STATE-OF-THE SMART UEF JOENSUU KUOPIO SAVONLINNA. Bioeconomy and forest management Case Finland. Jyrki Kangas, Professor of Forest Bioeconomy

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1 STATE-OF-THE SMART UEF JOENSUU KUOPIO SAVONLINNA Bioeconomy and forest management Case Finland Jyrki Kangas, Professor of Forest Bioeconomy

2 Bioeconomy, what is it? Bio-economy is said to be the next wave of economy. It is about producing, processing, consuming and recycling renewable natural resources, and services based on them. Bio-economy promotes 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. The most important natural resource in Finland is the forest, and trees of forests

3 Bioeconomy: The next wave of economy; renaissance of the natural resource economy (saving the mankind) GDP and wellbeing Natural resource economy Fossil economy SOURCE: Biotalous.fi

4 Finland in the forefront of sustainable bioeconomy Current bioeconomy in Finland: Total output more than 60 bill. eur, share from exports about 26 % More than employed persons More than 50 % of the total Finnish bioeconomy is based on forests and trees Bioeconomy is in the core of the sustainable development of Finland The growth of Finnish bioeconomy is based on forests and trees Forest-and-wood-based bioeconomy in Finland grows rapidly right now New investments on sawmilling anf wood-working industries A huge investment decision on a bioproduct factory by Metsä Group (Äänekoski), an investment plan of a similar size by Finnpulp Oy (Kuopio), a bit smaller one in Kemijärvi Wood in costruction, biofuels, textiles, plenty of new bioproducts

5 Strategic goals Implementation and monitoring Finland s bioeconomy strategy; strategic goals 1. COMPETITIVE ENVIRONMENT FOR BIOECONOMY 2. NEW BUSINESS FROM BIOECONOMY 3. STRONG KNOW-HOW BASE FOR BIOECONOMY 4. USABILITY AND SUSTAINABILITY OF BIOMASS Sustainable bioeconomy solutions are the basis of Finland s welfare and competitiveness. SOURCE: Biotalous.fi

6 Source: Bio-based Industries Consortium

7 Bioeconomy value chains Wood processing Chemistry Biomass Energy Food Construction Ecosystem services Products Expertise Bioeconomy value chains produce goods, services and solutions sustainably and through clean technologies e.g. cleantech SOURCE: Biotalous.fi

8 Bioeconomy (in Finland), and its growth, cannot be sustainable without sustainable forestry Growth of bio-economy (in Finland) is dependent on forests and wood Growth of bio-economy means increasing demand on different uses of forests and on wood biomass If the biofactory investments come true, the use of wood increases a lot, even by 15 mill m3/a, which means increasing cuttings (m3, ha) At the same time, other aims and uses of forests are increasingly required (nature tourism, biodiversity, etc.), and conflicts may arise The acceptability of forestry and commensuration of different uses and objectives of forests are even more important in the future; participatory approaches are needed to manage this challenge State-owned forests will meet the greatest pressures Esityksen nimi / Tekijä

9 9 Wood flow from forest to mill in Finland 2013 (mill.m 3 sob) Annual growth 104 Total drain 72 Total removals 59 Commercial roundwood 54 Imported wood and chips Industrial use 64 Pulp and paper industry Chips 9 Logging residues, natural drain 13 SOURCE: FFIF, Luke Firewood 5 Wood products industry 26

10 Wood will serve many functions in the future; some examples of products Intelligent packaging that monitors the intake of medicine or edibility of food products Remotecontrolled paper price tags Flexible screens made of nanocellulose Sound systems and car parts made of wood composite Biodegradable packaging materials

11 On grounds of forest statistics: use of wood is sustainable 120 Annual increment Total drain Industrial roundwood Mill. m SOURCE: FFIF, Luke

