Energy questions are receiving significant amount of attention in the Baltic States, particularly energy conservation and the use of renewables aimed at increasing

Note: Both alternatives include handling of the industrial assortment; the forest fuel is extracted, chipped at roadside and transported 15 km to a heating plant.

R=using manual tools;

M = using motor chain saw with felling handle. l€ = 3.45Lt

Source: Andersson and Budrys (2002) security of supply. In fact, energy intensity in Lithuania is three times higher than the EU average and a potential for more than 30 per cent increased efficiency has been identified. Most of this potential improvement exists in the household sector. (Klevas and Antinucci, 2004).

In Lithuania, most sources of financing for renewables are focused on tax reduc­tions and guarantees for energy saving investments (BASREC and Nordic Council of Ministers, 2002). As candidate member to the EU, Lithuania was entitled to receiving financial support from Structural Funds, together with Latvia and Estonia. The Lithuanian Energy Institute participated in a project to promote energy efficiency and renewables in the preaccession phase (Klevas and Antinucci, 2004). Lithuania is now a full member of the EU and has adopted the EU directive on renewables. Lithuania’s targets include 7 per cent renewables by 2010 and the decommission of its nuclear power plant. Regional programs, for example to develop bioenergy options may provide an important complement to top down energy strategic plans, while also attracting other financial sources through bilateral or multilateral cooperation.

More specifically, the Baltic Sea Region Energy Co-operation, BASREC, created within the EU in 1999, addresses energy issues in the Baltic. The Nordic Council of Ministers and BASREC developed the Bio2002Energy project with the purpose to gather overall information of bioenergy prospects in the Baltic Sea Region (BASREC and Nordic Council of Ministers, 2002). Some of the major overall conclusions include:

• Bioenergy still need financial support to be viable due to high investment requirements;

• Joint implementation, in the modes defined under the Kyoto Protocol, will serve as a major drive for bioenergy projects in the region in the coming years;

• Harmonization of energy and environmental taxes should be pursued to provide good competitive ground for bioenergy-related companies;

• The development of energy crops should be promoted based on regional know­how and experience and in face of new options to the agricultural sector;

• Coordination of actors in various sectors such as environment, agriculture, forestry and energy is needed to minimize costs of fuel procurement, utilize resources more efficiently and guarantee the sustainability of ecosystems.

When it comes to promoting renewable energy technologies in the EU, member states have applied different strategies to reach their targets and, though some instruments have proved more successful than others, none of them can be said to be particularly superior (Reiche and Bechberger, 2003). Thus integration into the EU does not bring automatic answers when it comes to renewable energy strategies, bioenergy included. There are plenty of experiences in neighboring countries to serve as starting points, but there is still need for a national policy focused on the particular potential and conditions of the country.

The project described here has helped to indicate the existing potential for bio­fuel production in Lithuanian forests, and to point management practices that can contribute to harvesting biofuels efficiently. There is no doubt that the country can count on a large biomass supply, which offers a great resource base for bioenergy options. Targeted incentives and a strong institutional framework are now needed to guarantee a stable development of the demand side. Only then can the country’s potential be fully realized and bioenergy systems mature on a sustainable basis.

The increasing utilization of biomass in district-heating systems has contributed to creating a continuous and more concentrated demand for biofuels while also helping demonstrate applications and various benefits of bioenergy. However, we should keep in mind that, even at the European level, the future of district heating systems and their role in liberalized markets vis a vis gas networks, for example, are not regulated, and none of the EU directives consider district heating systems in particular (Grohnheit and Mortensen, 2003).

One strong motivation for support of bioenergy from the political side is obviously the fact that the use of biofuels creates employment for farmers, forest workers and entrepreneurs in plant operations. In fact, the importance of these activities for rural development and living conditions in the countryside should not be underestimated. Employment is also created in the equipment manufactur­ing industry. For a country that is strongly dependent on energy imports such as Lithuania, bioenergy offers a great opportunity to improve energy supply security based on national resources. In addition, the harvesting of forest fuels can be a driv­ing force for improved forest management, and thus enhancement of the economy of forest industries. For example, biofuel demand will favor various industrial assortments to the extent that many stands that are normally not managed today will be so thanks to the possibility of extracting forest fuels.

Energy development authorities at national and regional levels in Lithuania still lack the necessary information and knowledge to outline a strategy for woodfuel procurement. The methods applied at municipal level to evaluate the energy poten­tial derived from forests vary significantly and can sometimes be contradictory. Cooperation and coordination of efforts between forest and energy sectors are necessary to ensure the development of a strategy and the integration of forest fuel handling into common forestry practices.