Wood, paper, and furniture

Authors: Malin Maurer, Andrés Rivas Parra, Valentina Prange
Last updated: October 2nd 2023

1. Definition

The following chapter explains briefly the most common terms and concepts regarding the wood-based industry.

1.1.  Definition of the industry

Forestry industry

There is no widely agreed definition for the forestry industry. However, all economic activities should be considered, which are related to manufacturing items and services from forests.¹ Lebedys, A. & Li, Y. Contribution of the forestry sector to national economies, 1990-2011, Forest Finance Working Paper FSFM/ACC/09. FAO, Rome (2014). However, a concise, comprehensive definition is the definition of the Swedish Forestry that is introduced below. Simultaneously, Eurostat also requires a definition to delimit its statistical studies and information. However, a description is adopted instead of the definition presented below.² Cook, E. Agriculture, Forestry and Fishery Statistics: 2020 Edition. Eurostat. https://ec.europa.eu/eurostat/web/products-statistical-books/-/ks-fk-20-001 [Accessed on 29.08.2023], (2020).

According to Swedish forest industries:

“Companies that use forests to provide the raw materials for their products and services are all part of the forest industry. This includes producers of pulp, paper, cardboard, packaging and biofuel. Similarly, sawmills producing all sorts of boards, planks, roof trusses and other prefabricated construction elements are also included”.³ Swedish forest industries. Swedish forest industry significance https://www.forestindustries.se/forest-industry/swedish-forest-industry/ [Accessed on 29.08.2023], (2016).

Wood-based manufacturing, according to Eurostat:

“The EU-27’s wood-based manufacturing industries cover a broad range of downstream activities that are categorized within four subsectors: the manufacture of wood and wood products; the manufacture of paper and paper products (which includes the manufacture of pulp); printing and service activities related to printing; and, the manufacture of furniture”⁴ Cook, E. Agriculture, Forestry and Fishery Statistics: 2020 Edition. Eurostat. https://ec.europa.eu/eurostat/web/products-statistical-books/-/ks-fk-20-001 [Accessed on 29.08.2023 (2020). .

A new definition is presented as a proposition owing to the absence of a broadly agreed definition: The forest industry can be defined as firms involved in producing and handling products or services directly or indirectly related to forest resources.

Sustainable forestry and Sustainable Forest Management

There is no commonly agreed definition for sustainable forest management (SFM) due to the diversity of forest types.⁵ FAO. Natural Forest Management https://www.fao.org/forestry/sfm/85084/en/ [Accessed on 29.08.2023], (2020). Three comprehensive definitions are presented as examples afterwards:

According to FAO:

“Forest management is the process of planning and implementing practices for the stewardship and use of forests to meet specific environmental, economic, social and cultural objectives. It deals with the administrative, economic, legal, social, technical and scientific aspects of managing natural and planted forests”. ⁶ FAO. Natural Forest Management https://www.fao.org/forestry/sfm/85084/en/ [Accessed on 29.08.2023], (2020).

According to UN Climate Change:

“[D]ynamic and evolving concept, which aims to maintain and enhance the economic, social and environmental values of all types of forests, for the benefit of present and future generations”. ⁷ UN Climate Change. Sustainable forest management https://unfccc.int/technology/sustainable-forest-management [Accessed on 29.08.2023], (n.d.).

According to the Second Ministerial Conference on the Protection of Forests in Europe:

“[S]ustainable management means the stewardship and use of forests and forest lands in a way, and at a rate, that maintains their biodiversity, productivity, regeneration capacity, vitality and their potential to fulfil, now and in the future, relevant ecological, economic and social functions, at local, national, and global levels, and that does not cause damage to other ecosystems”.⁸ Second Ministerial Conference on the Protection of Forests in Europe. RESOLUTION H1 General Guidelines for the Sustainable Management of Forests in Europe https://foresteurope.org/wp-content/uploads/2022/01/MC_helsinki_resolutionH1.pdf [Accessed on 29.08.2023],, (1993).

Furthermore, the terms sustainable forestry and SFM are often used as synonyms. However, they are probably disparate and call for further global agreements that cooperation and multilateralism can achieve.⁹ Boyle J. R. et al. Sustainable Forestry: Ecology and Silviculture for Resilient Forests. in 1st Reference Module in Earth Systems and Environmental Sciences (2016). It is proposed to adopt one of the terms only and define both as accurately as possible so they can be delimitated. Due to the lack of a global definition, a definition is aimed to be proposed in order to fill the gap:

Sustainable forest management can be described as management activities for all types of forests that consider sustainability aspects such as economic, environmental and social in order not to compromise the possibilities of future generations negatively.

1.2.  Economic importance

Wood products play a significant role in transitioning into sustainable behaviour due to the wide range of daily used articles and their low carbon production compared to non-wood items. On the other hand, increased production and consumption of forest products can lead to negative impacts if sustainability dimensions, like social and environmental, are not considered. Current outlooks predict an uninterrupted growth of manufacturing industrial roundwood, sawn wood, wood panels, paperboard and packaging over the following years. In terms of combating climate change, the forest-based sector can significantly contribute by storing in wood items, forest biomass and soil and substituting fossil-based greenhouse gas (GHG) -intensive articles, for instance. Moreover, the forest-based sector has the opportunity to reinforce the accomplishment of sustainable development goals like SDG 12 Responsible Consumption and Production, 13 Climate Action and 15 Life on Land.¹⁰ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022).

As Table 1 illustrates, the forestry sector contributed straightforwardly above USD 663 to the world gross domestic product (GDP) in 2015, 17 % more than in 2011. If total effects and other sectors were considered, contributions would achieve more than USD 1.52 trillion to national economies for the same period. The region with the loftiest generated value added was Asia, where the direct contribution reached 52 % globally. However, it is an estimation from 62 countries where 70 % of the forest areas contributed to 94 % of the world’s GDP.¹¹ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

Region	Direct contribution	Total contribution
Global	661 064	1 522 957
Asia	337 955	765 307
Europe	185 252	423 109
Americas	105 192	257 275
North America	59 165	155 735
Latin America and the Caribbean	46 027	101 540
Africa	22 468	48 296
Oceania	10 197	28 969

Table 1: Economic contribution to the world GDP by region in USD million (2015)

Source: Adapted from ¹² FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

As Table 2 reproduces, pulp and paper products are the subsectors with the most important direct contribution at about 31 per cent. At the same time, forestry and logging were responsible for the lowest indirect contribution, while furniture and manufacturing achieved the lowest direct contribution, as Table 2 illustrates.¹³ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

Subsector	Direct contribution	Total contribution
Global	661 064	1 522 957
Pulp and paper products	203 775	640 139
Solid wood products	160 482	574 236
Furniture manufacturing	129 328	350 016
Forestry and logging	167 480	329 455

Table 2: Economic contribution to the world GDP by subsector in USD million (2015)

Source: Adapted from ¹⁴ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

The forest industry significantly contributed to merchandise; its share was about 2.3 % of the total international trade in 2020. Harvest of industrial roundwood has decreased between 2018 and 2020, dropping from 2.07 billion mᵌ to 1.98 billion mᵌ. In 2020, the drop can be explained because of the negative effects of the COVID-19 pandemic.¹⁵ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022). Roughly 400000 firms were involved in the forest sector only in Europe in 2018, corresponding to about 20 % of the total manufacturing sector.¹⁶ Cook, E. Agriculture, Forestry and Fishery Statistics: 2020 Edition. Eurostat. https://ec.europa.eu/eurostat/web/products-statistical-books/-/ks-fk-20-001 [Accessed on 29.08.2023], (2020).

Employment in the forest sector

As Table 3 depicts, it is estimated that in 185 countries, roughly 33 million employees were formally and informally working globally in the forest sector between 2017 and 2019, representing about 1 % of the total workforce in the world. Moreover, 58 % of the workforce of the forest industry was involved in the manufacturing of wood and wood products. However, the number of employees decreased in forest-related jobs compared to the period between 2011 and 2013 due to automation, where about 39.5 million people accounted for the workforce for the sector. The forest sector has created the most workplaces in Asia, where roughly two-thirds of the total workplaces are. For 56 countries, roughly 7.7 million people were informally employed in the sector.

