In theory, China has vast potential forest resources for production of energy, but utilization on an industrial scale has been negligible. We assessed the practical possibilities and barriers for a forest energy business in a case study in northern China. The specific objectives of the study were 1) to assess the availability of forest biomass for energy production, 2) to determine feasible supply chains, and 3) to estimate the biomass fuel supply costs. Based on the case study results, the stand-level removals of the intended feedstock were low and the supply costs were relatively high. Suggestions for increasing the raw material basis, lowering the costs and further research and development were given. We conclude that although the case study area may not be promising from the feedstock point of view, the development could be started with small steps and proven technology. In order to avoid expensive mistakes further research for transfer of know-how and technology is needed. (C) 2015 Elsevier Ltd. All rights reserved.