3.5 Increasing value added in different sectors

A number of new forest-based products and services are under development and coming to the market, including food packaging, textiles and biocarbon and its composites. Wood-based biodegradable materials will increasingly be used in place of fossil-based plastics. The multiuse of forests and forest-based services will also diversify and increase. The importance of digitalisation will increase in the sector, for example in trade, and interest in automation, robotics, machine learning, artificial intelligence and big data in the supply chain will increase. They also provide preconditions for improving resource efficiency, which will promote the more sustainable use of raw materials. In practice, increasing efficiency in the use of raw materials means that more products and value added are obtained from the same amount of wood. Side streams are utilised for the highest possible degree of processing. Trees and timber products as carbon sinks or stores will contribute to increasing the sector’s potential for earning income.

The forest sector aims to establish not only intermediate products (e.g. cellulose), but also to manufacture products with a higher degree of processing in Finland, increase the formation of added value for the product portfolio by means of new products and services, improve the management of material flows, for example by means of digitalisation, and increase the utilisation of side streams in products with a higher degree of processing while respecting the principles of the circular economy. The new revenue logics support the desired development.

Sustainable forest management is at the core of the forest-based bioeconomy. Versatile forests with a high level of biodiversity are the ecological foundation on which all forest management and use is based. The carbon sequestration capability of forests will also be managed. Many objectives will be taken into account in a balanced manner when planning forestry and promoting a sustainable bioeconomy.

Chemical forest industry

As the paper market declines, the chemical forest industry has had to look for new areas of business. New business is being sought from a variety of biomaterial applications of which bio-based chemicals and fuels, packaging, textiles and biocomposites are interesting markets for the future.  Entering these markets will require both the development of new technology and expertise and new business models and cooperation structures.

Finnish cellulose expertise is of a very high standard, and it offers an opportunity to have a try at the bio-based materials market with new and advanced cellulose materials.

MEASURES

Companies are encouraged to launch new industrial ecosystems with the aim of developing technologies and business concepts around new bio-products 

• Pulp fibre from wood will be utilised in new applications such as textiles, biocomposites, packaging, etc.
• Utilise forest industry side streams as new products (e.g. lignin, extractives, hemicellulose)

Promoting an increase in value added for bio-based packaging

• Accelerate the development of cellulose-based packaging and related material-neutral technologies for the needs of the global food and beverage industry
• Ensure the safety of Finnish bio-based packaging products as well as their competition and environmental performance in food packaging through the RDI programme and by strengthening competence
• Support the circulation of packaging with digital solutions and deposit systems
• Encourage cooperation throughout the packaging value chain

Responsibility: Ministry of Economic Affairs and Employment, Ministry of Agriculture and Forestry

Actors: Business Finland, VTT Technical Research Centre of Finland, CLIC Innovation, companies, vocational institutions, higher education institutions, research institutes

Strengthening the resource-efficiency and cost-effectiveness of the forest sector through digitalisation

• Invest in the digitalisation of wood procurement and biorefinery processes and in precision steering accelerated by Big Data so that the resource-efficiency and cost-effectiveness of the entire value chain is improved, thus increasing the amount of raw material used
• Increase the formation of forest bioeconomy value added by making the use of Big data more efficient so that the raw material is steered to products and services with the highest possible value added

Responsibility: Ministry of Agriculture and Forestry, Ministry of Economic Affairs and Employment

Actors: Finnish Forest Centre, Natural Resources Institute Finland, Business Finland, VTT Technical Research Centre of Finland, vocational institutions, higher education institutions, companies

The wood products industry and construction

Sustainable wood construction and other timber products have significant potential for carbon sequestration and storage, as they serve as long-term carbon stocks. The challenges and opportunities encountered by the sawmill industry and timber product manufacturers are related in particular to the resource-efficient use of materials throughout the manufacturing and end-use processes and to the replacement of fossil-based materials and products used in construction with renewable, low-carbon timber products.

