ANNOTATION: The potential markets for forest residues can be classified into four primary categories. This paper deals with each of these categories separately, and attempts to indicate some of the major influences which are expected to change the trend of forest residue utilization for each of the potential uses. Of the four major potential uses for forest residues, none offer any immediate prospects for large scale use. We can expect cyclical demand for residues to supplement the material supply to the pulp and paper industry. The rising cost of energy could generate the greatest potential demand for residues.