77 % of the forest-related workforce were informally employed in those countries. Informality is more important in developing countries such as Uganda, where 98 % of the forest-related workforce is informally employed. 3.2 million women were employed in the forest sector according to estimations for 69 countries, representing a participation of 23 % for those countries, which is lower than for men. Women are often involved in unpaid subsistence activities like collecting wood as fuel to cook. Nevertheless, it is said that informality could be even higher for the forest sector if more statistical information and data were available.¹⁷ Lippe, R.S. et al. Contribution of the forest sector to total employment in national economies – Estimating the number of people employed in the forest sector. Rome and Geneva, FAO and ILOFAO & ILO (2022).

Region	Number of countries	Total employment between 2017-2019 (in million)
Global	185	33 311.7
Asia	48	22 063.3
Africa	54	4 752.3
Europe	39	3 484.8
Americas	33	2 823.2
Oceania	11	188.1

Table 3: Global formal and informal employment in the forestry industry (2017-2019)

Source: Adapted from ¹⁸ FAO.The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

The COVID-19 pandemic was responsible for causing several severe economic consequences, like a decrease in the global economy of 3.5 %. At the same time, 124 million humans became extremely unprivileged, living with less than USD 1.90 a day. Furthermore, the world export of wood products decreased by 5.1 % and imports by 7 % in 2020. Reductions were followed by a recovery in the second half of 2020. Industrial roundwood production is projected to grow roughly 28 % to 2.5 billion mᵌ between 2020 and 2050. However, there is no scientific proof that an increase in forest degradation and deforestation was caused by the pandemic straightforward.¹⁹ FAO.The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

2. Sustainability impact and measurement

The chapter presents the most critical and positive global impacts on forests. It also covers the risks, importance, and causes of wood-based resource loss.

2.1.  Risk for forests and the importance of protection

Climate change is already causing negative effects on forests, such as forest fires, frequent pests, and increasing extreme weather, among other diseases. Forests have an immense potential for mitigating climate change by reducing, compensating and removing CO₂ emissions. Hence, forest protection from deforestation is important if climate change targets are to be met by 2050.²⁰ Cook, E. Agriculture, Forestry and Fishery Statistics: 2020 Edition. Eurostat. https://ec.europa.eu/eurostat/web/products-statistical-books/-/ks-fk-20-001 [Accessed on 29.08.2023],, (2020). Figure 1 illustrates forest losses worldwide in 2015, where millions of ha losses can be traced back to wildfires, extreme weather, insects, and pests.²¹ FAO. Global Forest Resources Assessment 2020 – Key findings. Rome (2020).

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Figure 1: Forest losses by wildfires, extreme weather, insects and pests (2015)

Source: Own figure based on²² FAO. Global Forest Resources Assessment 2020 – Key findings. Rome (2020).

More than 30 % of the world is covered by forest in 2020, where tropical and boreal regions are the most covered by forests at 45 % and 27 %, respectively, corresponding to 4.06 billion ha. In other words, there is 0.52 ha for each person. About 54 % of forests worldwide are in Russia, Brazil, Canada, the United States and China. Simultaneously, the country with the largest forests in the world is Russia, which has about 20 % of the global forests. In addition to the forest stand, about 726 million ha are currently in protected regions, representing a growth of 191 million ha since 1990.²³ FAO. Global Forest Resources Assessment 2020 – Key findings. Rome (2020). Moreover, 73 % of forests worldwide were in public hands between 2015 and 2022, while 22 % were in private for the same period.²⁴ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022). The area of forest allocated for production accounts for roughly 1.15 billion ha in 2020, representing 31 % of the forest area of 160 countries. Europe and Russia have the most extensive areas used for production, reaching 53 % of their forests. Furthermore, the forest area allocated for production has been reduced by 1.33 million ha between 1990 and 2020.²⁵ FAO. Global Forest Resources Assessment 2020 – Key findings. Rome (2020).

Subsequently, the forest industry’s critical and positive impacts are introduced to represent current and future sustainability issues.  

2.2.  Deforestation and forest degradation

Since 1990, roughly 420 million ha of forest have been lost due to deforestation. Nevertheless, the loss rate has slowed by about 2 million at 10 million ha annually from 2015 to 2020 compared to the period from 2010 to 2015.²⁶ FAO. Global Forest Resources Assessment 2020 – Key findings. Rome (2020). Several factors can be traced back as sources of deforestation and degradation of forests. For instance, the expansion of agriculture accounts for roughly 80 % of the total deforestation. At the same time, other factors are also responsible for adverse effects on forests, such as infrastructure and urban development, mining, dams for hydroelectricity and irrigation. At the same time, the unsustainable harvest of wood is the most significant reason for forest degradation.²⁷ Fraser, A. Achieving the Sustainable Management of Forests: Sustainable Development Goals Series (Springer Switzerland, 2030). Unless ambitious measures are introduced, it is said that 289 million ha of tropical forest will be deforested in the period from 2016 to 2050. As a result, 169 Gt carbon dioxide equivalents (CO₂e) can be delivered into the atmosphere.²⁸ Busch, J. & Engelmann, J. Cost-effectiveness ofreducing emissions from tropical deforestation, 2016–2050. Environmental Research Letters, 13(1): 015001 (2017).

2.3.  Critical sustainability impacts

Afterwards, adverse sustainability effects are outlined, which are caused by the forest industry and represent current as well as future challenges in the field of sustainability.

World production of wood

The world production of roundwood was at 3.91 billion mᵌ in 2020, which represents a growth of 12 % in comparison to 2000 and is expected to rise even more in the following years. The highest contribution is the production of industrial roundwood, which increased by 17 % compared to 2000.²⁹ FAO. Forest product statistics. https://www.fao.org/forestry/statistics/80938/en/ [Accessed on 29.08.2023], (2021). Increasing wood production can negatively affect the environment if extractions are not sustainable.³⁰ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

Wood as a source of energy, deaths and emissions

Woodfuel is a renewable and affordable source of energy. However, wood fuel causes negative effects above all in developing countries. Namely, carbon dioxide (CO₂) emissions are among the most critical risk factors for illnesses. Moreover, wood energy accounts for an estimated range between 1.63 million and 3.12 million premature deaths annually.³¹ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022). Carbon emissions from wood energy are estimated to be responsible for roughly 7 % of total emissions. In other words, 3.46 gigatons (Gt) CO₂e annually.³² Russell, A. E. and Kumar, B. M. Forestry for a Low-Carbon Future: Integrating forests and wood products into climate change strategies. Environment 59, 16–23, FAO, Rome (2016).

Emissions from the forest industry

Land use, land change and forestry are responsible for between 10 % and 12 % of total global CO₂ emissions for 2011 and 2020, which correspond to 4.1 Gt CO₂ annually and include the emissions from deforestation.³³ Friedlingstein, P. et al. Global Carbon Budget 2021. Anthroposphere – energy and emissions https://doi.org/10.5194/essd-2021-386 [Accessed on 29.08.2023], (2021).

Damages by wildfires

Roughly 90 % of forest fires are triggered by humans and can even negatively affect the accomplishment of the SDGs.³⁴ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022). More than one-third of global forest losses were related to fire between 2003 and 2018.³⁵ Van Wees, D., Van der Werf, G.R., Randerson J.T., Andela, N., Chen, Y., Morton D.C. The role of fire in global forest loss dynamics. Global Change Biology, 27(11): 2377–2391 (2021). Losses in hectares are specified in risk for forests and the importance of protection (Chapter 2.1).