The efficiency and productivity of construction must be significantly improved. Industrial wood construction provides an opportunity for a productivity leap in the entire construction sector. In addition to product development in the sector, this will require the development of the entire construction process; overall optimisation of design, industrial prefabrication and site operations. The focus must be on design and product standardisation, process development of industrial prefabrication and the optimisation of work site operations as enabled by industrial prefabrication. The development of digital tools supports and is a prerequisite for the overall optimisation of the industrial wood construction process. There is a need for product development, especially in the recycling and reuse of materials as well as low-carbon fibre-based insulation materials in wood construction. The objective must be optimal building performance with minimal environmental and climate impacts.

MEASURES

Improving the resource efficiency of the wood product industry and wood construction in energy, raw materials, labour, information and capital use

• Make use of EU and Finnish low-carbon construction programmes, which support advanced overall solutions for housing, construction and infrastructure, to promote timber products and wood construction.
• Encourage the introduction of new technologies to increase energy and material efficiency
• Develop comprehensive information systems from the tree stump to the customer
• Make better use of the raw material base in production processes and customer solutions than previously

Improve the product properties of wood in the current areas of use and expand use to new application areas

• Improving the longevity of wood by utilising wood modification and surface modification technologies
• Develop fibre-based insulation materials
• Develop bio-based chemicals, such as saturation, gluing and surfacing substances

Promote the use of wood and other natural materials in new construction

• Promote the development and use of Finnish renewable construction products by directing research and development inputs to renewable construction materials, product parts and process development in construction. Development targets include wood construction in its entirety, glues, insulation, paints, fire safety solutions, infrastructure construction, additional layer construction, etc.
• Promote the system leap in apartment block construction by investing in the broad-scoped development of industrial wood construction such as its digital development, increasing the competence level of experts in the field (especially demanding wood structures), developing the overall process of industrial wood construction (design – industrial prefabrication – site operations) and developing the role of construction processes and developer competence
• Promoting wood construction in public procurement.

Support the development and export of construction products that increase the value added of wood

• Launch an export programme for log and solid wood buildings by supporting industrial investments and exports and increasing the incentives based on the unique climate and environmental profile of logs and solid wood
• Promote the export of wood-based building components by supporting industrial investments, developing component exports and networking with the construction sector in the target market through product exports

Responsibility: Ministry of the Environment, Ministry of Agriculture and Forestry, Ministry of Economic Affairs and Employment

Actors: VTT Technical Research Centre of Finland, Finnish Environment Institute, Natural Resources Institute Finland, vocational institutions, higher education institutions, Finnish Forest Centre, the sector’s industry and companies

Versatile food production and the export of high-quality products will change agriculture and food industry processes. For example, the growing need for new plant-based food products will create opportunities for the entire food chain. In addition, many other solutions under development, such as vertical farming and cellular agriculture, can open up new business and export opportunities for Finnish agricultural and food products.

The food sector’s share of the Finnish bioeconomy’s value added is growing.  The increase in value added will require that cultivation techniques are improved, new crops are introduced and self-sufficiency is increased, for example in feed.  In the next few years, value added will be created in the Finnish and export markets with high-quality food and beverage products and digital information on product responsibility.

The aim of the food sector is to increase the value of its product portfolio, enhance the use of production inputs through digitalisation and utilise the regional strengths in the food chain. Circular economy methods are particularly aimed at improving the circulation of nutrients. The opportunities provided by digitalisation are widely utilised in the development of production technologies and methods.

MEASURES

Developing agriculture and food economy in a consumer-oriented manner with the aim of sustainable and profitable agriculture and food economy

• New technologies will be utilised in the development work throughout the entire food value chain
• Develop production and products based on plant-based raw materials (including natural products) into food (including synthetic food), growing medium, textiles, building materials, etc, in a determined and systematic manner.
• Developing raw materials and products of high value added from agricultural and food economy side streams for both the Finnish market and export markets
• Digitalisation and data will be strengthened as a base for value added and new services (incl. data collection required for organic production)
• Participate in international networks and value chain-based development projects such as EU research and innovation projects;

Responsibility: Ministry of Agriculture and Forestry and Ministry of Economic Affairs and Employment

Actors: Natural Resources Institute Finland, VTT Technical Research Centre of Finland, other research institutes, vocational institutions, higher education institutions, companies

