17 – 18 September 2015 Joensuu, Finland

Barents Forest Forum

MINISTRY OF AGRICULTURE AND FORESTRY

Wood Construction and Forest BioenergySpecific ThemaTic areaS

Organisations Willing to be contacted for B2B-event

Expert Presentations

Participants

56 % from finland | 34 % from russia 34 % from research and education institutes | 34 % from business companies

8 countries

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Barents Forest Forum – Results – 3

Barents Euro-Arctic Council, Committee of Senior Officials, Chair of the Committee Marja-Leena Vuorenpää, Ministry for Foreign Affairs of FinlandFor more than 20 years the Barents cooperation has provided a framework for authorities, experts and other actors at national and regional levels to work for sustainable social and economic development. The Finnish chairmanship has worked for dynamic, inclusive and sustainable regional development. Special attention has been paid to economic cooperation, transport and logistics, environment and climate change and youth cooperation.

Chairman, Senior Adviser Tatu Torniainen, Ministry of Agriculture and Forestry of FinlandThe Barents Forest Sector Network (originally the Forest Sector Task Force) was established in 2000. The goal of the BFSN is to economically, socially and environmentally promote the sustainable management of forest resources, to contribute to conditions for the sustainable and multifaceted use of forest resources, and to promote ecosystem services in the Barents region.

Regional Planning Manager Pasi Pitkänen, Regional Council of North KareliaAbout half of Finland’s bioeconomy is a forest bioeconomy. The bioeconomy turnover in North Karelia is about 1.7 billion Euros and the aim of the region is to that raise turnover by one billion Euros by 2025. The Climate and Energy Programme of North Karelia 2020 was accepted by the Regional Board in 2011. North Karelia will move with determination towards a region that is free from fossil oil by 2030. Renewables now make up 67% of all energy consumption in North Karelia.

Wood-based energy generation provides more than half of all total renewable energy. In recent years there has been over 100 million Euros investments towards forest bioeconomy in the region, such as at the Fortum pyrolysis oil plant, through Stora Enso Enocell investments and pellet fac-tory investments. The planned investments (over 300 million €) will create around 1,000–1,250 new jobs in North Karelia.

Communications Manager Mikael Sjövall, NEFCONEFCO is an international financial institution established by the Nordic countries. It offers loans and equity investments for environmental projects and companies. NEFCO enables the export and sales of Nordic green technology to the neighbouring region. NEFCO products are loans, equity investments, export financing, grants and carbon credits. NEFCO s involvement in the forestry sec-tor is related to renewable energy and the use of wood-based biomass, investments in the furniture industry, heating solutions relying on wood chips or pellets, the reuse of sawdust for the production of energy, feasibility studies and investment plans, and the sustainable management of forests. Recognised challenges in the Eastern European countries are their dependence on oil, coal and gas, difficulties related to logging permits, dysfunctional wood-based bioenergy markets, the export of logging residues and wood chips, and a lack of bioenergy clusters and incentives for investing in renewable energy. Positive movements are expected in the future in biofuels, liquefied or torre-fied biomass for energy production, energy savings, and new data on the environmental impact of incinerating biomass.

Executive Summary

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Professor Jyrki Kangas, University of Eastern FinlandBioeconomy is about producing, processing, consuming and recycling renewable natural resources, and about the services based on them. Bioeconomy promotes a systemic change from using non-renewable resources to renewables. It uses clean technologies, makes us less dependent on fossil fuels, maintains ecosystem services, promotes economic development and creates new jobs. Bio-economy is also a tool of central importance in combating climate change, increasing competition for natural resources and regional development. Bioeconomy represents about 26% of Finland’s to-tal exports. All side streams of biorefinery mills will be used as maximally as possible for different kinds of bioproducts or energy purposes. The bioeconomy in Finland cannot be sustainable or grow without sustainable forestry. In the long run, the total drain (including dying trees) will approach toal growth in any case, and if we do not harvest the trees, they will die and decay away.

Increasing the total area of cuttings would mean increasing impacts on scenery, biodiversity, tour-ism, and other ecosystem services, but this could be alleviated by more efficient wood production. In the world of a growing forest bioeconomy, with increasing harvests, this may be possible through the intensification of forestry.

Senior Researcher Eugene Lopatin, Natural Resources Institute FinlandThe theoretical potential of the Russian forest resources is huge. The Russian Forest Sector Outlook to 2030 is driven by potential supply. Wood availability can be reviewed in three categories – theo-retical potential, accessible potential and free resources. In the western parts of Russia the actual allowable cut is used moderately. Limiting factors are demand, accessibility of forest resources and the structure of accessible forest resources. The majority of wood resources are not accessible.