Illegal logging

Illegal wood exports are estimated to account for between 8 % and 29 % of global exports of wood-based products, equivalent to between 40 million and 144 million mᵌ for 37 countries in 2018. In addition, illegal exports can reach up to USD 30 billion annually.³⁶ Hoare, A. & Uehara, T. H. K. Establishing fair and sustainable forest economies: Lessons learned from tackling illegal logging. Chatham House (2022)

Informality

It is believed that millions of people work informally in the forest sector.³⁷ Lippe, R.S. et al. Contribution of the forest sector to total employment in national economies – Estimating the number of people employed in the forest sector. Rome and Geneva, FAO and ILOFAO & ILO (2022). As a result, informality threatens not only the human rights of employees but also the productivity of their nations, job creation and economic growth in the long term.³⁸ McKinsey & Company. The hidden dangers of the informal economy https://www.mckinsey.com/featured-insights/employment-and-growth/the-hidden-dangers-of-the-informal-economy [Accessed on 29.08.2023], (2004). Additionally, employment statistics for the forest sector are unreliable due to the lack of coverage of informal activities.³⁹ Lebedys, a. & LI, Y. Contribution of the forestry sector to national economies, 1990-2011, Forest Finance Working Paper FSFM/ACC/09. FAO, Rome (2014). More information about employment and informality is presented in employment in the forest sector (Chapter 1.2.1).

2.4.  Positive sustainability impacts

Positive consequences are represented in the following chapter triggered by the forest industry.

Decarbonizing effects for the construction sector

It is claimed that substituting non-wood products with wood-based products can reduce overall emissions from the construction sector. Wood would thus have a decarbonizing effect. For instance, for every 1 kg of CO₂ emissions from wood-based construction materials that replace non-wood construction materials, there would be an average diminution of about 0.9 kg of CO₂ emissions.⁴⁰ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022).

Value for consumers

More than 5.8 billion people use products from forests globally for various purposes in their daily lives.⁴¹ Lippe, R.S. et al. Contribution of the forest sector to total employment in national economies – Estimating the number of people employed in the forest sector. Rome and Geneva, FAO and ILOFAO & ILO (2022). Moreover, other 2.6 billion people profit from wood and other traditional fuels to cook⁴² EA, IRENA, UN, World Bank & WHO. Tracking SDG7 – The Energy Progress Report 2021 https://www.irena.org/publications/2021/Jun/Tracking-SDG-7-2021 [Accessed on 29.08.2023], (2021). .

Forests as an income source

Forests play a significant role in numerous tropical developing countries where humans earn roughly between 20 % and 25 % of their income from forests. Forests can even contribute to about 75 % of the income of several households in India.⁴³ FAO.The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

Carbon stock in forests

Forests can capture and store carbon dioxide. In 2020, forests are estimated to be able to store 662 Gt of CO₂. In other words, about 163 tonnes per hectare. The most important stock sources were living matter and soil organic water at 45 % each. Only 10 % of the carbon stock was in dead wood and litter.⁴⁴ FAO.The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

Sequestration of CO₂

Forests can also sequestrate CO₂ from the atmosphere. Between 2011 and 2020, it was estimated that forests sequestrated roughly 11.4 gigatons of carbon (GtC) annually worldwide⁴⁵ Friedlingstein, P. et al. Global Carbon Budget 2021. Anthroposphere – energy and emissions https://doi.org/10.5194/essd-2021-386 [Accessed on 29.08.2023], (2021). .

3. Sustainability strategies and measures

As stated above, the forest sector has a high potential to contribute to climate change mitigation and adaptation. The following section explains how different strategies and actual measures already improve the environmental performance of the forestry sector. The first part focuses on underlying theoretical strategies. In contrast, the second part concentrates on actual measures and their impact dimensions.

3.1.  Strategies

The new global strategy to minimize the use of environmentally harming fossil fuels and use less non-renewable resources in production processes is called “bioeconomy”. Such an economy can be defined as the following:

“…the production, utilization, conservation, and regeneration of biological resources […] to provide sustainable solutions (information, products, processes and services) within and across all economic sectors and enable a transformation to a sustainable economy.”⁴⁶ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022).

Therefore, wood as a renewable biological resource and the forest sector as such hold significant importance within the context of bioeconomy. Embedded in the concept of bioeconomy are the principles of a circular economy, which also overlaps with a cascading use of wood. The cascading approach aims to optimize biomass utilisation by extending the lifespan of materials through repeated use and recycling before ultimately generating energy. This concept can be visualized as a river flowing over a sequence of plateaus.⁴⁷ Jarre, M. et al. Transforming the bio-based sector towards a circular economy – What can we learn from wood cascading? Forest Policy and Economics, 110, 101872 (2020). Those ideas are also included in a circular economy, which shifts production focus from the classic linear production model to circularity to ensure effective utilization of (forest) resources and reduce waste.⁴⁸ D’Amato et al. Green, circular, bio economy: a comparative analysis of sustainability avenues. Journal of Cleaner Production, 168 (2017). Further information can be found in the corresponding wiki entry about circular economy.

3.2.  Tools and measures

Based on the above-introduced concepts, the forestry sector encompasses various practical measures to achieve a more sustainable performance. This section will delve into a selection of measures and tools implemented in the sector.

3.2.1.     Bioenergy production

The circular economy and cascading promote an efficient use of resources with the minimization of waste. Therefore, wood-based energy production is one measure to avoid wood disposal at the end of a product’s life cycle. On the one hand, those removals are used as fuelwood daily for heating and cooking in private households, especially in developing regions such as Africa, Asia, and Central and South America. That is why fuelwood contributes to food security and increases nutrient availability positively. On the other hand, fuelwood is used for household heating and energy generation in the industry when focusing on North America and Europe.⁴⁹ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). The European Union passed the “Renewable Energies Directive” (currently RED II), which ensures the use of certified solid biomass for heat generation. Hence, bioenergy feedstocks need to fulfil specific sustainability and GHG emissions-saving criteria.⁵⁰ EU. Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.328.01.0082.01.ENG [Accessed on 29.08.2023], (2018). Compared to other renewable energy sources, wood has the lowest CO₂ emissions (see Figure 2).

Source: Own figure based on ⁵¹ UBA. Emissionsbilanz erneuerbarer Energieträger – Bestimmung der vermiedenen Emissionen im Jahr 2021. Dessau- Roßlau: Umweltbundesamt (2022).

Wood-based energy production is considered relatively climate-friendly because burning the wood releases no more climate-damaging CO₂ than was previously bound during plant growth.

To illustrate the potential of wood for energy production, here is an example from Germany: In 2022, 65 % of the heat from renewable energies in Germany was generated primarily from wood. Thus, while the potential of wood for heat production is very high, the share of electricity from renewable energies is only 4 %.⁵² Bundesministerium für Ernährung und Landwirtschaft. Wärme aus Holz. https://www.bmel.de/DE/themen/wald/holz/waerme-aus-holz.html (2022). Another beneficial consequence of using woody biomass for energy is the rapidly increasing demand for wood. This will stimulate the market and make active but sustainable forest management necessary.⁵³ Camia A. et al. The use of woody biomass for energy purposes in the EU, EUR 30548 EN, Publications Office of the European Union, Luxembourg, JRC122719 (2021). However, using wood for energy production also includes some negative aspects. For example, bioenergy from primary wood does not follow the principle of cascading use of raw materials because it inhibits reuse and recycling. According to the FAO, nearly 50 % of global roundwood removals were utilized as bioenergy directly without any first-stage utilization. On the opposite side, paper is frequently recycled up to seven times before the deterioration of wood fibre properties hinders further use. This practice significantly lessens the demand for virgin fibre.⁵⁴ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). Hence, much improvement potential can be derived from using woody byproducts instead of primary wood for energy purposes.

Moreover, the growing demand for biomass for generating bioenergy requires an increased supply of raw materials such as wood. Therefore, pursuing sustainable forestry and biodiverse-rich afforestation is crucial, combining higher needs for resources and maintaining rich biodiversity.⁵⁵ Camia A. et al. The use of woody biomass for energy purposes in the EU, EUR 30548 EN, Publications Office of the European Union, Luxembourg, JRC122719 (2021).

