Total biofuel consumption in Lithuania amounted to 3.3 million m3 in 2001 (Department of Statistics to the Government of the Republic of Lithuania, Statistics Lithuania 2002) which generated some 7.3 TWh of energy (Ministry of Economy of the Republic of Lithuania, Energy Agency 2002). Biofuels were mostly used in the form of firewood, in addition to being used as sawdust briquettes, peat and other primary solid fuels. The large majority of the biofuels, about 90 per cent, were used for heating the households. The rest was used in commercial and public services, industries and other minor applications. Of the total, only a very small portion was used in district-heating plants (Energy balance 1999, Statistics Lithuania 2000). As mentioned before, the utilization of biomass for district heating is recent and started first in 1994.

Of the residues generated in sawmills, half goes to households, some 17 per cent are used in boiler houses, 17 per cent are used internally in the sawmills and 13 per cent goes to pulp and board industries. When it comes to the evaluation of total wood waste potential, the figures are less trustworthy. In any case, for strategic purposes, technical and economic availability for collection and transportation to boiler houses or densified woodfuel production plants needs to be considered together with the introduction of new practices and construction of new infrastructure.

It is important to notice how market forces are rapidly leading to new attitudes and practices. One interesting development is the increasing production of wood pellets and briquettes. Figure 7.1 illustrates this development in the last few years. From a very small production in the early 1990s, briquette and pellet production have expanded very rapidly. Most of these products are exported to Germany, Denmark, Sweden and Norway. In the local market, the price of pellets is about half of what it can reach in export markets even if prices have doubled since 1994. Thus raw materials that were simply being wasted before have now found a competitive market as a result of market forces and changing energy policies in Europe.

In principle, the expansion of wood-based industries tends to generate more residues, thus there should be no need for conflict among different users. However, competing uses for waste from processing industries, including producers of densified fuels, board factories and pulp producers, leave no optimism for large amounts of residues to be left for heating plants. Truly, the wood-processing industry in Lithuania will have to be restructured to be able to compete in open European markets, but this will also lead to a larger internal use of residues to dry the products. All in all, expansion of logging activities and general restructuring and efficiency improvement of sawmills shall result in an increase between 10 and 20 per cent only in the amount of residues generated from wood processing in the near future.

Thus, to achieve sustainability in the supply of wood fuels, especially in con­nection with conversion of oil — and coal-fired boilers in district-heating systems to biofuels, wood fuels supplied directly from forests will be very much needed. A significant shift towards greater utilization of wood-based energy will also require modifications in present policies including taxes and subsidies on energy sources. Careful attention needs to be paid to avoid potential conflict of interests between agricultural and forest activities, as well as wood-based industries in general.