There are hopes Tasmania will soon catch up to New Zealand, in developing large-scale wood pellet mills to process native timber waste.
The state's forest industry produces millions of tonnes of residues each year and the Tasmanian Government has called for expressions of interest from the private sector, to put them to good use.
Resources Minister Paul Harriss is pushing for biomass proposals, stating value adding in Tasmania is preferable to wholesale exports of woodchips.
Pellet retailer Rob Douglas said there was huge potential for native timber residues to be made into wood pellets for bio-energy.
"We're importing 40 per cent of our requirements at the moment because here we are in winter at peak demand [and] our pellet production can't meet that demand so we're importing from New Zealand," he said.
Mr Douglas has opened a small wood pellet mill with timber processor, Brett McKay, at Glenorchy.
It produces 1,200 tonnes of hardwood pellets a year, but there is already demand for 3,000 tonnes and he said that was only expected to grow.
"We built our pellet plant here just as a proof of concept, to show investors that it's viable and we've already proven that to the point where in the last two years, demand exceeds supply,"
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