Germany’s Bundestag has approved amendments to the country’s Biomass Ordinance that will restrict subsidies for electricity generated from industrial-quality roundwood, including sawlogs, veneer logs and pulpwood. The changes will apply to new biomass power plants and existing facilities seeking renewed support under the Renewable Energy Sources Act (EEG), while previously granted subsidies will remain unaffected.
The decision, adopted on 12 November 2026, aligns Germany’s biomass support framework with the EU’s Renewable Energy Directive III (RED III). It aims to prioritise the use of suitable timber for products and industrial processing rather than electricity generation.
Which wood categories will face subsidy restrictions?
Under the amended ordinance, sawlogs, veneer logs and other roundwood suitable for mechanical or chemical processing will generally no longer qualify for new EEG support when used to generate electricity. The restrictions also cover stumps and roots harvested from forests.
The definition of industrial-quality roundwood considers characteristics such as tree species, dimensions, straightness and knot density, which determine whether the wood can be processed mechanically or chemically.
Wood-processing residues, including industrial residual wood, will remain eligible for support. The amendments therefore distinguish between timber that can be used as an industrial raw material and residues that are more appropriately directed towards energy production.
The changes also bring the definition of industrial-quality roundwood closer to the wording of RED III. The Bundestag removed an explicit reference to the panel, pulp and paper industries from the original government draft.
Exceptions linked to energy security and local industry
The amended rules retain exceptions where restricting the use of certain wood categories for energy generation could conflict with energy supply requirements or local industrial conditions.
Support may remain available where the use of the wood is necessary to safeguard Germany’s energy supply. Exceptions also apply where local industries lack the quantitative capacity or technical ability to use the forest biomass in a way that delivers greater economic and environmental value than energy production.
These provisions can cover certain wood harvested following documented forest damage, subject to the conditions set out in the ordinance. Wood qualifying under the exceptions will not be treated as industrial-quality roundwood for the purpose of the EEG support restrictions.
The Bundestag also amended the rules for plants generating electricity from forest biomass without producing heat. Such facilities will generally be excluded from support, with an exception for plants located in regions covered by the EU’s Just Transition Fund.
The government’s original proposal had included an exception for electricity-only plants using biomass carbon capture and storage (CCS). The Bundestag removed this provision from the amended ordinance.
Around 150 biomass plants approaching the end of EEG support
The German government expects the changes to affect a relatively limited number of facilities. According to the parliamentary committee report, Germany currently has approximately 742 solid-biomass power plants with a combined installed capacity of around 1,611 MW.
Around 150 of these plants, representing more than 500 MW of capacity, are expected to reach the end of their 20-year EEG remuneration period between 2025 and 2028. They will then be able to apply for follow-on support under the revised framework.
The government has not specified how many of these facilities currently use industrial-quality roundwood. The amendments are therefore expected to affect only a subset of plants seeking renewed support rather than all existing solid-biomass facilities.
Industry associations welcome flexibility, NABU raises concerns
The amendments have received support from several German forestry and wood-industry organisations, including the German Sawmill Industry Association (DeSH), the forest owners’ association AGDW, the Family Businesses Land and Forest (FaBLF) group and the Wood Energy Association (FVH).
The organisations welcomed the decision, arguing that the revised provisions follow RED III without introducing additional national requirements. They also said the amendments take forest and market conditions into account and provide greater flexibility in the use of timber.
Environmental organisation Naturschutzbund Deutschland (NABU), however, criticised the changes. It argued that linking eligibility to forest and market conditions could weaken the principle of cascading wood use, under which timber should be prioritised for material applications before being used for energy.
NABU’s bioenergy officer, Eric Häublein, said that decisions on whether wood can be burned should not depend on whether a sufficiently profitable market for the material exists at a particular time. The organisation has called for an end to EEG subsidies for electricity generated from wood.
Bioenergy Business Analysis
Germany’s revised biomass support rules reflect a broader policy debate over the role of woody biomass in the energy transition. The amendments seek to direct timber with higher potential value as an industrial raw material towards material uses, while retaining support for wood-processing residues and allowing exceptions where energy security or local market conditions justify energy use.
For the solid-biomass power sector, the most immediate implications will arise as existing plants reach the end of their 20-year EEG support periods and seek follow-on remuneration. The extent of the impact will depend on the feedstock mix used by those facilities and whether they qualify for the specified exceptions.
The amended ordinance must now be formally adopted by the German government. It will enter into force on the day after its publication in the Federal Law Gazette.