Utilise genetic resources more diversely than before and create opportunities for the improved efficiency of breeding processes

• The legislation on the introduction of new gene technologies will be adapted in the light of scientific and technical progress;

Responsibility: Ministry of Agriculture and Forestry, Ministry of Social Affairs and Health, Ministry of Economic Affairs and Employment, Prime Minister’s Office

Actors: Plant and animal breeding operators

The bioeconomy plays an important role in energy production in Finland. Bioenergy, meaning energy produced from biomasses, is our most important source of renewable energy. The growth in biomass material use and the higher value added are expected to transfer the by-product streams that were previously used directly as energy directly to further processing. On the other hand, the termination of peat use in energy production is expected to increase the demand for biomass and, in particular, for wood fuels in energy production in the next few years.

MEASURES

Increasing the efficiency of bioenergy raw materials and production

• Enhance the value chain from biomass harvesting and storage all the way to energy plant conversion and recovery technologies
• Further develop logistics for the harvesting and storage of energy biomasses, taking into account security of supply considerations, and develop the predictability of the availability and adequacy of Finnish energy biomasses
• Develop value chains based on biogas, e.g. build biogas plants and biogas cleaning and transport processes at farms, build a biogas distribution network and develop the distribution markets for recycled fertilisers

Actors: Energy and forestry sector actors, Energy Authority, Finnish Safety and Chemicals Agency, National Emergency Supply Agency, vocational institutions, higher education institutions, Finnish Forest Centre

Supporting the development and production of electric fuels

• Support bioenergy hybrid pilots and demos to increase the readiness level of technology
• Develop BIO-CCU processes with the aim of achieving negative carbon emissions from industry
• Create hybrid concepts and process integrations that produce not only energy but also materials

Responsibility: Ministry of Economic Affairs and Employment, Ministry of Agriculture and Forestry

Actors: VTT Technical Research Centre of Finland, Business Finland, research institutes, vocational institutions, higher education institutions

Finland has unique inland water systems, coastal areas and an archipelago, rich fish resources, large freshwater and groundwater reserves and efficient water supply. These resources combined with advanced technology and expertise will facilitate both the sustainable utilisation of natural water resources and the substantial growth of business based on water supply solutions. Climate change and urbanisation emphasise the importance of a well-functioning water supply, and this also involves a significant potential for exporting technology and expertise (Growth portfolio 2.0). The utilisation of new technologies such as digitalisation, automation, robotisation and the platform economy will also facilitate the growth of value added.

Water expertise clusters, ecosystems and networks have already emerged in many regions in Finland. These include the region’s municipalities, actors in the water, energy and waste sectors, other companies and educational institutions. However, cooperation between regional and county centres of expertise and national cooperation must be further strengthened.

In water supply, wastewater in particular is seen as a resource and nutrients and other valuable substances, such as metals, can be recovered from it. Heat energy can also be recovered from waste water, and biogas can be produced from the sludge produced as a by-product of wastewater treatment. Significant sustainable growth potential also exists in aquaculture as well as in the processing of algae, large numbers of underutilised fish species (e.g. carp and herring) and by-flows from the fish industry into food products and high added value products (nutrient supplements, the cosmetics industry and medicine-like products).

MEASURES

Securing a high-quality and efficient water supply and utilising the related export and growth potential in cooperation between the public and the private sectors

• Development of experimental and piloting environments, reference and pilot projects and industrial symbioses in the water sector for testing and utilising new innovations and technologies, such as the recovery and utilisation of energy and material resources contained in urban waste water, the production of new water, the removal of pollutants and the sustainable use of sludges.
• Promote the implementation of technological innovations and new methods and business models for the renovation and modernisation of water infrastructure. Utilise public investments in the water sector as references in the development of export business

Responsibility: Ministry of Agriculture and Forestry, Ministry of Economic Affairs and Employment, Ministry of the Environment

Actors: Companies, actors in the water, energy and waste sectors, research institutes, educational institutions, municipalities, regional authorities

