Sustainability Atlas
Food, Agriculture & Materials·12 min read··...

Deep dive: Sustainable forestry & biomaterials — what's working, what's not, and what's next

What's working, what isn't, and what's next — with the trade-offs made explicit. Focus on unit economics, adoption blockers, and what decision-makers should watch next.

In 2024, the global forestry and logging market reached $343 billion while the cross-laminated timber (CLT) sector exploded with growth rates between 14–20% CAGR. Meanwhile, over 457 million hectares of forest are now certified under FSC and PEFC standards combined—representing more than 10% of global forest area. These figures signal a profound shift: sustainable forestry and biomaterials are transitioning from niche sustainability plays to core infrastructure for decarbonizing construction, packaging, and materials sectors. Yet the path forward remains fraught with technical barriers, supply chain volatility, and regulatory fragmentation that demand rigorous analysis.

Why It Matters

The buildings and construction sector accounts for approximately 37–39% of global CO₂ emissions, with structural materials like concrete and steel contributing the lion's share of embodied carbon. Sustainable forestry and biomaterials offer a fundamentally different carbon calculus: trees sequester carbon during growth, and when that carbon is locked into long-lived products like mass timber structures, it represents durable carbon storage rather than emissions.

The stakes extend beyond climate mitigation. The UN FAO reports that global forest products showed recovery signals in 2024 after a 14% drop in 2023, with industrial roundwood removals rising 2% and international trade in wood and paper products showing modest growth. This recovery occurs against a backdrop of competing demands: 6.7 million hectares of pristine forest were lost in 2024 alone, with fire now exceeding agricultural expansion as the primary deforestation driver.

For decision-makers evaluating forestry and biomaterials investments, the core value proposition centers on three pillars: carbon sequestration at scale (each cubic meter of wood stores approximately 0.9 tonnes of CO₂ equivalent), reduced embodied carbon in construction (mass timber buildings demonstrate 25–75% lower embodied carbon than concrete/steel equivalents), and emerging regulatory tailwinds that favor certified sustainable sourcing.

Key Concepts

Mass Timber and Engineered Wood Products: Cross-laminated timber (CLT), glued laminated timber (glulam), and laminated veneer lumber (LVL) represent the engineering backbone of the sustainable forestry value proposition. CLT panels are manufactured by layering boards at perpendicular angles and bonding them under pressure, creating structural panels with strength-to-weight ratios competitive with steel and concrete. The 2024 International Building Code now permits 18-story mass timber buildings in the United States, unlocking urban density applications previously impossible for wood construction.

Forest Certification Systems: The Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) provide the primary verification frameworks for sustainable sourcing. As of 2024, FSC certification covers 160.7 million hectares across 89 countries with approximately 63,000 chain-of-custody certificates, while PEFC certifies approximately 297 million hectares—representing 71% of all certified forests globally. The distinction matters for procurement: FSC maintains stronger presence in tropical and developing regions with NGO backing, while PEFC dominates temperate and boreal regions with government-supported national systems.

Biomaterials and the Bioeconomy: Beyond structural applications, wood-based biomass feeds an expanding bioeconomy encompassing biofuels, biochemicals, bioplastics, and biocomposites. The broader biomaterials market reached $202 billion in 2025 and projects to $384 billion by 2030 at a 13.69% CAGR. Applications span medical implants, packaging substitutes, and industrial feedstocks, creating demand pull that intersects with sustainable forestry supply chains.

Carbon Accounting and MRV: Measurement, reporting, and verification protocols underpin the carbon value of sustainable forestry. Voluntary carbon credits for forest-based removals climbed 77% year-over-year through 2024, with forest carbon credits commanding 15% premiums above average carbon credit prices. The Integrity Council for the Voluntary Carbon Market approved new REDD+ methodologies in November 2024 with Core Carbon Principles labels, establishing clearer quality signals for buyers.

What's Working

Mass Timber Reaches Commercial Scale

The CLT market has crossed critical thresholds for mainstream adoption. Market valuations range from $1.0–1.9 billion in 2024 with projections to triple by 2030. The April 2025 approval of Seattle's "The Timber" project—115 units of multifamily housing—as the first CLT project qualifying for HUD 221(d)(4) federal financing signals institutional acceptance. Toronto's Limberlost Place demonstrated hybrid CLT/concrete design that saved 5,426 tonnes of CO₂ compared to steel-frame alternatives.

Production capacity is scaling rapidly: Timberlab opened a 190,000 square foot CLT plant in Oregon in February 2025, one of the largest facilities in the United States. KLH invested €10 million in 2024 to reach 100,000 cubic meters annual capacity in Europe. Element5 achieved 100,000 cubic meters capacity by H1 2025 following HASSLACHER Group investment.

