Finland’s Green Building Revolution
IMF News, November 2, 2021
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Bibliographic details
- Authors: Steven Dorst November
- Published: November 2, 2021
Overview
- Article title: Finland’s Green Building Revolution
- Author: Steven Dorst
- Date: November 2, 2021
- This article first appeared in the Fall 2021 issue of Finance & Development Magazine produced in conjunction with COP26.
- Central theme: Finland is substituting fossil-based chemicals and materials with renewable wood-based raw materials to produce goods, services, and energy as part of a broader climate strategy.
Finland’s wood-based bioeconomy
- Finland has 65 percent of its land covered by forests.
- The Forest Act mandates that four trees be planted for every tree harvested.
- Finnish companies are developing wood-based products across multiple sectors:
- Clothing
- Multistory buildings
- Packaging
- Sustainable fuels
- Battery production
- Biofuels to biomedical products (UPM)
Environmental benefits and carbon implications
- Wood-based products can be easy to recycle, biodegradable, and hypoallergenic.
- CO2 can remain stored in cut wood for decades and even centuries.
- Quote: “Replacing fossil fuels and materials such as plastic or concrete and steel used for building with wood and bio-based materials limits the carbon emissions to the atmosphere.” — Lotta Heikkonen, Ministry of Agriculture and Forestry
- Finland was the first country to introduce a carbon tax, in 1990, and has since cut greenhouse gas emissions by about a fifth.
- National goal: becoming carbon-neutral by 2035.
- Planned measures include deploying electric vehicles, phasing out fossil fuel heating, and creating carbon sinks to absorb and neutralize CO2 emissions.
Circularity and industry perspective
- Emphasis on a circular bioeconomy where products are bio-based, shared, reused, remanufactured, recycled, biodegrade, or are used for renewable energy. — Timo Heikka, Stora Enso Oyj
- Many wood-based products are made from production by-products and residues or from materials recovered after product use.
- Molecular wood-based biochemicals are highlighted as a key area for replacing fossil-based raw material components. — Jyrki Ovaska, UPM
Economic incentives and market development
- Growing market for wood-based products creates economic incentives for smart tree management.
- The combination of environmental and economic drivers is fostering innovation in wood-derived materials and applications.
Policy challenges and IMF engagement
- Although carbon emissions in Finland are already subject to significant pricing, additional measures are needed to achieve the 2035 emissions neutrality goal.
- The IMF is working with Finland on additional energy pricing and sectoral measures to help bridge the gap.
Caveats and applicability
- The wood-based approach may not be appropriate for all countries because of:
- Climate differences
- Trade-offs between agriculture and tree growth
- The Finnish example serves as a reminder to reconsider how natural resources can be harnessed to address climate change.
Source: Finland’s Green Building Revolution — Steven Dorst, November 2, 2021.