3.2.2.     Improved forest management

As forests absorb and store vast amounts of carbon dioxide as tree biomass and soils, they are a crucial part of climate change mitigation on a global scale.⁵⁶ Raihan, A. et al. A review of emission reduction potential and cost savings through forest carbon sequestration. Asian Journal of Water, Environment and Pollution, 16(3), 1–7 (2019). They do not only act as sinks through carbon sequestration but also as sources of GHG emissions due to deforestation. According to the Intergovernmental Panel on Climate Change (IPCC), it has been determined that forests and other terrestrial systems have a yearly capacity to absorb approximately 2.6 GtC. The emissions of about 1.6 GtC through deforestation and forest degradation result in a net absorption of 1 GtC.⁵⁷ IPCC. Climate change 2007: The physical science basis: Intergovernmental panel on climate change. Agenda (Vol. 6, no. 07). Geneva: United Nations Framework Convention on Climate Change. (2007). A higher demand for wood increases deforestation, which consequently requires efficient activities like forest conservation, afforestation, reforestation, sustainable forest management or agroforestry to outbalance GHG emissions and mitigate the impacts of climate change. The difference between re- and afforestation is that afforestation occurs in areas where trees do not grow.

In contrast, reforestation involves replanting trees in areas that have been depleted of forests in the recent past.⁵⁸ FAO. Global Forest Resources Assessment 2020: Main Report. Rome, Italy: FAO (2020). For example, a new strategy that has recently been strongly promoted and pursued in Germany is forest reconstruction. This is a form of reforestation of currently often existing monocultures, as these are less climate resilient. Forest reconstruction aims to enhance an existing forest landscape, typically unstable, so it becomes more resistant by introducing different tree species.⁵⁹ Waldumbau: Vom Nadelwald zum Mischwald. Waldhilfe https://www.waldhilfe.de/waldumbau/ [Accessed on 29.08.2023], (n.d.). Besides the improvement of forestry landscapes, there is another sustainable form of land management, called agroforestry, defined as the following:

“Agroforestry […] optimizes the use of natural resources (nutrients, radiation, water) [and] is defined as the deliberate integration of woody vegetation with agricultural activities […].“⁶⁰ Santiago-Freijanes, J. J. et al. Agroforestry development in Europe: policy issues. Land Use Policy, 76, 144–156 (2018).

Agroforestry was the traditional way of land use practices in past times in Europe. The main advantages of agroforestry are larger biomass production per land area and more ecosystem services than agricultural lands without trees. These ecosystem services include increasing carbon sequestration and landscape biodiversity and decreasing soil erosion and nitrogen (((60(santiago…))). Climate change also transforms today’s business dynamics. Numerous companies are also addressing the topics of climate change and promoting to become “climate neutral” within the next few decades. One approach to achieving this goal is through compensation projects, where companies invest in initiatives to offset their emissions. However, this practice may create misperceptions among customers, who might assume that products are produced without harmful emissions. Climate neutrality is often achieved through compensation rather than direct emission reduction.⁶¹ Hartmann, L. (2023). Klimaneutralität – kein Werbeversprechen. In Klimaneutralität in der Industrie (eds. Böhm, U. et al.) 137-144 (SpringerGabler 2023). These projects are viral in the forestry sector but have some drawbacks. Firstly, it takes time for trees to absorb CO₂ after planting, so companies should not immediately include these compensations in their emission statistics. Secondly, offset projects may do more harm than good, such as when planted by fast-growing and non-native monocultures. Thirdly, reforestation alone may not be sufficient to achieve GHG neutrality. Companies need to support organizations that offset GHG emissions and focus on preserving existing forests and conducting sensible reforestation and forest reconstruction.⁶² Hartmann, L. (2023). Klimaneutralität – kein Werbeversprechen. In Klimaneutralität in der Industrie (eds. Böhm, U. et al.) 137-144 (SpringerGabler 2023). An example would be the Foundation Development and Climate Alliance developed from the initiative of the German Federal Ministry for Economic Cooperation and Development (BMZ). They are working towards sustainable development and global climate protection through voluntary offsetting projects in the global south.⁶³ Stiftung Allianz für Entwicklung und Klima: Was wir tun. Stiftung Allianz für Entwicklung und Klima https://allianz-entwicklung-klima.de/die-stiftung/ueber-uns/ (n.d.). In Germany, PLANT-MY-TREE is an organization that enables companies to undertake localized offsetting projects in the forestry sector. It has pioneered systematic reforestation efforts to protect the climate and biodiversity in Germany. Over the past 20 years, PLANT-MY-TREE has prioritized minimizing distances to reforestation areas. Companies such as Hyundai Germany, HP Germany, and the energy group E-ON are already partnering with PLANT-MY-TREE.⁶⁴ PLANT-MY-TREE. Willkommen beim Original – Über PLANT-MY-TREE. PLANT-MY-TREE https://plant-my-tree.de/ueber-plant-my-tree/? [Accessed on 29.08.2023], (n.d.).

3.2.3.     Labelling

Ecolabels provide more transparency for both consumers and producers. They act as qualifications to identify goods and services based on ecological or ethical criteria. Ecolabels primarily serve as communication tools for consumers. However, businesses across sectors also utilize them to convey their dedication to the environment and their efforts to consumers.⁶⁵ Cobut, A., Beauregard, R. & Blanchet, P. Using life cycle thinking to analyze environmental labeling: the case of appearance wood products. International Journal of Life Cycle Assessment, 18(3), 722–742 (2012). For more information, also see the wiki entry about ecolabels. It is noticeable that the type of certification body (either third-party or self-certification) and the origin of certification (whether it is local or international) play a significant role in bolstering the reliability of labels and enhancing consumer trust.⁶⁶ Nikolaou, I. E., & Kazantzidis, L. A sustainable consumption index/label to reduce information asymmetry among consumers and producers. Sustainable production and Consumption, 6, 51-61 (2016).

The following ecolabels were selected to give good examples of the several labels considering the forestry sector. For an overview, see Table 4.

The first ecolabel ever introduced was the Blue Angel in 1978 in Germany. The type I label (ISO 14024) nowadays certifies more than 20000 products of more than 1600 German companies. The ecolabel is renowned and trustworthy due to its easily accessible environmental criteria and verification rules, which are clearly defined and made public. An essential criterion for credibility is that the label is independently awarded and given to the best performances of products and services in the corresponding product class.⁶⁷ Blue Angel. Our label for the environment. https://www.blauer-engel.de/en/blue-angel/our-label-environment [Accessed on 29.08.2023], (2023).

The product classes which consider wood, paper and furniture are:

The Blue Angel ecolabel evaluates and promotes products based on their entire life cycle. It specifically emphasizes the utilization of wood sourced from sustainably managed forests65 and wood-based materials with low emissions. Concerning paper products, the label focuses on entirely using recycled paper.⁶⁸ Blue Angel. Our products and services. https://www.blauer-engel.de/en/products# [Accessed on 29.08.2023],, (n.d.).

