Luonnonvarakeskuksen tutkija Eugene Lopatin arvioi Venäjän biotalouden tulevaisuutta blogissa: What is the future of bioeconomy in Russia?

In October 2014, a new law allowing biodiesel and bioethanol to be used for transportation was approved in Russia. Oil price reduction, the costs of the Crimean crisis and the large outflow of capital have caused a reduction in the 2015 Russian state budget. In contrast, companies exporting wood-based products had large revenues due to weak rouble. Their costs inside the country were almost the same as before but the value of sales doubled. In the forestry sector, sawmilling and production of pellets for export gained highest revenues. The owners of companies in these industries are still surprised by the high revenues and are crazy about deciding whether to buy a second helicopter.

During September to December 2014, I visited north-west Russia for the project “Utilisation of Finnish forest energy know-how and technology in Russia”, to meet with key decision makers. In the Republic of Karelia, there are plans to reconstruct several boiler houses. I noticed that sources of energy other than coal were not even considered for those plans.

However, one private investor from Moscow is finalising a boiler house in Suojärvi that uses peat and wood chips, utilising Finnish technology. The export of wood chips as a fuel from the Republic of Karelia to Finland is still very profitable.

Also in the Arkhangelsk region, many boiler houses have switched from coal and oil to wood pellets and chips. The costs for wood-based local fuels in this region were 23% lower than for coal and oil, which are not available locally. Instead of dumping waste wood in illegal sites, the government provided subsidies for collection areas for waste wood.

Considerable possibilities for cooperation

The positive experience of the Arkhangelsk region was copied by the Komi Republic. The government paid the costs for planning and constructing collection areas for waste wood. In 2014, the direct costs of production of pellets and fuel briquettes were compensated from the regional budget. Due to the availability of coal and oil in the region, there is a clear understanding that wood-based energy production is feasible in areas more than 100 km from a railway.

There has been significant interest in developing forest-based energy after the governor of Komi visited Metla with a group of ministers in 2012. One power plant that uses bark and wood residuals has been bought from Finland and just started operating on 21 January 2015, providing green heat and electricity for Syktyvkar, the capital of Komi.

During my meetings with decision makers I recognized the considerable interest for cooperation, especially now that budgets are reduced. The lack of technology and know-how is limiting the development of bioeconomy in the regions of Russia. For example, in Komi, they think that wood chips are a very unreliable energy source due to high moisture content and high price. The experience in Finland is totally different.

More use for low-quality wood

If the price of oil remains around the current low level, local economic problems will force a switch to renewable sources of energy, especially in areas where oil and gas are not available. Russia has 83 billion m3 of wood resources, but wood harvesting in 2013 was only 0.23% of the total amount of resources. Most wood resources in Russia are inaccessible, and the forest inventory is out of date for 74% of the territory. Our studies using remote sensing and modelling showed that it will be impossible to avoid a deficit of high-quality wood in several regions by reducing the harvesting age. To develop the forestry sector, low-quality wood must be utilised.

There is a demand for wood utilisation technologies in Russia, mainly from private investors. In spite of the relatively high costs of the Finnish equipment and know-how on biomass utilisation due to weak rouble, the efficiency and reliability of Finnish solutions are valued by the potential investors. From my point of view, the necessity to reduce energy costs will be the driving force in the development of the bioeconomy in Russia. But there are still open questions on what kind of cooperation Finland can offer in the long-term and short-term perspectives.