But a conference in Rotorua this week heard that there are some obstacles to achieving this.
The conference was told that there is a growing number of businesses switching to bioenergy, and new wood energy ventures are building capacity.
But further investment from the wood industry and the Government is needed.
David Reid, the general manager of industrial energy solutions at Energy for Industry, says the wood industry needs to grow its supplies of residue wood and build confidence in the product as a viable and guaranteed alternative to fossil fuel.
Mr Reid says the industry is shipping a lot of wood overseas and then importing much more expensive fossil fuels to fuel process industries in New Zealand.