Another established ecolabel in Europe is the EU Ecolabel. Until 2023, more than 88000 goods and services have been awarded with this label, most of them in Italy, Spain and France.⁶⁹ European Comission. EU Ecolabel facts and figures. EC: Energy, Climate change, Environment – Environment https://environment.ec.europa.eu/topics/circular-economy/eu-ecolabel-home/business/ecolabel-facts-and-figures_en [Accessed on 29.08.2023], (2023). The ecolabel criteria are tailored for every product category by the European Commission. The development of the criteria involves consultation with important stakeholders, such as consumer associations and experts in the relevant industry. They are regularly reviewed by the EU Ecolabelling Board (EUEB) to ensure they remain current, reliable, and capable of adapting to technological advancements or changes in the market. Each product category has specific characteristics, so the criteria are customized to address these unique features.⁷⁰ European Comission. Product groups and criteria. EC: Energy, Climate change, Environment – Environment https://environment.ec.europa.eu/topics/circular-economy/eu-ecolabel-home/product-groups-and-criteria_en [Accessed on 29.08.2023], (n.d.). The following product categories of the EU Ecolabel address the wood sector:

• Wood-, cork- and bamboo-based floor coverings
• Furniture
• Graphic paper and
• Tissue paper and tissue products and
• Printed paper, Stationery paper and paper carrier bag products

The products within these categories are guaranteed to comply with strict emissions limitations. Moreover, the raw material should be sourced from sustainably managed forests or recycled. The ecolabel also includes a restricted use of hazardous substances.⁷¹ European Comission. EU Ecolabel – Paper. EC: Energy, Climate change, Environment – Environment https://environment.ec.europa.eu/topics/circular-economy/eu-ecolabel-home/product-groups-and-criteria/paper_en [Accessed on 29.08.2023], (n.d.).

The Worldwide Forest Stewardship Council, shortly known as FSC – label, is a label that only focuses on the forestry sector. The NGO behind this label assures that the certificate is awarded after a successful audit by an independent third party, which is repeated at least once a year.⁷² FSC Deutschland. Was ist FSC? https://www.fsc-deutschland.de/was-ist-fsc/ [Accessed on 29.08.2023], (n.d.). Consumers buying FSC-certified products support zero deforestation, community rights, provision of fair wages and working conditions and the protection of local fauna and flora.⁷³ FSC. What’s in a label? https://fsc.org/en/what-the-fsc-labels-mean [Accessed on 29.08.2023], (n.d.). To ensure a life cycle assessment of forest-based materials, the FSC follows the chain of custody certification. So, when a finished product bears the FSC label, it indicates that the based materials have met the chain of custody requirements at each stage of the supply chain, starting from sourcing and ending with distribution.⁷⁴ FSC. Chain of custody certification. https://fsc.org/en/chain-of-custody-certification [Accessed on 29.08.2023], (n.d.). Nowadays, 160 million ha of forest in 89 countries are certified.⁷⁵ FSC connect. Facts & Figures https://connect.fsc.org/impact/facts-figures [Accessed on 29.08.2023], (n.d.).

Ecolabel	Main characteristics	Introduction
Blue Angel	·        Life cycle evaluation ·        100 % recycled paper . Indicates the percentage of certified wood and/or recycled wood; origin of wood if not certified	1978
EU Ecolabel	·        Life cycle analysis ·        Wood from SFM ·        No dangerous substances for the raw wood, coating, surface treatments ·        Recovery of byproduct Limited energy consumption	1992
FSC	·        Focus on forestry ·        Independent of a government ·        Chain of custody Considering social, environmental and ecological dimensions	1993

Table 4: Overview of ecolabels

Source: Own illustration based on⁷⁶ Cobut, A., Beauregard, R. & Blanchet, P. Using life cycle thinking to analyze environmental labeling: the case of appearance wood products. International Journal of Life Cycle Assessment, 18(3), 722–742 (2012).

As all those labels also analyze furniture made of wood, the following section briefly explains the possible contributions to climate change mitigation of this industry.

3.2.4.     Improvement of the furniture industry  

EU businesses and consumers discard nearly 10 million tons of furniture annually. Most of them end up either in landfills or are incinerated.⁷⁷ Koszewska, M. & Bielecki, M. How to make furniture industry more circular? The role of component standardisation in ready-to-assemble furniture. Entrepreneurship and Sustainability Issues, 7(3), 1688-1707 (2020). Therefore, the urgency for furniture production based on a circular principle to minimize raw material use becomes visible. However, it can be observed that there is still a limited level of engagement in higher-value circular resource flows. Precisely, remanufacturing, which involves refurbishing and reusing products, constitutes a relatively small fraction, specifically less than 2%, of the overall manufacturing turnover within the European Union.⁷⁸ Forrest, A. et al. Circular Economy Opportunities in the Furniture Sector. In: European Environmental Bureau (EEB). https://eeb.org/library/circular-economy-opportunities-in-the-furniture-sector/ [Accessed on 29.08.2023], (2017). Explicitly planning and designing more stable and long-living commodities is required to develop more sustainable furniture. Therefore, it is imperative to incorporate the 3Rs (Reduce, Reuse, Recycle) right from the inception of the product design phase. Moreover, it can be helpful to standardize components and assembly parts as they can be used more easily within recycling processes while creating new furniture with used products.⁷⁹ Koszewska, M. & Bielecki, M. How to make furniture industry more circular? The role of component standardisation in ready-to-assemble furniture. Entrepreneurship and Sustainability Issues, 7(3), 1688-1707 (2020). Another obstacle to implementing cascading or circular handling is chemicals used in wood-based furniture production, e.g., flame-retardants or varnishes, to achieve an appealing design. Including chemical constituents in waste wood hinders its categorization as reusable or recyclable, primarily due to health concerns. Consequently, incineration emerges as the sole conceivable end-of-life alternative that is not desired.⁸⁰ Nguyen, D. et al. Production of wood-based panel from recycled wood resource: a literature review. Eur. J. Wood Prod. 81, 557–570 (2023). Additionally, it is crucial to establish a strategic framework that facilitates the systematic integration of recovered raw materials, intermediate products, and other components into the manufacturing of new furniture items. A successful business example is the furniture store IKEA, which established a “second chance program” that takes back gently used IKEA products and supports furniture reuse and recycling. This is a convenient situation for customers and the chain itself. Because both sides want to ensure usable goods do not go to landfills. Consumers can get little money to spend on other IKEA products, and the company saves money by needing less raw materials.⁸¹ IKEA Germany. Zweite-Chance-Markt: Reparieren, recyceln, wiederverwenden. Schätze und nachhaltige Ideen. https://www.ikea.com/de/de/campaigns/zweite-chance-markt-second-hand-pub2eab7840 [Accessed on 29.08.2023],  (n.d.).

3.2.5.     Wood for construction

Not only the market for wood as furniture material has grown. Since the 1960s, the global production of wood-based materials used in construction and furniture manufacturing has risen nearly 15 times.⁸² Beck-O’Brien et al. Alles aus Holz – Rohstoff der Zukunft oder kommende Krise; Ansätze zu einer ausgewogenen Bioökonomie. WWF Deutschland (2022). The last measure for an improved sustainability performance of the wood-based industry evaluated in this article is the construction sector.

The raw material production for conventional buildings caused roughly 10 % of the global GHG emissions in 2020, where cement, steel and iron had the most significant impact.⁸³ Ge, M., Friedrich, J. & Vigna, L. 4 Charts Explain Greenhouse Gas Emissions by Countries and Sectors. World Resources Institute. https://www.wri.org/insights/4-charts-explain-greenhouse-gas-emissions-countries-and-sectors [Accessed on 29.08.2023], (2021). Buildings made from wood are considered more sustainable because their manufacturing produces less CO₂ than conventional building materials.⁸⁴ Cobut, A., Beauregard, R. & Blanchet, P. Using life cycle thinking to analyze environmental labeling: the case of appearance wood products. International Journal of Life Cycle Assessment, 18(3), 722–742 (2012). 6565 Hence, the potential use of wood can significantly impact turning the construction sector into a CO₂ storage instead of being one of the most significant emissions generators. Indeed, the overall production, operation, and end-of-life disposal of wood constructions also produce emissions. Nevertheless, wood absorbs more emissions through its storage capacity than it emits during the life cycle.⁸⁵ Hertwich, E. G. & Wood, R. The growing importance of Scope 3 greenhouse gas emissions from industry. Environmental Research Letters, 13(10), 104013 (2018).