12 Wood stock inceases all the time; carbon sink Mill. m 3 Broadleaved Spruce Pine SOURCE: FFIF, Luke

13 Increasing cuttings sustainably? What does sustainable use of forests mean? On grounds of the statistics: for sure, we can increase cuttings sustainably from the viewpoint of wood production, and we should do so However, sustainability can be defined in various ways; which are the correct weights of different dimensions of sustainability (economic, ecological, sociocultural); there are no correct weights instead, criteria depend on your preferences and interests E.g., nature conservation organisations argue that increasing cuttings in Finland would not be ecologically sustainable In the long run, total drain (including dying trees) will approach the total growth in any case; if we do not cut the trees they ll die and decay away If there is a demand for more wood and we think cuttings can be increased sustainably, next question is: how to get supply meet the demand

14 Annual growth > allowable cut > use of wood milj. m 3 Annual growth Annual allowable cut SOURCE: FFIF, Luke

15 Most wood comes from private non-industrial forests; % / % of productive forest land / cuttings (2012) [CATEGOR Y NAME] [PERCENT AGE] / 9 % [CATEGOR Y NAME] [PERCENT AGE] / 8 % Others 5 % [CATEGOR Y NAME] [PERCENT AGE] / 83 %* SOURCE: FFIF, Luke

16 Wood consumption was 64,5 million m 3 in 2013; achieving the objectives of the Bioeconomy Strategy requires that the increasing demand of wood is satisfied by domestic wood (and work) 100 In addition to the roundwood, the industry used 8,6 mill. m 3 sawmill chips milj. m 3 Domestic roundwood Imported wood Sawmill chips UEF // University of Eastern Finland SOURCE: FFIF, Luke

17 Pulpwood stumpage prices in Finland Four-week sliding average 20 EUR/m 3 sob Pine Spruce Birch Weeks UEF // University of Eastern Finland SOURCE: FFIF, Luke

18 How to increase the supply of wood biomass? In Finland we must rely mainly on private non-industrial forests and forest-owners; possibilities of Metsähallitus to increase cuttings? In market economy, increasing the price of raw wood; how much would be realistic from the viewpoint of the economic sustainability of the industry? Applying means of legislation and directives? An obligation to sell (according to management plans)? If so, then how about an obligation to buy? Perhaps by taxation, by subsidies, by other means of the carrot-andsticks approach? Developing the ownership structure and governance rules (of jointly owned forest holdings)?

19 More efficient wood production Anyway, increasing wood biomass supply will mean an increase in the total area of cuttings if wood production per hectare remains the same as it is now A silver bullet in the long term: let s increase the growth of forests (m3/ha) and, correspondingly, the sustainable allowable cut => more wood per each hectare harvested and per each contract of sale e.g. increase of the growth 105 => 125 mill.m3/a with the average supply ratio of 70% would mean 14 mill.m3/a more supply and with the same area cut (with more m3/ha in harvests) => same impacts on sceneries, biodiversity, recreation etc. and with the same amount of contracts of selling/buying wood How to still increase wood production? Possible even without the help of the climate change? But this would be worth of another plenary

20 At the same time also the demand for other uses of forests and trees increase Forest bio-economy consists also of a wide range of other products and services; such as game and hunting, recreation and nature tourism, berries and mushrooms, reindeer husbandry, consultation services, all ecosystem services For nature tourism, the most valuable tree is a standing tree Increasing the total area of cuttings would mean increasing impacts on scenery, biodiversity, tourism, and other ecosystem services but, in the long run, this can be alleviated by the more efficient wood production

21 To be expected in the short run Severe (political) debates can be expected on how to secure the supply of wood biomass for the increasing demand Especially concerning non-industrial private forests If normal markets fail? Company forests, state forests, institutional forests, import? A growing number of encounters of differing interests State forests are the easiest target for discussions Integration and commensuration of different forest uses becomes ever more important Conflict management, multi-objective planning, participatory approaches, collaboration

22 Pushing the production possibities boundary, case of two commodities Simultaneously: more wood and more other commodities and services - this is in the core of forest bioeconomy research

23 Thanks For Your Attention! uef.fi

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