Kemera Supports and the Profitability of Small- Diameter Energy Wood Harvesting from Young Stands in Finland

Author

Aaron Petty and Kalle Kärhä

Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, 6-9, issue 42

Abstract: In order to speed up the production of small-sized thinning wood chips in young stands, the Finnish State provides financial incentives for the production of small-diameter wood chips. Financial support is provided according to the Sustainable Silviculture Foundation Law (Kemera). Currently (Summer 2008), the Kemera support provides subsidies for smallsized wood chips in early thinnings 7–10 €/MWh maximum in typical harvesting conditions (whole-tree chip removal 40–70 m3/ha, and average stem size of removal 10–40 dm3). Metsäteho Oy undertook a study on the total production costs of small-sized thinning wood chips with and without the Kemera supports. The results gave a clear indication that small-sized wood chips cannot currently be produced without the Kemera supports from young stands with typical harvesting conditions. If operating without the Kemera supports, the average stem size of whole trees harvested must be greater than 80 dm3, at the current price level of small-diameter wood chips in order for the harvesting of small-diameter energy wood from young stands to be economically profitable in Finland.

Keywords: Support policy; Costs; Small-diameter wood; Energy wood; Harvesting; Early thinnings.; Agribusiness; Production Economics (search for similar items in EconPapers)
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