Accessible growing stock has been defined as stock volume more than 80 m3/ha and not more than 1 000 meters from the road. Official forest inventory data is not public and is outdated for 76% of the forest areas. The current investment potential of the Russian forest sector, without the construction of all year around road, is 47 million m3 per year (= 10 big projects). The investment potential with road construction is 100 million m3 per year (= 30 big projects). Russia’s low rating with international agencies will limit potential investment. Intensive forest management results in better financial profit than extensive forest management.

Customer Advisor Heikki Nivala, Metsäkeskus (Finnish Forestry Centre), KemijärviThe Kemijärvi pulp mill was closed in 2008. The new integrated mill investment requires the im-provement of railways and roads. In Lapland and North-eastern Finland, wood supply and demand are not balanced and there is insufficient demand for pulpwood in particular. Young forests need thinning, because they are behind the expected objectives according to the allowable annual cut. Successful investment needs good cooperation with stakeholders at local, regional and national levels. Innovative biorefinery mills seem to be a profitable investment according to feasibility stud-ies. A decision whether to invest will be made by the company at the beginning of 2016 and the mill will function at its full capacity by 2020. The required investment is about 800 million Euros, 160 staff will be employed, and the main products will be microcrystalline cellulose (MCC), dissolving pulp and pulp. The estimated roundwood consumption has been evaluated as 2.3 million m3.

Managing Director Timo Saarelainen, Green Fuel Nordic OyThe company is a corporation with strong technology partners and sound strategy. It produces second generation biofuels for heating and transportation applications, and is planning five bio-refinery investments in Finland. One biorefinery production unit provides work for 170 people and wood consumption is 350 000 m3. In the company’s view, up to 20 biorefinery investment programmes are possible in Finland (sustainable use of the forest) and the company is also actively seeking business possibilities in northwest Russia. Pyrolysis oil production is more profitable for small-diameter wood than pulp production.

Managing Director Olga Rakitova, INFOBIOThe export duty on fuel chips and sawdust was reduced from 2.5% to 1.25% from the 1st of September. This is one of the main milestones in the development of biomass trading between Finland and Russia. Pellet and briquette production is developing faster than chip production. Russian pellet exports increase by 10–15% every year. Russian annual export to the European Union is about one million tons of pellets per year. Six EU countries are the main Russian pellet consumers – Denmark, Sweden, Italy, Finland, Germany and Latvia. A new law is expected which would prohibit wood burning in the forest and wood waste landfills in 2018. The devaluation of the Russian rouble attracts more companies to pellet production, which is oriented around the export of pellets to the EU and Korea.

Bioeconomy uses clean technologies, makes us less dependent on fossil fuels, maintains

ecosystem services, promotes economic development and creates new jobs.

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Research Scientist Johanna Routa, Natural Resources Institute FinlandWood based fuels account for 25% of the total energy use in Finland. Energy price per MWh is about 20 Euros, when using forest chips. As a result of warm winters, energy wood use decreased after 2013 to annual level of 8 million m3. A low coal price has affected the use of forest chips in Finland. In EU-area, Finland and Sweden are the biggest users of forest chips. The raw material bases of Finland and Sweden are different. In Finland more stumps and small-sized trees are used, whereas in Sweden logging residues are the most important energy wood raw material. In Finland, the use of pellets has steadily increased in recent years. With a consumption of about 17.5 million tonnes of pellets in 2013, the EU is already the world’s largest wood pellets market. The production capacity of the eastern European pellet industry will increase by almost 2 million tonnes per year from the beginning of 2016. The United Kingdom has the highest level of wood pellet imports. Pellets imported to EU-28 countries come mainly from North America. Finland and Ireland are the biggest global energy peat producers. Finnish targets (2020) for the use of renewables will be achieved when the use of industrial by-products increases. In Finland the target for the use of forest chips has been set at 25 TWh which accounts for 13.5 million m3 of wood. Efficiency in supply chains has to be improved and quality issues should be addressed.

Deputy Head Alexander Kostenko, GFTN Russia (Global Forest & Trade Network)The Boreal Forest Platform is a tool to reach a balance between the development of the forest industry and the protection of high conservation values in Russia. The forest area of Finland is 2% of the forest area of Russia, but Finland harvests 65 million m3 annually and Russia about 200 million m3. The massive degradation of accessible forests is a threat both for valuable timber and biodiversity. The transformation of tree species composition in secondary growth forests continues to move from coniferous and oak trees to aspen and birch, which are of low value to the industry. The Boreal Forest Platform has three main objectives. The first is to achieve real changes in the regulatory framework so as to provide a transition to a sustainable intensive model of forestry. The second is to ensure the conservation of biodiversity, ecosystem services and social values in intensively managed forests through a science-based zoning of the landscape and stakeholder dialogue. The third is to stimulate businesses and guarantee the protection of investments in the course of transition to a more intensive and sustainable forest management.