Multiplying the added value to water biomass

• Support sustainable growth and renewal of Finnish fisheries by targeting development and investment support to the largest and most resource-sustainable growth opportunities. The specific objective is to promote the processing of abundant but underutilised fish species, algae and by-streams from the fish industry into food and products with high value added (nutrient supplements, cosmetics and pharmaceutical-like products) and to accelerate their export.
• Promote the development and deployment of new aquaculture technologies, such as water recirculation plants, on land, in inland waters and in open sea areas, including, taking into account the achievement and maintenance of the good state of both inland and sea waters. Sustainable aquaculture opens up opportunities for the sustainable growth of fish and algae production and exports of related technology and expertise. Cooperation between the private and public sectors will accelerate the development and deployment of new sustainable operating models and technologies promoting water protection, such as measures to reduce nutrient emissions

Responsibility: Ministry of Agriculture and Forestry, Ministry of Economic Affairs and Employment, Ministry of the Environment

Actors: Natural Resources Institute Finland, VTT Technical Research Centre of Finland, Finnish Environment Institute and companies

In addition to investments and new technologies, various services can be used to accelerate the development of the bioeconomy. Bioeconomy value chains include strong service production related to the growth, harvesting and transport of bioresources. In Finland, both technology suppliers and consultancy companies are competent and internationally respected. In recent years, technology suppliers have significantly increased the service business related to their products.

Consultations concerning technical services and the bioeconomy are expected to increase and diversify significantly as a result of digitalisation. The integration of digitalisation with services will also bring new opportunities for reaching consumers.

The natural products sector

Natural products (berries, mushrooms, herbs, sap and ornamental plants) can be used to develop high value added consumer products with export potential. There are hundreds of companies in the natural products sector that practice the collection, cultivation or semi-cultivation of natural products. The commercial recovery of natural products is growing in the food, well-being and cosmetics industries and in the nutrition sector. Organic certification can be utilised in the natural products sector.

Increasing value added in the natural products sector

• Promote the use of natural products in the food, biotechnology, cosmetics, pharmaceutical and herbal industries.
• Create new business models by combining natural products with welfare services, health and tourism.
• Improve network-like cooperation across sectoral boundaries to develop innovative products and services related to natural products.
• Develop the business ecosystem of the natural products sector and the activities of the sector’s value network

Responsibility: Ministry of Agriculture and Forestry, Ministry of Economic Affairs and Employment

Other actors: Ruralia Institute, Finnish Forest Centre

Nature tourism

Tourism based on the biodiversity of natural ecosystems is becoming more versatile, growing and finding new ways for generating revenue. Nature as an environment enables a versatile range of activities (incl. cycling, fishing and hunting) on land, water and air all year round. Nature offers raw materials for the development of food tourism and well-being tourism based on nature in the operating environment. The ecologically sustainable utilisation of nature must be ensured in the provision of tourism services.

Productise and market services that utilise nature to both Finnish and foreign customers

• Promote the operating preconditions for tourism services and health and well-being services based on natural ecosystems, such as forests and water systems
• Promote cooperation between nature tourism and other nature entrepreneurs
• Strengthen innovation activities, customer-oriented marketing and sales
• Encourage the utilisation of technology and digitalisation in the sales and marketing processes and product development of nature tourism
• Communicate funding opportunities for SMEs and develop existing instruments to support development and experimentation
• Practical experiments with new funding and operating models and research supporting them will be implemented to ensure the quality of the natural environment. Develop statistics on nature tourism and recreational use to distinguish them from other tourism

Responsibility: Ministry of Economic Affairs and Employment, Ministry of Agriculture and Forestry, Ministry of the Environment

Actors: Natural Resources Institute Finland, Metsähallitus, companies, Finnish Forest Centre

The processing of bio and waste-based textile fibres and other materials needed in textile production, and the development and export of related technologies and competence, can increase the value added and exports gained from bioeconomy raw materials, and at the same time decrease the harmful environmental impacts of the textiles industry. The majority of the raw materials used in the textile and clothing industry remain primary raw materials, and the most common raw material in the clothing industry is polyester produced from oil. Today’s raw material production consumes a great deal of energy, water, chemicals and non-renewable natural resources, and produces emissions. In the EU, textiles consume the fourth largest amount of natural resources, and are the fifth largest source of CO2 emission. Globally, the textile sector produces more greenhouse gas emissions than shipping and air transport together. The textiles industry is aiming to implement more sustainable and circular operating models that can reduce climate and other harmful environmental impacts.   

