Opportunities and challenges of forest bioeconomy

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1 Opportunities and challenges of forest bioeconomy Pekka Leskinen*, Elias Hurmekoski & Lauri Hetemäki *Head of Bioeconomy Programme, Professor European Forest Institute

2 Presentation outline 1. Main drivers and related concepts 2. Where are the possibilities and challenges? 3. An example: wood construction 4. EFI s bioeconomy research

3 Why bioeconomy? Major environmental problems such as global warming. Over consumption of natural resources. Rapidly increasing human population. Need for ( absolute) decoupling of natural resource use and environmental impacts from economic growth. (Forest) bioeconomy can be a part of the solution, but: It has to be economically, environmentally and socially sustainable. 3

4 Loiseau, E., Saikku, L., Antikainen, R., Droste, N., Hansjürgens, B., Pitkänen, K.,Leskinen, P., Kuikman, P. & Thomsen, M Green economy and related concepts: An overview. Journal of Cleaner Production 139: ENVIRONMENTAL ECONOMICS ECOLOGICAL ECONOMICS THEORIES BIO- ECONOMY BIO- TECHNOLOGY RENEWABLE RESOURCE CLEANER PRODUCTION RESOURCE EFFICIENCY ECO DESIGN WASTE HIERARCHY APPROACH RECYCLING REUSE REPAIR RECOVERY NATURE BASED SOLUTIONS GREEN INFRASTR. INDUSTRIAL ECOLOGY & CIRCULAR ECONOMY INDUSTRIAL SYMBIOSIS BIOMIMICRY PSS PRODUCT RENTING, SHARING, POLLING PAY Per SERVICE UNIT CONCEPTS APPROACHES ASSESSMENT TOOLS Environmental benefits Climate change mitigation Improvement of resource efficiency Reduction in fossil fuel dependency Reduction of air and water emissions Reduction in loss of biodiversity Economic benefits Improvement in economic growth, productivity and competitiveness Accelerated innovation, through correction of market failures in knowledge Social benefits Reduction of env. induced health problems and risks Increased resilience to natural disasters, commodity price volatility economic crises Job creation and poverty reduction Improved regional equality Improved access to environmental services & amenities Bioeconomy is a tool, but an objective! 4

5 Circular economy (Ellen MacArthur Foundation: Towards Circular economy, vol.1 ) Biological materials (left): Technological materials (right): More efficiency to bioeconomy from circular economy! 5

6 Markets Biggest changes for decades are taking place in European forest bioeconomy markets. Some old products stagnating, new innovative bioeconomy products rising (e.g. textiles, chemical industry, ). Urgent need for foresight studies on the market development: Hardy any existing/ongoing research. Environmental, economic and social consequences of the market changes?

7 Diversification of the forest sector Cross Laminated Timber (CLT) > 15 % average annual growth rate since 2007, despite the economic downturn! Dissolving pulp > Pöyry (2015) expects the global demand to double by 2030 Hetemäki & Hurmekoski (2016)

8 Substitution What is the environmental benefit, when renewable materials (e.g. timber) are replacing non-renewable ones (e.g. concrete, steel). Avoiding fossil CO2 emissions from manufacturing and using these products. Substitution coefficients can have significant impact on CO2 balance of forestry, especially in the long run. High uncertainties and unknowns: especially new forest biomass based products.

9 Intelligent forest bioeconomy Ecosystem services (e.g. bd, carbon sinks) Production possibility frontier 2015 Tradeoffs Production possibility frontier 2030 To move from 2015 to 2030 frontier requires maximizing synergies and minimizing trade-offs Bioproducts (e.g. wood products, bioenergy)

10 Intelligent forest bioeconomy enables the move to higher production possibility frontier. Tools: circular economy, resource efficiency, substitution, new products, forest management,... 10

11 Case example on the possibilities of forest bioeconomy: Wood construction

12 Wood construction markets Traditionally used in single family buildings, especially in the Nordic countries. Increased use also in large-scale construction: Multi-storey residential buildings Office buildings Schools Hospitals Industrial and sports halls, etc. Metla building, Joensuu

13 Environmental benefits of wood Substituting wood for more energy intensive materials avoids larger fossil fuel consumption and consequent CO2 emissions. Trees sequester CO2 in forests, and store carbon in wood-based products. For each ton of wood products used instead concrete, there is an average emissions reduction of 2 tons of CO2 (Sathre & O Connor 2010; see also Hurmekoski 2017)

14 What wood construction could mean? When assuming 100% market share of all buildings in Europe with 50% chare of wood of building mass, this implies a 3.5% reduction of total EU CO2 emissions (Hurmekoski 2017). In addition to wood construction, reducing the impacts of other building materials such as concrete and steel are needed

15 Conclusions Forest bioeconomy has interesting opportunities in different sectors such as: Construction, textiles, plastics, chemicals, Challenges but also possibilities in terms of sustainability: Biodiversity loss, climate change mitigation including substitution, Take challenges seriously, maximise synergies.

16 Strategic bioeconomy topics at EFI The future demand and supply of forest products, forest biomass and ecosystem services, and their implications for sustainable forest management as well as for afforestation and plantation forestry. Sustainability impact assessment and monitoring of forest-based products and services value chains. The future markets of increasingly diversified and cross-sectoral forest-based products and services as a result of socioeconomic and policy changes. The role of innovation and digitalization, and policies affecting sustainable bioeconomy development

17 Thanks!