The United Nations Food and Agriculture Organization says using more energy from wood could cut greenhouse gases and reduce poverty.
High oil prices, the need for secure energy supplies, and worries about climate change are all increasing interest in bio-fuels, including wood.
But Tuesday's FAO report cautions that growing demand for the world's most important bio-fuel might also lead to deforestation and other problems if not managed in a sustainable way.
The FAO says using more wood for fires, or as a source of liquid bio-fuels, could raise the price of wood for other uses. Wood is already the dominant source of energy for about two billion of the world's people, particularly in developing nations.