Although wood is the oldest form of energy, it has recently gained new prominence, according to Phil Clements, project manager for the Murray- Riverina Private Forestry Development Committee.

"In Australia, the potential for wood and forest residues to be used as bio-fuels has to be considered seriously," he said.

Mr Clements said rising prices for fossil fuels, the increasing dependency on energy imports from insecure regions, and the effects of climate change were challenges society and policy makers were tackling by various measures.

"It is highly likely forest plantations will become an important source of fuel for energy generation that will help to achieve targets relating to the supply of renewable energy and climate change," he said.

"Currently, most of the wood harvested and removed from Australian forests is used for industrial processing purposes, where it generates substantial added value as construction timber, interior finishing products, furniture, paper, cardboard and packaging products.

"The other ‘product’ looming as a significant participant in the timber market is energy."

Mr Clements said the use of wood for bio-fuels would have major implications for the forest sector as the volume demands and economics associated with an energy product may, in time, start to impact on and influence the way plantations are harvested and managed.

In a global context, using the European Union as an example, renewable energies accounted for only 6.5 per cent of energy use (in 2005).

The targets are 12pc by 2010 and 20pc by 2020.

Wood fibre provides 80pc of the biomass component used to generate that energy.

Wood fibre produces wood alcohol or methanol, which is the simplest of the alcohols.

It can be used in a variety of engine types, as it combusts cleanly and has relatively low emissions in well-tuned engines.

Alternatively, it may be hydrated to produce the benign dimethyl - ether gas, an ideal substitute for diesel.

Methanol made from wood in a well-organised and structured production system is nearly carbon neutral, producing about 20 grams of carbon dioxide per vehicle kilometre, compared to the current range of 140 to 180 grams per kilometre for the Australian vehicle fleet.

Mr Clements said some initial research had suggested a biomass - based economy that produced liquid fuel, some biomass electricity and carbon offsets would require about two hectares of land per person.

"Using the Australian economy growth rates (anticipated by Treasury’s Intergenerational Report) this means a potential plantation estate of 50 million hectares by 2050 could be used," he said.

"Given the current plantation estate stands at around two million hectares, an expansion of this magnitude would obviously result in a huge change in the rural landscape.

"Tree plantings of this scale would not be without their issues, but tree farming needs to be accepted as conventional as other crops and livestock, as a form of agriculture."

Contact Phil Clements, 0407 272 375, pandac@bigpond.net.au