Science panels’ report: Finland can simultaneously boost added value and cut CO₂ emissions through smarter forest use
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A joint report by the Finnish Climate Change Panel and the Forest Bioeconomy Science Panel finds that Finland could create significant economic added value while improving climate impacts by using forest industry side streams more efficiently and by capturing, using and storing biogenic carbon dioxide. FinnCERES leaders Tekla Tammelin-Peltonen and Monika Österberg contributed to the report.
Finland has one of the EU’s largest potentials for capturing biogenic carbon dioxide. Large forest industry and bioenergy plants in Finland currently generate around 28 million tonnes of biogenic CO₂ each year.
The report examines scenarios up to 2040 in which the forest industry shifts towards more efficient and higher-value use of biomass. In the scenarios, side streams such as bark and lignin are redirected from combustion to higher-value products, wood-based energy use is reduced through electrification, and biogenic CO₂ is captured at scale from pulp, paper and bioenergy facilities. Captured biogenic CO₂ could be used to produce e-fuels and plastics through bioenergy with carbon capture and utilisation (BECCU), or stored permanently to create technological carbon sinks through bioenergy with carbon capture and storage (BECCS). The report also considers mineralisation in mine tailings as a potential domestic storage option. The solutions are assessed in relation to different harvesting levels, as climate targets increase pressure to reduce fellings to strengthen forest carbon sinks.
According to the scenario analysis, Finland’s supply of biogenic CO₂ would remain strong even if side streams were increasingly directed away from combustion and the annual harvest level fell from 74 to 64 million cubic metres. Finland could, for example, produce a significant share of the synthetic aviation fuel needed in the EU while also supporting national climate targets.
The report highlights that carbon dioxide utilisation could generate substantial added value, but would require major investments in CO₂ capture, new technologies and additional renewable electricity production. By contrast, redirecting bark and lignin into higher-value products could create significant added value with more moderate investments.
“Tannins from coniferous wood bark can replace carcinogenic chromium compounds in leather processing. The lignin derived from black liquor can be further refined into hard carbon for use in battery materials, for example, helping to reduce reliance on critical raw materials. In addition to bark tannins and lignin, the forest industry also has potential for many other higher value-added products”, says Tekla Tammelin-Peltonen, Vice-Chair of the Forest Bioeconomy Science Panel, VTT Research Professor and FinnCERES Flagship Scientific PI.
The report concludes that new bark- and lignin-based products, together with carbon capture and utilisation, could make it possible to maintain or even increase added value at more moderate harvesting levels. With the current production structure, however, a reduction in fellings of 10 million cubic metres would reduce the value added of the forest sector by EUR 0.9–1.4 billion annually.
“If new, higher value-added products are not introduced to the market, decreasing fellings would lead to a decline in the economic activity of the forest sector, to which the national and regional economies would have to adapt. In any case, decoupling from fossil fuel dependency requires the utilisation of biogenic carbon as value-added products and the refining of CO₂ into fuels and plastic raw materials,” says Tammelin-Peltonen.
Realising Finland’s biogenic CO₂ economy will require predictable investment conditions, EU regulation that creates stable demand, national support measures and a skilled workforce. The report also stresses that the carbon dioxide economy must complement — not replace — emissions reductions across all sectors and efforts to strengthen natural carbon sinks.
Link to the full report (in Finnish): Suomen ilmastopaneelin raportti 5/2026: Bioperäisen hiilidioksidin tulevaisuus Suomessa
