The biofuel market inside Russia is currently week and limited mainly by firewood for heating in rural areas (about 325 TWh/year), and is not expected to grow within, at least, the next decade. The two major reasons for this are:

■ negative trends in Russia’s rural demographic situation leading to considerable decrease of population, as well as of industrial and economic activity in these areas,

■ low internal prices for fossil fuels that make biofuel production technologies unattractive for potential consumers and unprofitable for potential investors,

■ high world prices for oil, that in present-day transient economic situation in Russia make any technologies, other than oil extraction, primary petroleum products production and transportation, unattractive for potential investors,

■ intensive development of the gas pipeline network results in substitution of coal and wood, traditionally used for domestic and municipal heating, by natural gas.

The share of all renewables (biomass, solar, wind, geothermal, small hydro) in power and heat consumption was only 0.3% in 2000 and, even according to the optimistic scenario, was not expected to exceed 1.7% (i. e., 65 TWh/year) by 2010 [7]. It is only 7% of biomass resources of the European part of Russia.

Still less optimistic perspectives for biomass internal consumption in Russia for the coming years are in the field of use of biofuels in transport. Estimations made by the EU experts show that with the current biofuel technology level they can be price-competitive with petroleum derivatives at about 65 Euro per one barrel of crude oil. Therefore a substantial economic and legislative support of the state is needed to promote biofuels use in the transport segment. In Russia, such support programs are just in phase of initiation today, and a long period of time will be needed before the first perceptible results of their implementation are reaped. That is why the situation today will still remain rather favourable for those EU biomass market operators who decides to gain a foothold in this region.