Besides being perceived as environmentally friendly, wood has other benefits, such as insulation, acoustics and improved air quality. Thus, wooden buildings receive more attention and are constructed frequently worldwide.⁸⁶ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). An example of advanced wood construction is the 2019 finished “HoHo” house in Vienna. This 24-storey tower consists of 75 % spruce wood. With 84 m, it is one of the tallest hybrid timber skyscrapers. According to the Austrian Sustainable Building Council, this timber construction saves around 2800 tons of carbon dioxide equivalents (CO₂e) compared to reinforced concrete.⁸⁷ Holzbauwelt. HoHo Wien – Holz-Hybrid-Hochhaus mit Brettschichtholz/ Brettsperrholz. https://www.holzbauwelt.de/projekt/hasslacher-gruppe/hoho-wien.html [Accessed on 29.08.2023], (n.d.). Another large construction project is the so-called “wooden city” in Sweden. An urban district in the south of Stockholm with approximately 250,000 m² is to be built. The envisioned area will encompass a lively environment characterized by diverse workspaces, residential areas, restaurants, and shops.⁸⁸ Robert Klatt. Stockholm Wood City-Stockholm erhält neues Stadtviertel aus Holz. Forschung und Wissen. https://www.forschung-und-wissen.de/nachrichten/umwelt/stockholm-erhaelt-neues-stadtviertel-aus-holz-13377760 [Accessed on 29.08.2023], (2023).

After presenting five selected measures to achieve a more sustainable performance, the following section dives deeper into further potentials and challenges of the forest-based industry.

4. Drivers and Barriers

The following chapter briefly explains the most important drivers and barriers towards a sustainable wood-based industry.

4.1.  Drivers

This chapter considers and presents the drivers towards a more sustainable wood-based industry. Those can be found in the characteristics of the resource itself, climate change, various global strategies, innovations, and the changing behaviour of customers worldwide.

4.1.1.     The characteristics of wood

The characteristics of the resource wood itself can be identified as one of the most important drivers of sustainability in the wood-based industry. Wood is a primary raw material for many industries as it is considered a “renewable, aesthetically comforting, highly versatile, carbon neutral, less carbon dioxide producing, durable, structurally strong, cheap, non-toxic and naturally abundant “⁸⁹ Akpan, E. I., Wetzel, B. & Friedrich, K. Eco-friendly and sustainable processing of wood-based materials. Green Chemistry 23, 2198–2232 (2021). resource. Because of that, as stated above, it can be used for many different purposes, such as in construction, as pulp, paper or cardboard, as a chemical raw material or as an energy source⁹⁰ Schütze, G., Umwetschutz, Wald und nachhaltige Holznutzung in Deutschland. UBA (2021). ⁹¹ Fachagentur Nachwachsende Rohstoffe e. V. Klimaschutz durch Holz. https://holz.fnr.de/was-ist-holz/holz-als-co2-speicher/klimaschutz-durch-holz [Accessed on 29.08.2023], (n.d).. . Additionally, thanks to the characteristics as well as the versatility of the resource, it functions as an excellent substitute for non-renewable materials, “fossil-based or GHG-intensive materials,”⁹² Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). like single-use plastics or fossil fuels.⁹³ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). Furthermore, “less carbon dioxide producing” refers to the advantage of the wood’s ability to store CO₂. Through photosynthesis, trees absorb and store CO₂ from the atmosphere.⁹⁴ Singh, T. et al. Emerging technologies for the development of wood products towards extended carbon storage and CO2 capture. Carbon Capture Science & Technology 4, 100057 (2022). ⁹⁵ Fachagentur Nachwachsende Rohstoffe e. V. Klimaschutz durch Holz. https://holz.fnr.de/was-ist-holz/holz-als-co2-speicher/klimaschutz-durch-holz [Accessed on 29.08.2023], (n.d). This process results in carbon storage (C) within the trees. This storage continues until the eventual decomposition of the organisms.⁹⁶ Fachagentur Nachwachsende Rohstoffe e. V. Klimaschutz durch Holz. https://holz.fnr.de/was-ist-holz/holz-als-co2-speicher/klimaschutz-durch-holz [Accessed on 29.08.2023], (n.d). Trees can significantly reduce the greenhouse effect over a long period through this process. A byproduct of this process is the release of oxygen (O₂) into the atmosphere as trees emit this life-sustaining gas. Trees thus play a dual role, absorbing CO₂ from the atmosphere while releasing the essential oxygen supporting various life forms.⁹⁷ Fachagentur Nachwachsende Rohstoffe e. V. Klimaschutz durch Holz. https://holz.fnr.de/was-ist-holz/holz-als-co2-speicher/klimaschutz-durch-holz [Accessed on 29.08.2023], (n.d). If harvested sustainably, the resource can be gathered in a way that leaves the forest and ecosystems intact and healthy while preserving the natural resources. Therefore, this can drive the transition towards a more sustainable industry indirectly but effectively.

4.1.2.     Climate Change and Sustainable Forest Management

Besides the characteristics, another essential thing for transitioning into a more sustainable industry is to consider sustainable wood production- the first step in the wood product value chain⁹⁸ Otesile, A. A., et al. Value chain analysis of forest wood products. Van Sangyan 4(12), 1-18 (2021). – independently of the final product. Sustainability has been considered in forestry for a long time⁹⁹ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). , primarily because the industry is more strongly linked to the climate than almost any other industry. It is directly affected by the impacts of climate change.¹⁰⁰ WWF Deutschland: Nachhaltige Waldwirtschaft – (K)eine Illusion !?, https://www.wwf.de/themen-projekte/waelder/verantwortungsvollere-waldnutzung/nachhaltige-waldwirtschaft-keine-illusion [Accessed on 16. August 2023], (2023). Therefore, climate change itself can be considered one of the most crucial drivers in the sector. In the last couple of years, the impacts and consequences of climate change that forests worldwide have suffered are constantly increasing. Some impacts are a rising number of forest fires, pests and the spread of inversion species, drought or damages after storms. The extent of damage to the forests differs within the world’s regions.¹⁰¹ Forzieri, G. et al. Emerging signals of declining forest resilience under climate change. Nature 608 (2022). All these impacts may lead to a reduction of global forest resources, which, on the other hand, increases the need for more efficient and sustainable handling of the trees and the wood processing processes as well as the whole value-added/ supply chain, but also the social aspect in order to secure employment for millions of people worldwide.¹⁰² FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022).

Suppose there is a decline in available and usable forest areas due to climate change or any other reason. The environment, climate, people, and the economy are affected in that case. Additionally, the consequences will run through all steps along the wood product value chain. Specifically, this means that a shortage of wood resources leads to supply shortages, high prices, loss of income and the livelihood of the people working in the sector.¹⁰³ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022). Those shortages, on the other hand, can be especially problematic for the people of those countries and areas where forestry and the manufacturing of wood products is one of the primary income sources, endangering their livelihood.¹⁰⁴ Otesile, A. A., et al. Value chain analysis of forest wood products. Van Sangyan 4(12), 1-18 (2021). ¹⁰⁵ International Institute for Sustainable Development (IISD). Greening the Wood Industry: Sustainability from Production to Consumption (2019). With an estimated 33 million employees (2017-2019) in the wood-based or wood-related industries, the forestry industry is “an important source of employment, livelihoods and incomes for millions, especially in rural areas”¹⁰⁶ ILOSTAT. Forest sector employs 33 million around the world, according to new global estimates – ILOSTAT. Available at https://ilostat.ilo.org/forest-sector-employs-33-million-around-the-world-according-to-new-global-estimates/ [Accessed on 29.08.2023], (2022). . In addition, many illegal (and therefore unreported) workers are challenging to catch.

