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Woody biomass is the largest source of renewable energy in Europe, and the expected increase in demand for wood for energy purposes was the stimulus for writing this paper. Opportunities to increase the supply of forest biomass in the short and long term are discussed, as well as environmental side effects of intensive forest management. Focusing on northern Europe, national estimates of potential annual fellings and the corresponding potential amounts, simulated by the European Forest Information Scenario model, are then presented, as well as reported fellings. For the region as a whole, there seems to be substantial unused biophysical potential, although recent data from some countries indicate underestimated annual felling rates. We argue that an economic perspective is lacking in the debate about wood production for energy purposes in Europe and harvest potentials, and we discuss the effects of biophysical capacity limits in forest yield from a partial equilibrium perspective. Using a larger proportion of the biophysical potential in northern Europe than at present will entail trade-offs with environmental and social values, which means that strategies are needed to protect and account for the benefits and costs of all forms of ecosystem services. [ABSTRACT FROM AUTHOR]