient to this point, a number of issues need to be addressed as the expansion of bioenergy systems is contemplated. Such issues refer to the availability of biomass resources, the type of services demanded and the best form to provide them utilizing bioenergy, as well as the policies and institutional base needed to ensure that biomass will remain an attractive source of energy.

Further development of the biofuel base can be effectively achieved in the short — and medium-term based on the existing biomass potential. According to Lonner et al., (1998), the potential supply of biomass in terms of forest fuels, waste and imports within a feasible cost range are greater than the foreseeable demand within Sweden. Although this study provides an indication of the resource availability, the validity of a study focused on Swedish needs only may be questioned. Truly, Sweden has been a forerunner in the use of modern biomass technologies, but the whole European Union is contemplating bioenergy options. Thus the resource availability should be analyzed within a broader context. The trade with biofuels is increasing with major streams from the Baltic countries and Russia to Scandinavia and the Northern parts of Europe. However, with increasing demands from different countries, competition for biofuels is likely to increase.

The next leap in the use of bioenergy in Sweden will most certainly be in combined heat and power production (CHP). In this area, Sweden is actually behind Finland and Denmark. The large availability of electricity from nuclear power plants in the past decades has allowed low electricity prices on the market, providing a disincentive for new CHPs. Also the structure of the tax system and the environmental legisla­tion in Sweden have played a role in the development observed. However, the enlargement of the power production capacity in Sweden shall count heavily on CHPs. Given the present policies and tax structure, for example to curtail greenhouse gas emissions, these CHPs are most likely to be fueled with biomass. Meanwhile, the penetration of biofuels in the transport sector shall proceed at a lower speed until perhaps a breakthrough is reached in about ten years.

When it comes to development of the biomass resource base in the next ten years, we can single out four major issues that Sweden needs to address.

• Trade with bioenergy technology, know-how and biofuels

The internationalization of the bioenergy sector leads to increased trade with biofuels, while also improving markets for bioenergy equipment and know-how. The challenge is to understand the underlying conditions and incentives behind existing and potential trade patterns to be able to exploit the trade in bioenergy — related products in an effective way.

• Transnational energy companies

The challenge is to understand the structure of decision-making, and the strategic considerations of emerging transnational energy companies so that they can be made proactive in promoting bioenergy options.

• Integration of bioenergy with other socioeconomic sectors

Successful bioenergy projects integrated with other sectors and functions are needed in order to achieve a general support for bioenergy from society at large. The challenge lies in facilitating the creation of a wide cluster of actors that can develop and manage complex bioenergy projects.

• Decreased tax advantage

As bioenergy increasingly becomes a major supply source of energy, the reasons for strong tax advantages decreases. The challenge lies in the development of bioenergy systems that are resilient to more competitive conditions.