Therefore, starting the sector’s transformation at the beginning of the value chain is essential. To transform the industry toward more sustainability, it is, therefore, necessary to implement sustainable practices within the forests that address the global forests’ economic, social, and environmental functions. This development can be driven by SFM, which aims to “ensure that forests supply goods and services to meet both present-day and future needs and contribute to the sustainable development of communities. However, as stated above, definitions of these strategies vary. Nevertheless, the SFM can function as a driver because if measurements such as reforestation or reduced deforestation are implemented successfully, the wood-based industry (especially forestry) will reach net zero CO₂ emissions earlier than most other sectors like transportation or industry.¹⁰⁷ Lee. H., et al. Climate Change 2023: Synthesis Report. Contribution of Working Groups I, II and III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. IPCC, Geneva, Switzerland (2023). On the other hand, this is a massive driver for implementing more sustainable practices and trying to realize the developed strategies and measures that have been set, i.e., to reduce global temperature’s rise to 1.5 °C according to the Paris Agreement.

4.1.3.     (Global) strategies

Climate change is one of the most critical problems of the time and can only be managed if the world participates. This is not different for the wood-based industry, one of the world’s most interconnected industries and one of the industries government and global organizations put more and more focus on to meet the various climate mitigation targets.¹⁰⁸ FAO. The State of the World’s Forests 2009, Rome, FAO (2009). ¹⁰⁹ Dalalah, D. et al. An Integrated Framework for the assessment of environmental sustainability in wood supply chains. Environmental Technology and Innovation 27, 102429 (2022). Therefore, several strategies have been implemented throughout the past years, addressing the impacts of climate change on the forests and the wood as a resource to secure the existing stocks or keep them on a consistent or growing basis. In 2017, for example, The Food and Agriculture Organization (FAO), together with its Advisory Committee on Sustainable Forest-based Industries (ACSFI) and various other partners, founded the initiative “Sustainable Wood for a Sustainable World” (SW4SW)¹¹⁰ Sustainable Wood for a Sustainable World (SW4SW). Concept note for a JOINT INITIATIVE of the Collaborative Partnership on Forests (2017). . It aims “to implement specific activities and catalyze efforts for strengthening sustainable wood value chains, focusing on sustainable production and consumption of wood products”¹¹¹ Sustainable Wood for a Sustainable World (SW4SW). Concept note for a JOINT INITIATIVE of the Collaborative Partnership on Forests (2017). , as the Collaborative Partners on Forests states. The foundation of this initiative was an essential step in the path towards a more sustainable sector, addressing aspects regarding environmentally, economically, and socially relevant topics and areas of interest.¹¹² Sustainable Wood for a Sustainable World (SW4SW). Concept note for a JOINT INITIATIVE of the Collaborative Partnership on Forests (2017). The SW4SW is closely connected to other strategies implemented globally to achieve the imposed goals, such as the Sustainable Development Goals. These strategies include the already mentioned Strategy on Bioeconomy, Circular Economy, Bonn Challenge, Declaration of Kattowitz, the UN Strategic Plan for Forests 2017–2030 or the Six Forest Goals. Similar to the SW4SW Initiative, all these strategies aim for sustainable development in all steps along the wood product value chain, beginning with forests, continuing with wood as a primary resource and following all the steps till the end of usage of the products.¹¹³ Sustainable Wood for a Sustainable World (SW4SW). Concept note for a JOINT INITIATIVE of the Collaborative Partnership on Forests (2017). ¹¹⁴ United Nations Forum on Forest. Six global forest goals agreed at UNFF special session. https://www.un.org/esa/forests/news/2017/01/six-global-forest-goals/index.html [Accessed on 29.08.2023], (2017). ¹¹⁵ BMUV. Bonn Challenge. Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection https://www.bmuv.de/en/topics/nature-species-protection/nature-and-biological-diversity/forests/bonn-challenge [Accessed on 29.08.2023], (2020). ¹¹⁶ UN. Economic and Social Council. Report of the United Nations Forum on Forests on its 2017 special session. E/DEC/2017/226 (2017).

Strategy or Initiative	Goal
SW4SW	Strengthening g sustainable wood value chains through collaborative efforts. Connecting the value chains positively with poverty reduction, sustainable landscapes, and growth. Key aspects include policy frameworks, market solutions, and alignment with SDGs, Global Forest Goals, and climate change objectives.
Six Global Forest Goals	Sustainable management of forests and treesLimiting deforestation and forest degradation
Bonn Challenge	Restoration of forests and wooded landscapes worldwide
Declaration of Kattowitz	Underlining the importance of forests and wood use for climate protection Linking it to other international forest-related goals and resolutions
UN Strategic Plan for Forests 2017-2030	Framework for any forest-related work of the UN.

Table 5: Overview of the different strategies that drive the transformation of the wood-based industry.

Source: Own illustration based on ¹¹⁷ Sustainable Wood for a Sustainable World (SW4SW). Concept note for a JOINT INITIATIVE of the Collaborative Partnership on Forests (2017). ¹¹⁸ United Nations Forum on Forest. Six global forest goals agreed at UNFF special session https://www.un.org/esa/forests/news/2017/01/six-global-forest-goals/index.html [Accessed on 29.08.2023],  (2017). ¹¹⁹ BMUV. Bonn Challenge. Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection https://www.bmuv.de/en/topics/nature-species-protection/nature-and-biological-diversity/forests/bonn-challenge [Accessed on 29.08.2023], (2020). ¹²⁰ UN. Economic and Social Council. Report of the United Nations Forum on Forests on its 2017 special session. E/DEC/2017/226 (2017).

Even though most of the in the table presented strategies refer to forests in general, they address the wood-based industry at one point or another, promoting sustainable development in all steps along the wood product value chain, beginning with forests, continuing with wood as a primary resource and following all the steps till the end of usage of the products.

4.1.4.     Innovations

Innovations are widely known to drive change forward. New technology production methods and products have been introduced to the market in the wood-based industry, implementing a more sustainable way of thinking. Along with the need for new technologies and production methods, the change in consumer behaviour and the increasing demand for sustainable products puts “pressure on wood production systems”¹²¹ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). and the sector’s sustainability.¹²² Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). Therefore, new methods and solutions are required to change the current structures and processes, e.g., implementing the targeted circular economy or reducing the overall negative environmental impacts of the sector.¹²³ Salo, H., Suikkanen, J. & Nissinen, A. Eco‐innovation Motivations and Ecodesign tool implementation in companies in the Nordic textile and information technology sectors. Business Strategy and The Environment 29, 2654–2667 (2020). ¹²⁴ Dalalah, D. et al. An Integrated Framework for the assessment of environmental sustainability in wood supply chains. Environmental Technology and Innovation 27, 102429 (2022). Eco-design is an exemplary new mew method that starts at the beginning of the wood value chain. Eco-design keeps the basic idea of the circular economy in mind by designing wood products so that they can complete the steps of use, reuse, and recycling through the product’s circle of life, reducing its impact on the environment.¹²⁵ Salo, H., Suikkanen, J. & Nissinen, A. Eco‐innovation Motivations and Ecodesign tool implementation in companies in the Nordic textile and information technology sectors. Business Strategy and The Environment 29, 2654–2667 (2020). ¹²⁶ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). Furthermore, several products are under development, planned to substitute products with high GHG emissions, such as “lignin-based adhesives for wood panels, a lignin-based anode material […], wood-based composites for injection”¹²⁷ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). .

4.2.  Barriers

To effectively encourage sustainable wood-based products, several factors need to be considered. These encompass the sustainable and lawful sourcing of constituent materials, resource utilization efficiency, and the reduction of harmful emissions from the final consumption.¹²⁸ Schütze, G., Umweltschutz, Wald und nachhaltige Holznutzung in Deutschland. UBA (2021). Realizing a sustainable wood-based industry is characterized by drivers and various factors that might hinder the targeted development. Therefore, the following chapter presents some barriers that need to be considered.

4.2.1.     Managing Forests and Wood Resources

To effectively encourage sustainable wood-based products, several factors need to be considered. These encompass the sustainable and lawful sourcing of raw materials or efficient resource utilization.¹²⁹ Schütze, G., Umweltschutz, Wald und nachhaltige Holznutzung in Deutschland. UBA (2021). In this context, the consequences of forest loss and the use of chemicals in the processing of wood products are relevant.

