Walking Through Earth’s Green Treasure: How Forests Help Build a Bio-Based Economy

 Is the forestry industry limited to traditional processes and products, or are there untapped opportunities yet to be found?

Written by mehrad moghtadaei

15 July 2025

We are entering an era in which bio-innovations are enabling sustainable breakthroughs. Achieving true sustainability requires a multidisciplinary approach, giving rise to the bioeconomy — an emerging sector that leverages state-of-the-art technologies and biomass to produce bio-based materials. By integrating technological innovation with the principles of the circular economy, by-products from one process can serve as feedstock for another. 

Forests, with their valuable resources, play a key role in supporting bioeconomy practices, and we will dive into the Finnish case further with Antti Kämäräinen, Market Development Director at Boreal Bioproducts.

Forests in Finland: The Legacy of Generations

Forests around the world are vital ecosystems and home to diverse forms of life. In some regions, however, the relationship with forests goes even deeper. In Finland, forests are an integral part of the country’s cultural and economic identity. Covering around 70% of the country’s land area, Finland is one of the most densely forested nations in Europe. Antti Kämäräinen told us how the Finns have continued to stay connected to the forests in today’s modern world: “Forests are an integral part of Finnish culture, with a tradition that spans centuries, making our forestry systems well-established and highly valued.”

Most of Finland’s forests are privately owned by individuals. For decades, forest owners have passed down knowledge and stewardship, creating a rich legacy for future generations. This legacy is also protected by national policy. The Finnish Forest Act, in place for over a century, lays the foundation for sustainable forest management. It mandates that for every tree cut, a new one must be planted, ensuring the forestry industry remains sustainable and environmentally responsible.

With such abundant forest resources, forestry is a core industry in Finland. It involves the planting, management, and utilisation of woodlands. Forestry has driven economic development for many years without competing with food production, as it does not require arable land.

Traditional forest-based products include paper, pulp, timber, and plywood. Since 95% of Finnish forests are certified by either FSC® (Forest Stewardship Council) or PEFC™ (Programme for the Endorsement of Forest Certification), trees are sourced directly from these certified forests through a highly transparent supply chain.

While traditional forest-based products are well-established in the market, they are increasingly being challenged for not being sustainable. This begs the question: Is the forestry industry limited to traditional processes and products, or are there untapped opportunities yet to be found?

A Novel Approach: Turning Waste into Value

Finland’s traditional forest industry has undergone significant transformation due to digitalisation, which has led to a marked decline in the demand for printed paper. Paper mills have been converted into carton board production, and pulp remains one of Finland’s main export goods. 

However, printed paper is a high-value product, and achieving similar value addition through carton board or raw pulp exports often requires producing nearly double the volume. This shift has prompted the industry to seek new innovations and sustainable applications for wood-based materials to maintain profitability and competitiveness in the global market.

This is where the bioeconomy offers a new perspective. It is about rethinking what has been left behind. Forest-based products generate significant by-products, such as sawdust and bark, which are often not fully utilised.

In Finland, only 40% of forest resources are used to produce primary products. The remaining 60% consists of by-products, which are frequently burned for energy. With by-products making up over half of the resources, more companies are looking for ways to create even more value from these residues.

The Forest-based Biorefinery: Processes and Products

One of the companies addressing the sustainability challenges of the forest-based industry is Boreal Bioproducts, founded in 2018 in Espoo, Finland. The company operates as a biorefinery, using its refinery to convert forestry by-products (biomass) into sustainable, cost-effective feedstock for industrial chemical manufacturers. Their process starts with fully sustainable input, mostly coming from the sawmilling and pulp industries: “We use existing side streams, so no trees need to be harvested to produce our ingredients and products. Also, all these inputs are traceable and come from certified forests, ensuring both environmental and operational standards are met.”

When the biomass input enters the facility, it is heated in water under pressure. This breaks down chemical bonds and dissolves key components such as hemicelluloses and lignin.

Once the soluble components are extracted, they undergo further refinement to separate and purify the materials. A key aspect of the process is that it is entirely water-based and free from chemicals. The end-products offer sustainable alternatives for various industrial applications, including coatings, binders, adhesives, and cosmetics.

 

Jaakko Pajunen, CEO of Boreal Bioproducts at the company's pilot production site

The process provides the company with the flexibility required to diversify its product portfolio. “Technically, we can extract lignocellulosic materials from any type of wood, but the specific fractions we obtain vary depending on the species,” Kämäräinen continued. “Our primary extract is hemicellulose, a polysaccharide rich in galactoglucomannan (GGM) extracted from softwoods like spruce. It has potential applications in industrial chemicals and even animal feed. We also obtain a small fraction of native lignin. On the other hand, hardwoods like eucalyptus provides xylan, a key ingredient in biofuels, paper, and bio-based chemicals.”

