Renewable energy sources play an important role in the Finnish energy and climate strategies which are implemented partly through the Action Plan for Renewable Energy Sources. Enhancement of wood energy plays a key role in the plan. A special emphasis is given to forest chips produced from small-sized trees from early thinnings and above-ground and below-ground residual biomass from regeneration cuttings. The production goal of forest chips is 5 million m(3) solid (10 TWh) in 2010. The use of forest chips is promoted by means of environmental taxes, financial aid for investments, and financial support for research, development and commercialization of technology. In 2002, altogether 365 heating and power plants larger than 0.4MW used forest chips. The total consumption was 1.7 million m(3), the use of small houses and farms included. The growth of use is presently about 350000m(3) per annum, but reaching the official goal will require an annual growth of 400 000 m(3) during this decade. The consumption of roundwood per capita, 15 m(3) per annum, is in Finland 20 times as high as the average consumption of the EU countries, respectively. Consequently, residual forest biomass is abundantly available. The capacity of heating and power plants to use forest chips is large enough to meet the goal. However, users require competitive chip prices, good quality control of fuel and reliable supply chains, and new efficient procurement systems are being developed. The paper deals with the drivers of this development: support measures of the Government; strong support to research, development and commercialization of forest chip production from the National Technology Agency Tekes; advanced infrastructure for the procurement of timber for the forest industries-, positive attitude and active participation of the forest industries; the active role of leading forest machine and boiler manufacturers, and the possibility to cofire wood and peat fuels in large fluidized bed boilers so as to secure the availability of fuel in all conditions, stabilize the moisture content of fuel and reduce the emissions from combustion. (c) 2005 Published by Elsevier Ltd.