While international markets for woody biomass emerge, growing consumption of wood chips for energy in Denmark is leading to increasing import. With improved competitiveness and unquestionable environmental benefits, domestic wood chip supply is preferable, but measures must be taken to make the supply chain more cost efficient. One of the major contributors to the delivered costs of wood chips is transportation, which is highly determined by the geographical location of forests and energy plants. This paper presents a method based on continuous cost surface mapping using raster-based geographical information systems (GISs). The national wood chip resources have been mapped and for selected bioenergy plants the costs of transporting the annual fuel demand have been modelled using cost distance functions, supply curves and sensitivity analysis. Hence a geographically determined relation of cumulative wood chip resources and their average costs was established. The results may be used for socio-economically sound resource allocation, optimal plant fuel mix, and planning of future energy plants.