According to the European Commission, wood already accounts for approximately 80% of the biomass used for renewable energy.
And the multiple uses of wood make forests a key factor for the rural economy and employment, it believes.
Forests cover more than 155 million hectares (37%) of the EU27's land area and a further 21 million hectares is covered by other wooded land.
However, the Commission believes there is a clear potential to intensify forests' energy utilisation as only up to 70 % of the annual forest growth being harvested, with some 42% being used for energy.
In addition, wood burning is considered to be largely carbon neutral if forests are cultivated in a sustainable way, making it an environmentally-welcome alternative to oil and coal in rural areas.
Another advantage of biomass is that it may be directly stored and drawn upon for use at any time, unlike wind or solar electricity that need to be consumed directly or converted in order to be stored.
Forest bioenergy set for increased CAP support
While forest policy is primarily a national competence, the EU Forestry Strategy and Action Plan, adopted in 2006, stressed the role of forestry in the context of rural development.
The EU's main instrument in the field of forestry is the European Agricultural Fund for Rural Development (EAFRD), which is part of the second pillar of the Common Agricultural Policy (CAP).
The fund already includes measures that can be used to support bioenergy from forests, and the European Network for Rural Development (ENRD) which looks after the implementation of the bloc's rural development programmes has a Joint Thematic Initiative for Forestry.
The initiative includes forest biomass for energy generation as one of its three specific topics, placing a particular focus on heating at local scale.
The Commission proposal to reform the CAP for the post-2013 period, to be tabled early next month, is expected to include more measures on forest within the EU's rural development policy and have measures available for member states who wish to prioritise forests and renewable energy production.
Current EAFRD measures can be used, for example, to support small-scale processing of wood (chips, pellets) in micro-enterprises. Small companies can also get support to produce renewable energy from forest biomass for local electricity and heating.
Getting supply chains up and running
Looking forward to the future CAP reform for 2014-2020, policymakers are looking at how best to use scarce EU funding to support forests as a source of bioenergy.
Juha-Matti Markkola, an official at the Finnish National Rural Network, told EurActiv that the priority should be to get the supply chains up and running in order to "guarantee the supply" of woody biomass to power plants.
Nearly 80% of Finland is covered by forests and the country is at the forefront when it comes to using wood biomass for energy generation. Markkola said local communities in Finland are already using small-scale thermal power stations that use wood chips to heat schools and communal buildings all over the country.
But this is only possible thanks to extensive investments in developing and setting up the supply chains that are essential for the use of forests for energy. "You need someone to get the wood out of the forests, another one to transport it to the plant and yet another entrepreneur to run the plant," Markkola summarised.
Markkola suggests channelling EAFRD funding to support groups of enterprises involved in the wood bioenergy supply chain. In that respect, he underlines the importance of supporting process innovations that would enhance the supply chain's efficiency.
But technical innovations are important as well because wood harvesting conditions can sometimes be challenging, he said, referring to difficult terrains such as swamps, wetlands or mountainous areas.
Communication, training and advisory services to forest owners regarding bioenergy potential are also badly needed, he added.
For Markkola, the current overarching policy challenge of sustainability and climate change represent "a big potential for rural areas". Forest bioenergy is "a big business" for rural areas he said, as the supply chains bring jobs and money to rural communities.
And depending on the regions, he said the price of wood fuel is already competitive with other conventional forms of energy. This is true in particular in areas which otherwise would be dependent on heating oil, he added, referring to the rising price of the fossil fuel.
