The Features of the Shadow Economy Impact’ on Biomass Energy Sector

Abstract

The shadow economy is a significant factor in impoverishing the economies of countries and unequal operating and competitive conditions distort the market economy system, as opaque parallel activities impoverish socially responsible business units. The biomass energy sector faces this risk because the biomass supply chain is not yet fully secure and balanced. The study conducted by the authors showed that the manifestations of the shadow economy in the biomass energy sector are possible in the biomass production and transportation sub‐sectors. Lack of digitization and poor resource management can lead to the problem of misuse of resources, which has non‐transparent economic activities. The evaluation methodology developed by the authors allows to investigate the directions of shadow economy in the biomass energy sector and to measure the possible extent of such activities. The measurements were made in order to compare the official activities of enterprises with the factors attributable to the shadow economy. This is also due to the lack of innovation and digital solutions. The application of innovative solutions would help to reduce the size of the shadow economy, which would increase the income of regions and the state, and reduce the level of poverty.