The company has commercialised four key products, with the most versatile being SpruceSugar™. This natural, GGM-rich, biodegradable ingredient is made from Norway spruce sawdust. It is COSMOS-approved (an internationally recognised certification for organic and natural cosmetics), making it ideal for global hair and skincare markets, thanks to its moisturising, UV-protective, and foaming properties.

In 2023, Ole Hyvä, a natural personal care brand, began using SpruceSugar™ in its new range of products, including shampoos and conditioners, bringing the ingredient to the consumer market for the first time. Beyond cosmetics, SpruceSugar™ also shows promise for use in applications such as coatings and adhesives.

SpruceSugar polysaccharides

Complexities of Being a Market Player

With over two decades of experience in forest-based product development, Antti Kämäräinen brings a grounded perspective to the challenges facing the transition to bio-based materials. Although the new wave of sustainable forest-derived products shows great promise, integrating them into established industrial systems is not straightforward.

“The biggest challenge we face is that the industries we are targeting have had over 100 years to optimise their processes, particularly for synthetic ingredients,” Kämäräinen said. “Every process has been tailored to these synthetic ingredients, so introducing new natural alternatives is not simply a matter of replacing one with the other.”

In Europe, there is growing interest in bio-based materials, but turning that interest into action has been difficult. Kämäräinen points to the broader context of economic and political uncertainties, which have made some industrial players more hesitant. “While the potential is recognised, moving forward will require substantial resources and investment,” he said. “Moreover, as we primarily work with intermediaries, strong demand from end-consumers is essential — and interest alone is not enough.” He believes that regulatory support could help bridge the gap between innovation and implementation. Consistent and clear frameworks would give companies greater confidence to invest in and adopt new technologies. For example, targets for renewable content in products and materials could help accelerate the transition to a bio-based economy.

Beyond regulation, Kämäräinen emphasises the importance of transparency in data sharing and creating a cooperative environment among market players: “Our story aligns well with market needs, especially around sustainability, but we often face a lack of transparency. Companies are understandably protective of their formulations, yet more shared feedback would help us improve and better tailor our solutions. What is being developed has real potential to enhance or even replace existing processes.”

Finally, timelines add another layer of complexity. In large corporations, development cycles are long — typically up to three years. For smaller companies, this is a real challenge, as they strive to stay agile and responsive. “There are no quick wins, and it is not about a ‘drop-in’ solution. The process requires resilience and patience at both organisational and personal levels.”

Strategic Partnerships: Driving Growth and Innovation

Boreal Bioproducts has been an industrial partner of Metsä Group, one of Finland’s largest forestry companies, since its early stages. Metsä Group, a community of 90,000 private forest owners, is the only Finnish forest products company with a corporate venture capital arm. In 2021, Metsä Group provided €2 million (£1.7 million) in funding for a pilot plant in Turku, Finland.

A year later, Boreal Bioproducts secured a €7 million (£5.95 million) CAPEX subsidy for FOAK (First of a Kind; the pioneering first implementation of a new technology), funded by Business Finland. This support is helping the company take the next steps in advancing its innovative biorefining technologies.

To further support growth, Metsä Group has allocated space for a demo-scale biorefinery near their sawmill, helping Boreal Bioproducts expand. By 2028–29, The company plans to process 23 kilotonnes of biomass into products annually.

Boreal Bioproducts is also collaborating with CMPC, a Chilean pulp and paper company, as a technology-licensing partner. “We are extracting side streams from their operations, and interestingly, it has been confirmed that our technology is suitable for the different wood species they use. We have already tested Radiata pine and eucalyptus.”

Looking Forward: What to Learn From the Finnish Experience?

Finland’s approach to forest-based products – valuing existing resources, optimising processes, and maintaining a long-term perspective – offers some key insights and lessons: 

1. Forestry by-products are already abundant, affordable, and globally accessible. 

In the EU alone, over 120 million tonnes of wood residues are available, with more than 15 million tonnes coming from sawmills. As these materials require no pre-processing, their potential is even greater.

2. In terms of process optimisation, components like hemicellulose and lignin have not been explored commercially to the same extent as cellulose. 

“Historically, the industry has focused primarily on cellulose, which makes up about one-third of wood’s composition. However, the remaining components present a world of new opportunities. While they are well studied in academia, their commercial potential is still largely unexplored.”

3. As technologies advance and awareness grows, forestry residues could support the production of a wide range of innovative, bio-based materials across industries. 

This shift could inspire a new wave of entrepreneurs focused on circularity and sustainability. With the right conditions — investment, regulation, and collaboration — forestry residues could become central to the transformation of the bioeconomy.

"“Coming from a corporate background, stepping into the start-up environment felt like a ‘wow, what now?’ moment. But I’ve never regretted it. The passion for what we can achieve—how we can replace synthetic, fossil-based materials—is what keeps me going.”
-Antti Kämäräinen

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