"Wood grows through God’s hand and no further energy is needed to produce it," said its president, Michael Prince zu Salm-Salm.

One-third of Germany is covered with forests despite it being the European Union’s most populous country with the biggest industrial economy.

Germany is Europe’s leading timber producer, and Salm-Salm said standardized wood pellets can be produced from vast numbers of small or deformed trees which are thinned from forests to allow growth of better quality timber.

Salm-Salm underlined that rotting wood releases the same amount of CO2 - which is stored while a tree grows - as does burning the wood to produce heat.

"This means burning wood is CO2 neutral," said Salm-Salm. Carbon dioxide, or CO2, emissions are widely believed to be a cause of climate change.

Heating systems fuelled by wood pellets have been installed in 70,000 German buildings in recent years. The technology - which is more expensive than oil or gas burners - is subsidized by the German government.

The sector’s growth has been explosive, starting with just 800 units nationwide in 1999 and growing to 27,000 units in 2004.

Numerous factories that produce wood pellets have opened in Germany in recent years, including the market leader, German Pellets, based in the eastern Baltic Sea city of Wismar.

German Pellets’ CEO Peter Leibold said new technology for burning pellets produces minimal ash and is as easy to operate as a conventional oil or gas system. He said enough pellets for an entire winter are blown into a basement container and then automatically transported to the burner.

"Germany could provide 100 percent of its winter heating from wood," Leibold said. (Source: German Foreign Ministry, using www.dw-world.de material)