The National Wood Energy Technology Programme focused on developing the production technology and improving the quality of forest chips from logging residues and small-sized trees. In 1998, energy use of forest chips in Finland amounted to 0.5 million solid-m3. The target of the programme was to reach 2.5 million m3 by 2003. Thus, the annual use of forest chips was to increase five-fold in five years. The target was to be achieved primarily by increasing the production of chips from logging residues from regeneration areas because of their better cost competitiveness. In addition, technology was also developed to promote the energy use of small-sized trees from early thinning because of the great silvicultural benefits involved. Increasing the use of forest chips required further reduction of costs. The cost of chips made from logging residues was competitive against peat and fossil fuels in favourable conditions, but large-scale use presupposed recovery of forest fuels from more difficult stand conditions and over longer distances as well. The programme also aimed to develop quality control and storage of wood fuels. The quality of chips can be seen as a cost factor, since the energy obtained from the chips, emissions and reliability of delivery all depend upon fuel properties. Quality improvement was not confined solely to forest chips. It is just as important for the process residues from the forest industry. For this reason the scope of the programme also included bark, sawdust and other solid wood residues from the forest industry that are suitable for fuel.