Forestry is a sunrise industry

When digitalisation first began to gain momentum, forestry was unfairly dubbed a sunset industry. At the heart of the industry’s problems was the dwindling demand for print paper and newspapers in the West, which resulted in overcapacity and the closing down of the oldest paper mills.

The consumption of other wood-based products – tissue paper, packaging, biofuels and goods based on forestry by-products – increases all the time. The slowing down of the growth of the Chinese market has not affected demand for tissue paper and packaging, as the Chinese do not want to compromise their comfort of living and digitalisation continues to increase demand for high-quality, smart packaging.

The hope of Finland’s bioeconomy

From the perspective of our national economy, forestry has become Finland’s leading export industry, and we have only just begun to utilise our ever-growing wood resources. Competitors in other countries have noticed this and begun to buy Finnish forest and plan new investments. The mood is high, as Finland’s forests are growing at a comfortably faster rate than felling, and the Government has chosen forests as the source of the country’s future growth.

New bio-based materials and products are being developed all the time, and they will play a key role in adding value to our export trade.

Replacing oil-based products by wood-based ones is a growing trend around the world. Pulp offers an environmentally sustainable substitute for cotton. With the help of nanofibers, it can be made as strong as steel and used to produce various bio-based chemicals. Considerable amounts of lignin can be extracted, which, according to VTT’s latest studies, can be used as a concrete plasticiser, to make chemicals, and as dietary fibres.

Towards using wood in biorefineries

After the Paris Agreement, Finland set itself the ambitious climate target of raising the percentage of renewable transport fuels to 40% by 2030. According to studies by VTT and the VATT Institute for Economic Research, the best solution for Finland’s national economy is to produce biofuels from wood and especially forest residues. This must be done in a sustainable way.

A hierarchy according to which wood materials are used so as to maximise added value is essential. Premium parts are used in construction and design products, less viable parts to make materials and chemicals, and the rest to produce energy. This means that all use of wood needs to take place in biorefineries. Using wood solely to produce energy does not make sense. Finland cannot meet its climate targets without integrated wood use.

More demonstration-scale plants

Now is the time to invest in the development of bio-based products. This will be possible at VTT’s new Bioruukki piloting centre, which aims to accelerate product development and piloting related to the bio-based circular economy. We also need more industrial-scale demonstration plants like Fortum’s bio-oil plant in Joensuu. The plant has successfully demonstrated a method to turn forest residues into bio-based oil by means of fast pyrolysis. The competitive advantage given by digitalisation also needs to be maximised.

The public sector needs to support the industrial sector in taking bolder and faster steps towards developing value-added bio-based products. Without these steps, the sunrise will not reach Finland but will only shine in the East. For example, Japan is already planning a sizeable investment in the development of products based on nanocellulose.

Finland has the means to do well, but more urgency is needed, or the potential for adding value will be lost to other market players.

Kari Larjava

Executive Vice President

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