Forest loss

As mentioned in the section “driver” above, climate change has a massive impact on the world’s forest stocks. This can be seen as a driver to handle the existing and regrowing resources efficiently and sustainably but can also hinder the transition. One major problem in this context is the rising demand for wood, which is increasingly used as a substitute for fossil-based and non-renewable resources. According to ¹³⁰ Beck-O’Brien, M. et al.. Alles aus Holz – Rohstoff der Zukunft oder kommende Krise; Ansätze zu einer ausgewogenen Bioökonomie (2022). “at 4.3 to five billion m³ per year, global consumption of wood is already higher than what can be sustainably extracted from the forests”. This development is expected to continue, raising the question of how the existing resources and the demand can be reconciled.¹³¹ Beck-O’Brien, M. et al. Alles aus Holz – Rohstoff der Zukunft oder kommende Krise; Ansätze zu einer ausgewogenen Bioökonomie (2022).

Furthermore, the higher consumption of wood than can be covered by the existing forest stocks leads to a progressive resource loss. On the other hand, this might lead to a decreasing interest in investments, endangering the livelihood of workers along the supply chain and driving the change of other sectors forward, as others might be more attractive. Another aspect that intensifies this problem is the illegal logging of wood. Illegal logging is “the harvesting, processing, transporting, buying or selling timber in contravention of national and international laws”¹³² European Forest Institute. Reducing illegal logging through FLEGT. VPA ALA Facility https://flegtvpafacility.org/flegt/ [Accessed on 29.08.2023], (2022). . It has a wide range of negative impacts on the environment and the forests.¹³³ Wabiwa, I. Illegal logging: Fueling conflict and damaging livelihoods. Greenpeace International https://www.greenpeace.org/international/story/7487/illegal-logging-fuelling-conflict-and-damaging-livelihoods/ [Accessed on 29.08.2023], (2015). That is like the known deforestation but can cause even more damage due to its uncontrollability. This practice can cause damage to the forests themselves. However, it can also lead to a degradation of the forest stocks, disturbance of the climate system, and deprive people of their livelihood. Furthermore, it costs the government revenues and taxes that could be used to support the society and the country’s development.¹³⁴ Wabiwa, I. Illegal logging: Fueling conflict and damaging livelihoods. Greenpeace International https://www.greenpeace.org/international/story/7487/illegal-logging-fuelling-conflict-and-damaging-livelihoods/ [Accessed on 29.08.2023], (2015).

Use of chemicals

Even though wood is a versatile resource that can be used for all kinds of products, it needs further treatment before it is usable. For example, despite its positive attributes, the use of wood in advanced engineering structures is limited beyond conventional applications such as construction and furniture. This is due to its natural disadvantages, including high water absorption, inadequate dimensional stability, or poor mechanical performance.¹³⁵ Akpan, E. I., Wetzel, B. & Friedrich, K. Eco-friendly and sustainable processing of wood-based materials. Green Chemistry 23, 2198–2232 (2021). Therefore, to make the wood water resistant (e.g., outdoor furniture), it must be impregnated to withstand every type of weather, including rain. These used products are mainly chemical and, therefore, can be potentially harmful if they come into contact with the environment (e.g. soil), e.g. through an incorrect application.¹³⁶ Schütze, G., Umweltschutz, Wald und nachhaltige Holznutzung in Deutschland. UBA (2021). Similar problems can happen with the use of plant or wood preservatives.¹³⁷ Schütze, G., Umweltschutz, Wald und nachhaltige Holznutzung in Deutschland. UBA (2021). To address this challenge and minimize the possible threats, it is vital to use, e.g. water-soluble wood preservatives or reduce the “[i]mpacts on non-target organisms and the material balance of the forest to a minimum.”¹³⁸ Schütze, G., Umweltschutz, Wald und nachhaltige Holznutzung in Deutschland. UBA (2021).

4.2.2.     Challenges in the structure of the wood-based industry

Global supply chains

The advanced globalization led to a wood-based industry in which several business units are interconnected and integrated. These include “forest entrepreneurs, carriers, pulp and paper mills and sawmills”¹³⁹ Dalalah, D. et al. An Integrated Framework for the assessment of environmental sustainability in wood supply chains. Environmental Technology and Innovation 27, 102429 (2022). . This interconnection could challenge the holistic transformation to a sustainable wood-based industry as global aspirations and perceptions to increase sustainability in the industry vary from region to region¹⁴⁰ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). ¹⁴¹ FAO. The State of the World’s Forests 2009, Rome, FAO (2009). , but mostly without directly addressing the forests or wood products but rather through the bioeconomy strategies or different action plans.¹⁴² Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). Furthermore, inefficient production or process is still an obstacle to the industry’s transformation.¹⁴³ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022).

New technology and innovations

Even though there have been several new and sustainable product developments, many of those products are “still experimental, and it is uncertain how product development will materialize and how markets will take up these innovations.”¹⁴⁴ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022). Many of those products are most likely not realistically feasible or will take a long time (up to 20 years) to enter the market¹⁴⁵ Hassegawa, M. et al. Innovative forest products in the circular bioeconomy. Open research Europe 2, 19 (2022). . The rate at which new products are being developed highly depends on the industry’s investment, which also presents significant risks. ¹⁴⁶ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022).

Risks for investment

Besides the many positive aspects of the sector, the high vulnerability to the consequences of climate change and the high damage amounts in the event of environmental disasters represent an investment constraint, which in turn might lead to negative consequences in the industry’s sustainable development. Another risk in investing can be found in the changing strategies and policies of different governments or organizations, like higher taxes or customs regulations.¹⁴⁷ Capolaghi, L. Forestry funds: the emerging star of alternative investments. EY Luxembourg https://www.ey.com/en_lu/private-equity/forestry-funds–the-emerging-star-of-alternative-investments [Accessed on 29.08.2023], (2023). ¹⁴⁸ Brown. The outlook for future wood supply from forest plantations. Available at https://www.fao.org/3/X8423E/X8423E12.htm [Accessed on 29.08.2023], (2000).

4.2.3.     Lack of reliable (current) data

Excessive analysis and evaluation of the sectors’ statistics is needed to control the development towards more sustainability.¹⁴⁹ Allot et al. The next wave in forestry productivity. McKinsey & Company https://www.mckinsey.com/industries/paper-forest-products-and-packaging/our-insights/data-the-next-wave-in-forestry-productivity (2020). Nevertheless, it is to control the development and estimate future demand for wood and forest resources and the number of needed investments and funding.¹⁵⁰ Allot et al. The next wave in forestry productivity. McKinsey & Company https://www.mckinsey.com/industries/paper-forest-products-and-packaging/our-insights/data-the-next-wave-in-forestry-productivity [Accessed on 29.08.2023], (2020). However, it is problematic that insufficient data and research could function as a basis for future conclusions and estimations.¹⁵¹ Hetemäki, L., Nasi, R., Palahi, M., Cerutti, P. & Mausch, K. The Future of Wood – towards circular bioeconomy (2021). Specific information on certain products like wood as an energy source is still unreliable or missing, or information on how substituting fossil-based products with wood products can benefit the reduction of emissions and the mitigation of climate change impacts.¹⁵² Hassegawa, M., Van Brusselen, J., Cramm, M. & Verkerk, P. J. Wood-Based Products in the Circular Bioeconomy: Status and Opportunities towards Environmental Sustainability. Land 11, 2131 (2022). ¹⁵³ FAO. The State of the World’s Forests 2022. Forest pathways for green recovery and building inclusive, resilient and sustainable economies. Rome, FAO (2022). Data regarding the substitution effects are often estimated for specific products, making a general overview of the sector’s status difficult but not impossible. Furthermore, the missing data might lead to a significant uncertainty issue that can result in further consequences, mostly economically, which causes more consequences.¹⁵⁴ Verkerk, P.J. et al. The role of forest products in the global bioeconomy – Enabling substitution by wood-based products and contributing to the Sustainable Development Goals. Rome, FAO (2022).

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