THE North-East's growing biomass sector could be worth more than £75m a year to the regional economy by 2015, according to a new report.

It suggests that by then, today's annual contribution of just under £40m could have risen by 90pc - and created more than 2,000 new jobs.

The research was carried out by Northwoods as part of the region's NEWHeat project, backed by One NorthEast and the Forestry Commission.

It suggests that in economic terms, biomass could become the most important solid fuel for heating.

Its role in helping to reduce fossil fuel carbon emissions is increasingly recognised by central, regional and local government, private businesses and environmental groups.

Many are also beginning to look at biomass as a cost-effective method of heating.

David Clubb, report author and project director of Northwoods, said there had been little research in to the value of biomass to the UK.

He said: "It is important that the value of the sector to the region is laid out in straightforward economic terms, in order that the right policy and strategy can be developed to support its continued growth."

The region has a number of projects working to support the growth of the sector.

These include NEWHeat, which is funded by One North- East to build demand for woodfuel heating technology from businesses.

The UK's first dedicated wood fuel expo, Ignition 09, will take place at the Sage, Gateshead, next year.

One NorthEast also approved £1.2m of European Union and Defra funding from the Rural Development Programme for England, to help small land-based and forestry enterprises develop the infrastructure and skills they need to move into the biomass industry, build supply chains and meet demand as it continues to grow.

The Forestry Commission and Northwoods are also working with the private forestry sector to increase the amount of wood it produces.

The research into its economic value is thought to be the first of its kind in the UK and is already being used in the development of national policy.

Ian Williams, One NorthEast's director for business and industry, said biomass was a young, growing market with organisations and consumers looking for alternative methods of heat and power as energy prices rise.

He said: "At a time when finding ways to supplement income and move into new markets is particularly important for small businesses, biomass will provide opportunities for some - especially in rural areas."

Brendan Callaghan, Forestry Commission regional director for North-East England welcomed the research and said the commission strongly supported One NorthEast's recent investments in the sector.

He said: "The findings confirm what many in the forest industry have known for some time - that there is considerable potential to increase the use of wood fuel to help boost the economy and meet the region's renewable energy targets.

Mr Callaghan said it was important that woodlands were managed to help maintain their environmental, social and economic values.

The research also highlighted that in the North-East:

● at least 4,000 tonnes of wood - worth about £220,000 - are already being harvested each year for use in small biomass boilers;

● about 60,000 tonnes of wood worth £1.2m is being harvested each year for use in large boilers;

● investments in the small-tomedium scale biomass sector through projects such as NEWHeat are those likely to provide the strongest economic drivers for future growth.