The forest-based sector in Finland

Forest industry is a major contributor to well-being in Finland

The success of the forest industry is important for Finland, as forest industry products account for about a fifth of Finland’s exports. The industry is also a significant employer, especially in regional areas. It employs about 42,000 people directly and about 150,000 Finns indirectly.

There are 49 pulp and paper mills and over 200 industrial sawmills, panel factories or other wood product companies. Total industrial use of wood is around 67 million m³ in Finland annually. Almost 80% of wood-sale revenues go to private individuals. Forest owners’ income is some Euros 2 billion annually.

The forest industry’s existing products will continue to be the basis for business operations for years to come, as new generations of paper, packaging and wood products are continuously developed. New bioeconomy products and new business will be created alongside existing products. The bioeconomy generates new companies, jobs and prosperity.

Forest resources in Finland

Finland’s forests grow by 110 million a year. Every year, our forest growth exceeds annual drain (harvesting volumes and natural mortality). Thus, our forest carbon stocks are also continuously growing. Increased growth is the result of active forest management.

In addition to the Finnish Forest Act, the Nature Conservation Act and other legislation, Finland’s forest economy is directed by a long-term action plan: the National Forest Programme 2015. It aims to promote forest use that takes economic, social and ecological needs into consideration.

Forest industry products contribute to resolving global climate, energy and environmental challenges

Forest industry offers ecologically sustainable products that are manufactured from a renewable raw material. Wood-based products provide alternatives to emission-intensive materials such as steel, cement and oil. The circular bioeconomy is the guiding principle for using wood sustainably. 

Wood construction has developed into an industrial-scale business. Finland has a long tradition in wood construction and broad expertise in the sector. Wood construction and products slow climate change because trees bind atmospheric carbon dioxide, which is stored as carbon, first in the tree trunk and then in buildings, for up to hundreds of years. Combinations of wood and other construction materials are increasingly used to replace oil-based raw materials. One of the main research and innovation areas for the forest-based sector is to produce wooden high-rise buildings and systems for building.

The world’s packaging markets are growing fast due to sectors such as global online shopping, for example. Packaging manufactured from wood is recyclable and does not contribute to waste mountains. Replacing fossil-based plastics in packaging materials and, at the same time, being able to have similar properties in wood-based materials, is one major driver for the development of packaging and using wood in new ways. Also, efforts are being put into developing new features for packaging, such as adding intelligent materials.

The global demand for softwood pulp is growing alongside the global rise in living standards, particularly in Asia. High-quality pulp from northern softwood fibre is used as a raw material for paper, tissue paper and paperboard. New solutions using pulp in composite materials (combining wood fibres with other materials) can be used in buildings or interior design, for example.

Different tree parts are used as effectively as possible in the manufacture of various kinds of products. Wood-based products can be recycled and reused as raw material for new products and are finally employed in the generation of bioenergy. Bioenergy is mostly generated as a by-product of the wood processing industries. About two-thirds of renewable energy in Finland is related to operations in the forest industries.

Other interesting areas for research and innovation are in biochemicals, medicinal products or textiles. All these areas are of major interest for using wood in new ways. Digitalization is also a very interesting area for the forest-based sector, including in forestry. As well as gathering better data, the emphasis is to make greater use of the data in decision making.

Investments in the Finnish forest industry are growing

There are several investment projects recently finished, underway or in preparation. The biggest investment in the history of the Finnish forest industry (with a value of Euros 1.2 billion), is the new bioproduct mill in Äänekoski in central Finland. It began operations in the second-half of 2017, and reached its nominal capacity in August 2018. The Äänekoski mill is the first next-generation bioproduct mill in the world. In addition to high-quality pulp, it produces a broad range of bioproducts, such as tall oil, turpentine, lignin products, bioenergy and bioelectricity, process steam, district heat and bark-based solid fuel.