Certification Coverage Expanding

The combined FSC/PEFC certification footprint of 457+ million hectares represents meaningful supply chain coverage. More critically, 45% of global timber supply now comes from certified sustainable sources, with 60% of logging operators having adopted sustainable practices. UK woodland creation jumped from 12,960 hectares in 2022–23 to 20,660 hectares in 2023–24, demonstrating accelerating afforestation in key markets.

Prefabrication Driving Unit Economics

CLT panels reduce construction time by 25–50% versus traditional methods through off-site manufacturing. This prefabrication advantage compounds: minimized on-site waste, reduced labor requirements, and improved quality control. The modular construction boom is accelerating adoption, with residential applications emerging as the fastest-growing segment at 12.34% CAGR.

What's Not Working

Supply Chain Volatility

Raw material volatility presents persistent challenges. Two Scandinavian pulp lines closed in 2025 due to timber price spikes, while bark beetle damage continues devastating Bavarian forests. The United States faces escalating tariffs on Canadian softwood lumber—34.45% as of late 2024, up from 14.5%, with potential additional 25% Section 232 levies threatened for Q2 2025. Russia's log export ban continues disrupting global supply chains and pushing prices upward.

Skilled Labor Constraints

Advanced timber construction requires specialized expertise that remains scarce. Survey data from 2023 indicates 43% of EU construction firms struggle to hire workers with advanced timber framing expertise. This constraint bottlenecks adoption even where materials and regulatory frameworks support mass timber construction.

Regulatory Fragmentation

Despite progress, building code frameworks remain inconsistent across jurisdictions. While the 2024 IBC permits 18-story mass timber in the U.S., local adoption varies substantially. Europe's EN 1995-1 and Canada's CSA O86 updates in 2025 streamline CLT approvals, but the EU Deforestation Regulation implementation was delayed to December 30, 2025, creating regulatory uncertainty for supply chain compliance. The EU Medical Device Regulation certificate backlog—4,873 approvals out of 14,539 applications in 2023—delays biomaterial product commercialization.

Climate-Driven Forest Loss

Wildfires present an existential challenge to forest-based carbon strategies. The 6.7 million hectares of pristine forest lost in 2024 underscores that sustainable forest management cannot be decoupled from climate adaptation. Fire now exceeds agricultural expansion as the primary deforestation driver globally, requiring integrated strategies that address both supply-side certification and demand-side fire resilience.

Sector-Specific KPIs

KPITarget RangeCurrent PerformanceNotes
Certified forest area (global)>500M ha by 2030457M ha (2024)Combined FSC/PEFC
CLT construction time reduction25–50% vs. traditional25–50% achievedPrefabrication dependent
Embodied carbon reduction25–75% vs. concrete/steel40–60% typicalProject-specific
Forest carbon credit premium>15% above average15% (2024)Quality verification critical
Timber supply from certified sources>60% by 203045% (2024)Supply chain transparency improving
Mass timber building height limit18 stories (IBC 2024)18 stories (U.S.)Jurisdiction-dependent

Key Players

Established Leaders

Stora Enso (Finland): A global leader in renewable materials with integrated forestry operations and mass timber manufacturing. Acquired Uruguay forests for vertical integration and completed prefab CLT school projects in France using automated coating lines.

Weyerhaeuser (United States): One of the largest private timberland owners globally, with extensive sustainable forestry operations across North America and growing biomaterials focus.

West Fraser Timber (Canada): Major softwood lumber producer with expanding mass timber capabilities, navigating tariff pressures through operational efficiency and market diversification.

UPM-Kymmene (Finland): Diversified forest products company with significant investments in biochemicals and biofuels derived from wood-based biomass.

Binderholz (Austria): European mass timber manufacturing leader with vertically integrated operations from forest to finished CLT panels.

Emerging Startups

Timberlab (United States): Opened one of North America's largest CLT manufacturing facilities in Oregon in February 2025, focused on scaling mass timber production for commercial and residential applications.

Element5 (Canada): Backed by HASSLACHER Group, achieved 100,000 cubic meter annual capacity in early 2025, positioning as a key North American mass timber supplier.

Kalesnikoff (Canada): Innovative mass timber producer leveraging advanced manufacturing technology to deliver custom CLT and glulam solutions for complex architectural applications.

Key Investors and Funders

Breakthrough Energy Ventures: Active investor in sustainable materials and low-carbon construction technologies, including mass timber and bioeconomy ventures.

HSBC Asset Management: Launched nature-based solutions funds targeting sustainable forestry investments with verified carbon credit generation.

The Nature Conservancy: Operates blended finance programs combining conservation objectives with sustainable timber production, demonstrating impact-first forestry investment models.

