Bioeconomy and circular economy – ecological sustainability and financial benefits
Wood forms the foundation of the Finnish bioeconomy. It is a renewable raw material, and the know-how of wood processing is at a high level. The annual growth of Finnish forests is over 100 million m3. The use of forests involves issues related to industries’ raw materials as well as biodiversity and climate issues which has spurred a lively debate about the use of forests both in Finland and internationally. However, it is worth noting that the annual growth of forests in Finland exceeds their use, which means that Finland’s forest resources are continuously growing.
In the 2020s, wood and processed wood products can, in more diverse ways than before, replace products and fuels that speed up climate change or are otherwise harmful to the environment.
Considering the environment, it is sensible to maximise the use of side streams and minimise wastewater and air emissions. With the right technologies, side streams can be processed into sustainable products or used in energy generation. Watch more!
Bioeconomy and circular economy
In bioeconomy, renewable natural resources are used to produce food, energy, products and services.2 Bioeconomy is often considered to comprise of sustainable food production (yellow bioeconomy), the sustainable use of water ecosystems and services (blue bioeconomy), bioenergy and the use of forests (green bioeconomy).3
Products made from renewable raw materials, such as wood, are not completely unproblematic considering the climate if they are not consumed in a sustainable way. The circular economy responds to unsustainable consumption by extending the lifecycles of products by recycling products and reusing material and by otherwise setting up modern sustainable consumption patterns. In the forest sector, the principles of the circular economy are no novelty. The sector uses wood effectively and different stakeholders work together, for example, in the use of material flows, whereby process side streams that hold no value for its producer may end up as valuable raw material for someone else.
Trees bind carbon dioxide from the atmosphere
Trees and other autotrophic organisms are able to use light energy to convert water and carbon dioxide into oxygen and energy-rich organic compounds in a process called photosynthesis. In other words, trees bind atmospheric carbon dioxide, which then remains as carbon in the wood material. As the trees grow, the amount of stored carbon increases. That growth is called a carbon sink. As the tree finally decays at the end of its life cycle, carbon is partly released back to the atmosphere as carbon dioxide while part of it end up in the soil.
However, the natural carbon cycle can be prolonged by using wood to make materials and products. When carbon is being stored in products, it stays there and is released back to the atmosphere as carbon dioxide only when the product finally breaks down or is, for example, burned. For long-lived products, such as wooden buildings, this period may take a very long time.
Forest bioeconomy
In the forest sector, the expanding bioeconomy and the circular economy stand for growth and diversification. Wood is already being used in very diverse ways. It is used to make conventional well-known products, such as paper, board, timber and rayon, as well as certain lesser known products, such as ingredients of adhesives and paints, additives for the food and pharmaceutical industries and health products. In recent years, new technologies have helped to expand the already broad range of forest industry products. For example, wood can be used as a raw material for biofuels, in pharmaceutical or chemical industry, and in ecological fibres for the textile industry.
Circular economy is not a novel concept within the forest industry. For example, modern mills typically have optimized their chemical cycles, meaning the water and chemicals are being recycled and returned to the process for reuse. Furthermore, modern mills can transmit any excess energy to the electric grid and the biogas generated from the side streams can be used in transport or heating. The Finnish pulp mills are also energy efficient, partially because a significant part of our mills produce not only pulp but also board and paper. Therefore, the heat flows of pulp production and the heat of energy production can be utilised at the board mill. Novel innovations will further help circulate materials and energy even more effectively and to find more uses for them than before.
Read more about Metsä Fibre’s bioproduct mill
Financial figures
The forest sector, which includes forestry and forest industry, has historically played a large and significan role in Finland’s national economy. The sector covers roughly one third of the value added of Finland’s whole bioeconomy4. In 2023, the forest industry accounted for EUR 12.1 billion of Finland’s export of goods, corresponding to roughly one fifth (15.9 %) of total exports5. The forest industry has a considerable financial impact, as forest industry employs 38 400 people6 directly and 82 800 people in total when also the indirect jobs in other sectors are taken into account6.
High export volumes
Finland, small in size but large in relative forest area, is among the leading countries in terms of timber and paper product exports. The majority of Finland’s forest industry production is exported. According to Custom´s statistics, the product group “paper and paperboard” was Finland’s most significant export product group in 2023 with a value of EUR 5.9 billion5. The top ten of Finland’s most important export products include also pulp and sawn timber. Timber exports amounted to 1.9 billion euros and pulp to 2.6 billion euros.
Exports focus on Europe and Asia, where Finland’s largest individual export destination countries are Germany, China, and the UK.5
Future outlook
The future of the forest bioeconomy looks promising. Bioeconomy and circular economy diversify and strengthen the future outlook. Growing demand for wood-based packaging materials and the aim to replace plastics create markets for pulp, paper, and board reaching far into the future. Global megatrends, such as the growth of e-commerce are increasing the demand for packaging, for example. In addition, the rising standard of living in Asia creates more demand for tissue and other hygiene papers and the textile industry is seeking solutions from wood-based fibres to meet the growing need of sustainable textile fibres. Interest in wood construction is also increasing, and the sawmill industry is responding to the rise in demand for ecological building materials, both in Finland and globally.