The processing of bio and waste-based textile fibres and other materials needed in textile production, and the development and export of related technologies and competence, can increase the value added and exports gained from bioeconomy raw materials, and at the same time decrease the harmful environmental impacts of the textiles industry. The majority of the materials used in the textiles and clothing industry remain primary raw materials, and the most common material in the clothing industry is polyester produced from oil. Today’s raw material production consumes a great deal of energy, water, chemicals and non-renewable natural resources, and produces emissions.

The textiles industry is aiming to implement more sustainable and circular operating models that can reduce climate and other harmful environmental impacts. Sustainable bio-based and waste-based raw materials, material recycling and closed cycles as well as the development of related technologies, innovations and expertise play an important role. Clean technologies developed in Finland and innovative bio-based and waste-based fibres can in the future replace the use of traditional materials such as cotton, viscose or polyester in textile products. The development of new bio-based and waste-based textile fibres is a globally significant area of research and development in which Finland has great export potential.  

MEASURES

Launch a programme for the development of bio-based and waste-based textile fibres and materials 

• Supplement and develop the value chain in Finland required by the textiles industry’s closed cycle system and high value added production and develop missing parts (e.g. twine spinning and fabric weaving)
• Encourage industry actors to participate in international networks and value chains and to make use of EU research and innovation funding;
• Promote Finland’s profile as a centre of the bio- and waste-based textile sector at the EU level as part of the strong construction of the textiles sector’s closed cycle value chain in Finland.
• Develop the textile industry’s raw material base: Exploiting the side streams of agriculture and forestry and the food industry, and the use of new plant species and other bio-based raw materials in the textile industry;
• Develop new bio-based dyes and auxiliary chemicals
• Develop new technologies and methods for the utilisation of bio- and waste-based textile fibres
• Develop the assessment of the environmental and climate sustainability of textiles and the related flow of information all the way to consumers
• Develop the product design of both industrial textiles and clothing and circular economy business models

Responsibility: Ministry of the Environment, Ministry of Agriculture and Forestry, Ministry of Economic Affairs and Employment

Actors: VTT Technical Research Centre of Finland, Natural Resources Institute Finland, Finnish Environment Institute, Finnish Textile & Fashion, textile sector companies, higher education institutions

The chemical industry is undergoing a raw material revolution. The industry is shifting from fossil-based raw materials to bio-based, recycled and synthetic raw materials. In a carbon neutrality scenario commissioned by the chemical industry, the share of bio-based and recycled raw materials it uses would increase to 83% by 2050.

Bio-based chemical products come from forest industry side streams, crop cultivation and its side streams as well as municipal waste from which basic chemicals, transport fuels, solvents and composites can be produced.  The demand for bio-based plastics is growing not only as a substitute for oil-based plastics, but also because of their diverse properties. The development of technologies is still ongoing and will require additional investments.

The complex and varying composition of biomasses will require new and improved processes for component separation and fractionation as well as conversion and product cleaning. This also applies to the side streams of biomass processing and recycled bio-based products as raw materials.

The demand for bio-based chemicals is growing steadily. The preconditions for bio-based products will be strengthened as more and more political decisions restrict the use of fossil raw materials and consumers increasingly demand renewable alternatives.

MEASURES

Launching extensive ecosystem projects to develop biomass-based chemicals and fuels

• Ensure the availability of bio-based and side-stream raw materials to accelerate new production plant investments;
• Develop separation and purification technologies for biomass-based chemical manufacturing processes
• Utilise biotechnology’s new tools, such as synthetic biology and gene scissors
• Develop manufacturing technologies for bio-based plastic

Responsibility: Ministry of Economic Affairs and Employment, Ministry of the Environment, Ministry of Agriculture and Forestry

Actors: Companies, Business Finland, VTT Technical Research Centre of Finland, higher education institutions, the Finnish Climate Fund, other actors in the sector