INVESTMENTS IN THE WOOD WASTE MANAGEMENT SECTOR IN UKRAINE: CHALLENGES, INSTITUTIONS AND PRIORITIES

Abstract

It has been established that the commercial exploitation of forest resources and timber processing generate significant volumes of wood waste, the physical substance of which can be used to produce solid fuel products, as well as thermal and electrical energy. It has been substantiated that, in the context of wartime, deepening decentralisation, the completion of the process of forming a network of consolidated basic-level territorial communities, and the restructuring of the country’s energy balance, wood waste acts as a key determinant in ensuring the energy self-sufficiency of territorial entities. It has been determined that the development of wood waste management infrastructure is a prerequisite for establishing its utilisation for energy purposes. The increasing the efficiency of wood waste utilisation for energy purposes directly depends on the diversification of investment sources for projects to develop infrastructure for the management of logging residues and wood processing waste. Studies have shown that in 2025, compared with 2023, the volume of brushwood harvested by the divisions of the State Enterprise ‘Lisy Ukrainy’ (‘Forests of Ukraine’) increased by 20,600 cubic metres, which indicates an expansion of the resource base for the development of the bioenergy segment in the state forestry sector, provided that investment is secured for the utilisation of low-value and substandard timber for energy purposes. It has been demonstrated that the intensification of investment processes in the development of the wood waste management sector depends on the implementation of public-private partnership agreements, which will enable the attraction of local government budget funds into the solid biofuel production industry based on the utilisation of logging residues and wood processing waste. It has been established that the institutional prerequisite for forming closed cycles in the bioenergy sector and, consequently, for increasing the investment attractiveness of the production of wood-based fuel products is the formation of cluster structures involving permanent forest users, local authorities, private enterprises and engineering companies. It has been determined that the institutionalisation of instruments for direct and indirect budgetary support for the development of the electricity and heat generation industry based on the utilisation of wood waste will contribute to an increase in investment flows into the bioenergy segment of the state forestry sector, funded by power-generating companies and other business entities.