Although advances have been made in combustion efficiency in large-scale woodchip furnaces, less experimental results are available at the <20 kW range. Compact feed systems, as well as optimized grates and combustor chambers, continue to represent a challenge for the wider use of low-cost wood chips. This study describes the design and testing of a small-scale woodchip furnace that operates at a range of 9-18 kW. The efficiency test takes account of the feedstock Eucalyptus nitens, with three moisture contents and the combination of different air excess (λ) and primary/secondary air ratios. The results reveal a maximum of combustion efficiency of 85% for the low moisture content sample (16%) at λ=1,5 and 82% for samples with 29% and 40% moisture content, at λ= 2,0 and 2,1 respectively. The integrated heat exchanger proved to be highly efficient by reducing gas temperature by up to 69% prior to its exit.