Examples

1. Limberlost Place, Toronto

This hybrid mass timber and concrete project by EllisDon and Acton Ostry Architects demonstrates the structural viability of CLT in complex urban contexts. The building saved 5,426 tonnes of CO₂ compared to a conventional steel-frame design—equivalent to taking over 1,100 cars off the road for a year. The project employed Canadian-sourced spruce CLT panels, supporting domestic supply chain development while achieving LEED Platinum certification. The project illustrates how hybrid approaches can address fire and seismic concerns while capturing mass timber's carbon benefits.

2. Stora Enso Prefab Schools, France

Stora Enso completed a prefabricated CLT school in Nantes, France in April 2024 using automated manufacturing processes that compressed construction timelines dramatically. The project demonstrated European supply chain maturity: panels manufactured in Austria were delivered with precision-applied coatings, enabling rapid on-site assembly. The school achieved near-zero construction waste and embodied carbon 60% below regional concrete school benchmarks. This model is now being replicated across French municipal building programs.

3. Seattle "The Timber" Multifamily Housing

Approved in April 2025 as the first CLT multifamily project to qualify for HUD 221(d)(4) federal mortgage insurance, The Timber represents a financing breakthrough for mass timber residential construction. The 115-unit project demonstrates that federal agencies will underwrite CLT risk at terms competitive with conventional construction. This precedent opens access to favorable financing structures that could accelerate mass timber adoption across U.S. affordable housing markets.

Action Checklist

  • Audit current materials sourcing for FSC/PEFC certification status and establish minimum certified content thresholds for procurement specifications
  • Evaluate building code frameworks in target jurisdictions for mass timber height limits and conduct fire/seismic feasibility assessments for planned projects
  • Map supply chain exposure to tariff-affected timber sources and develop contingency sourcing strategies for Canadian softwood alternatives
  • Establish relationships with mass timber fabricators early in project development cycles to secure production slots and optimize panel design for manufacturing efficiency
  • Integrate embodied carbon calculations into project cost-benefit analyses, quantifying carbon value at current and projected carbon credit prices
  • Develop workforce training pipelines for advanced timber construction techniques, partnering with trade associations and technical schools to address skills gaps
  • Monitor EU Deforestation Regulation implementation requirements for supply chain due diligence and documentation obligations

FAQ

Q: How does mass timber perform in fire safety compared to steel and concrete? A: Counter-intuitively, mass timber often outperforms steel in fire scenarios. Large timber sections char on the outside, forming an insulating layer that protects the structural core. Steel, by contrast, loses strength rapidly at elevated temperatures. Modern CLT buildings are engineered to maintain structural integrity for required fire-resistance ratings (typically 1–2 hours), and fire-resistant adhesives and encapsulation strategies further enhance performance. The 2024 IBC updates reflect this engineering reality by permitting 18-story mass timber buildings.

Q: What is the carbon payback period for a mass timber building? A: Mass timber buildings typically achieve immediate carbon benefits relative to concrete/steel alternatives—there is no "payback period" in the traditional sense because the embodied carbon is lower from day one. A typical CLT structure demonstrates 25–75% lower embodied carbon than equivalent conventional construction. The carbon stored in the wood (approximately 0.9 tonnes CO₂ per cubic meter) remains sequestered for the building's lifespan, which for commercial structures typically exceeds 50 years.

Q: How do FSC and PEFC certifications differ, and which should I specify? A: FSC and PEFC represent different governance models with distinct geographic strengths. FSC employs a multi-stakeholder approach with strong NGO involvement and maintains better coverage in tropical and developing regions. PEFC aggregates national certification systems and dominates in temperate and boreal regions, particularly with small and family forest owners. For most procurement applications, accepting either certification is appropriate, though specific project requirements or geographic sourcing may favor one system. Dual-certified operations exist where both standards apply.

Q: What are the main barriers to scaling mass timber in residential construction? A: Three primary barriers constrain residential mass timber adoption: supply chain capacity (fabrication lead times often exceed 6 months for large projects), financing familiarity (lenders require education on mass timber risk profiles), and workforce skills (specialized carpentry and engineering expertise remains scarce). The April 2025 HUD financing approval for Seattle's The Timber project addresses the financing barrier, while manufacturing expansions from Timberlab, Element5, and others are increasing capacity. Workforce development remains the lagging constraint.

Q: How do carbon credits from forest projects integrate with corporate net-zero strategies? A: Forest carbon credits can address residual emissions that cannot be eliminated through operational decarbonization, but quality verification is critical. The Integrity Council's November 2024 approval of new REDD+ methodologies with Core Carbon Principles labels provides clearer quality signals. Forest carbon credits currently command 15% premiums over average carbon credit prices, reflecting buyer preference for higher-integrity removals. Corporate buyers should prioritize credits from certified sustainable forestry operations with third-party MRV verification.

Sources

Topics

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