## Finland’s Green Building Revolution

_IMF News, November 2, 2021_

## Source details

**Canonical URL:** [Finland’s Green Building Revolution](https://www.imf.org/en/news/articles/2021/10/27/110421-finlands-green-building-revolution)

## Other formats

- [Markdown version](/en/news/articles/2021/10/27/110421-finlands-green-building-revolution/index.md)
- [Structured JSON version](/en/news/articles/2021/10/27/110421-finlands-green-building-revolution/index.json)
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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.*

---


## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Finance & Development Magazine](https://www.imf.org/external/pubs/ft/fandd/index.htm)
- [Finland and the IMF](https://www.imf.org/en/Countries/FIN)
- [Fiscal Policies for Achieving Finland’s Emission Neutrality Target](https://www.imf.org/en/Publications/WP/Issues/2021/06/25/Fiscal-Policies-for-Achieving-Finlands-Emission-Neutrality-Target-460890)
- [Regional Economic Outlook for Europe, October 2021](https://www.imf.org/en/Publications/REO/EU/Issues/2021/10/20/regional-economic-outlook-for-europe-october-2021)
- [carbon tax](https://www.imf.org/external/pubs/ft/fandd/2021/09/five-things-to-know-about-carbon-pricing-parry.htm)
- [working with Finland](https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/07/30/IMF-Strategy-to-Help-Members-Address-Climate-Change-Related-Policy-Challenges-Priorities-463093)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2021/10/27/110421-finlands-green-building-revolution_