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Energy subsidy threatens supply of pulp wood

Oct 19 2010  An energy subsidy for small-diameter trees that has been proposed by the Finnish Ministry of Agriculture and Forestry threatens to distort the timber market and could lead to a decrease in wood processing, according to the Finnish Forest Industries Federation.

Taxpayer money should not be used to subsidize the combustion of processable pulpwood, the Forest Industries Federation writes in a press release.“When the drafting of the new subsidy system started last summer, the government promised that subsidies would not steer industrial wood into combustion. The government must hold on to this promise, when it establishes the energy subsidy for small-diameter trees,” says Anders Portin, head of the Finnish Forest Industries Federation's Forests and Environment division.The Ministry of Agriculture and Forestry proposes to make the energy wood subsidy available for all first-thinning forestry locations in the future. Up to now, the subsidy has only been granted for harvesting locations that consist of trees that have a diameter of less than 16 centimeters.

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