Barents Forest Forum – Results – 5

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Research Scientist Henrik Heräjärvi, Natural Resources Institute FinlandFinland is the most wood dependent country in the world. New wood-based value chains are expected to boost the renewal of the forest sector. The aim of the Bioeconomy Strategy (2014) is to push Finnish bioeconomy output up to 100 billion Euros by 2025 and to create 100,000 new jobs. 70% of Finnish consumption of solid wood products goes to construction. Wood product manu-facturing processes are energy efficient and by-products provide most of the energy needed. Saw logs make up more than 70% of stumpage income for the forest owners, therefore roundwood is not mobilised from the forests without well-functioning wood products industries. Timber is the only construction material for which the consumers and dealers require certificates of sustainable sourc-ing. Timber construction has great cleantech potential. ‘Cleantech’ refers to technologies, services, solutions, process innovations or products that help to reduce the environmental load caused by human activity, to save energy and natural resources, and to improve the living environment. The timber construction sector already represents state-of-the-art technologies in terms of industrial production processes, energy efficiency, indoor air quality, recycling, IT and the replacement of non-renewable or endangered materials. Construction activities account for half the exploitation of natural resources and produce 40% of the waste globally. Wood is the only renewable material available for industrial construction processes. Wood product industries should be encouraged to collaborate more closely with the cleantech sectors. Such collaboration has not taken place, so far, but could prompt major business innovations and open huge new market possibilities.

Advisor Benjam A. Øveraas, Innovation Norway, Sustainability Division (the Go-vernment institution for innovation and development)The Norwegian government supports a wood-based innovation programme. The main objective is to develop competitive wood-based solutions and to create a market for the increased use of wood. The programme consists of four elements: pilot projects, development projects, mobilisation and large-scale timber construction. Challenges in wood construction are the construction itself, sound isolation, acoustics and energy use. Glued laminated timber has been used in many objects. 80% of Norwegian student housing is now built with cross-laminated timber. Public procurements in wood/timber use have been initiated by governmental transportation agencies. Limiting the carbon footprint of expanding cities is one of the most important arenas for wood.

Technical Director Anu Näätänen, Town of JoensuuCity planning has guidelines for urban construction – new ideas, old building preservation, public buildings and land ownership. The beginning of the 1960s was the end of wooden buildings in Joensuu City. Planning regulations can be related to facade materials and building preservation (e.g. architecture, surroundings, landscape). Nowadays, there are many wooden public buildings and structures in the city, constructed in the beginning of the 21st century.

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Managing Director Juha Virta, Crosslam Kuhmo OyCLT Wall and floor elements are made by cross laminating layers of stress graded timber. Cross laminating guarantees the strength and stability of the wooden structure. The first CLT boards were made in Austria in the early 1990s and the first CLT factory started production in 1994. CLT has been at the heart of environmentally conscious building in central Europe for the last decade. The CLT production process consists of the preparation of layers, gluing, pressing and processing. CLT is a material that makes it possible to construct multi-storey buildings in wood and increase the speed of construction on site dramatically. CLT can also be left visible, if the surface material is correctly chosen. The advantages of CLT constructions are thermal, seismic and moisture proper-ties, their strength and eco-friendliness.

Technical Customer Service Manager, Sirpa Välimaa, Stora Enso OyjWood being renewable, sustainable, recyclable, and without competition for food, proves to be an excellent material to answer future needs. Stora Enso s strategy is to transform itself from a tradi-tional paper and board producer to a renewable materials growth company, focusing on customers and innovation. In Enocell, Stora Enso produces paper pulp, dissolving pulp, tall oil, and turpen-tine. The mill is self-sufficient in energy and actually produces 25% excess energy, which is sold to the national grid. One of the production lines produces textile pulp, which started in 2012, and last

year mill production represented 7% of the imported textile pulp in China. Last year, the main ma-terial used in global textiles was still polyester, with a share of over 65% of the market. Cotton made up less than 30% and the share of wood fibres in textile production was only 5%. Wood is a sustain-able and renewable solution to the challenges faced by this industry and will play an important role in its transformation.

Administrative Manager Urpo Hassinen, Eno Energy CooperativeThe main purpose of the Eno Energy Cooperative is to produce heating energy by providing wood chips for the district heating plants. Their strategy is to ensure better prices for their forest owner members and to support the use of local renewable energy. The cooperative was founded by 12 pri-vate forest owners and now there are some 52 members. Team work brings results. The business was started in 1999. About 2 million litres of oil (27 000 loose-m3 forest chips) has been replaced with energy wood, and thus over 2 million Euros have been saved by the local economy. The employment created by using forest chips are between 7-10 work years. Local energy sources bring safety and independence in times of possible energy crisis. The use of clean energy means that the combustion of wood does not result in a net increase in CO2 emissions. Carbon dioxide emissions are reduced by about 5 million kilos annually. The ashes provide excellent benefits which can be returned to the forest as nutrients.

Wood is a sustainable and renewable solution to the challenges

faced by the textile industry and will play an important role in its transformation.

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