Economic efficiency of the energy wood chip supply chain from Russian Karelia to Finland

The development of modern cut-to-length forest harvesting techniques, the availability of nonindustrial wood resources, and Russian customs policy have created favorable conditions for the export of wood chips to biomass-based power plants in Finland. Cost of transportation is paramount to the financial feasibility of the bioenergy business, especially long-distance transportation costs. Therefore, the efficiency and costs of cross-border transportation of wood chips were analyzed. The results were compared with the efficiency and costs of transportation of wood chips of Finnish origin. Truck drivers working in the cross-border transportation of wood chips were also interviewed to determine the factors that affect the efficiency of wood chip transportation. The results showed that the highest transportation costs for an 80-km reference distance were those within Finland, at (sic)5.6/m(3) loose wood chips, compared to a cross-border route cost of (sic)3.5/m(3) loose wood chips. Thus, the proportion of transportation costs to the total supply cost was slightly higher in cross-border transportation (24%) than in Finland (23%) and in Russia (19%). Furthermore, bad road conditions on the Russian side, idle time at the border and the current working schedule of the border crossing point were recognized by truck drivers as the main factors that decreased the efficiency of cross-border transportation.