Sustainable wood supply as cornerstone of circular economy

An efficient circular economy needs a sustainable supply chain

​Delivering an increasingly sustainable supply chain represents a fundamental cornerstone of Metsä Group’s forestry operations. Enhancing efficiencies, as well as implementing stricter environmental and ecological measures in sustainable forest management, have a considerable impact on how the group adds to the circular economy.


​For this first in a series of three articles exploring the complex topic of the circular economy (and the associated bioeconomy), we begin with the importance for Metsä Group of implementing and advancing a sustainable supply chain. The two later articles exploring circular production, and the utilisation of side streams, will continue to detail how the principles of circular economy are materialised in Metsä Fibre’s operations, in particular.

Forestry practices supporting circular economy

Defining the terminology

But first, we need to understand what is meant by this varying terminology above. For Metsä Fibre, defining the meaning of a ‘sustainable supply chain’ is relatively simple: at its heart, it is about sustainable forestry, it is about the forest as a renewable raw material, and it is about the certification and traceability of wood as a raw material. A process relatively easy to define on paper, but far more complex in reality, of course.

So, what is the ‘circular economy’? Definitions differ to some extent, but generally it may be summarised thus: an economic space where the value of products, material and resources are maintained in the economy for as long as possible, and the generation of waste is minimised.

A comprehensive circular economy roadmap concept generally includes seven utilisation routes: raw material, production, trade (or distribution), product use, collection, product end of life, and finally, energy recovery. Each of these seven routes can be fed back into the ‘loop’ by way of recycling, redistribution and remanufacturing, for example.

And then to the ‘bioeconomy’, an area of fundamental importance to Metsä Fibre. A workable definition might be this: the bioeconomy encompasses the production of renewable bio-based resources and the conversion of these resources and side (and waste) streams into value added products, for example bio-based products and bioenergy. The bioeconomy can be argued as adding an additional, organic, recycling pathway that expands the circular economy, and therefore, a comprehensive circular economy is not possible without the bioeconomy.

Bioeconomy as enabler of comprehensive circular economy

Understanding the supply chain

“When we talk about the circular economy and Metsä Group, for most of the public I think the concept is still a little bit complicated,” begins Jussi Ripatti, Director, Sustainable Forestry, Metsä Group. “If we are talking about the sustainable supply chain in terms of the forest industry, in its simplest terms we can say that a sustainable supply chain means that we know the origin of the wood, where trees have been grown and that the forests where they are coming from are managed in a sustainable way, taking into consideration both the regeneration of the forest, as well as other ecosystem services. Furthermore, we also need to both consider and respect the local ecological and environmental values.”

It is these ecological and environmental considerations that have been the reason for stricter and continually evolving EU legislation in recent years. As part of this, there is the understanding that once you begin transporting raw materials to their next destination, the circular economy process is begun, and the forest itself needs to be regenerated ecologically. Simply, when you harvest the trees, you start the next part of the regenerative process again.

Regeneration of forests part of sustainable forest management

Regeneration boosts sustainability

“That is very crucial in sustainable forest management,” continues Ripatti. “If you are harvesting, if you are renewing the forest, you must take care that the new forest will appear at the same place. In Finland, we have forest legislation, of which the crucial part is regeneration, in that you have to replant the area within certain years and forest authorities control this.”

Ripatti is making clear that from the perspective of Metsä Group, there is an obligation to speed up the regeneration process and the benefits for doing so are clear.

“If we have a rotation time in the Nordic countries of around 60 to 80 years, then the natural rotation can take around 200 years. Clearly, helping the process by implementing regeneration measures is beneficial from a sustainability perspective.”

Sustainable wood supply as cornerstone of circular economy

From traceability to certification

From regeneration, we move to the other fundamental requirement that relates to Metsä Group’s sustainable forest management, that of traceability and certification. Metsä Group has been able to boast 100% traceability of its forest raw materials for a considerable amount of years. According to Ripatti, certified wood is not yet at 100% but the aspiration to reach that goal certainly exists.

“Last year (2017), 88% of our forest raw materials came from PEFC or FSC certified forests. The ambition is to further increase the share of certified wood. We have no fixed target date to reach a certain higher percentage, but the goal is to keep our certified wood above 80%. We have reached that and now we are discussing if we should set a new target for certified wood. At the moment, this 88% benchmark is the highest it has ever been and actually this is the record in the northern hemisphere.”

“The majority of our forests are PEFC certified in Finland, but we have FSC certified forests as well. For us, it’s not a big difference in terms of the forest management criteria, as they both have similar requirements. We recognise both schemes and we rely on them and are utilising both labels. But to put all of this in perspective, only 10% of the world forests are certified and we recorded 88% in 2017, with the other 12% still fulfilling strict criteria.”

Increased efficiency of forestry through digitalisation

Forests need digitalisation too

One other major factor that has an increasing influence on Metsä Fibre’s sustainable forest management - and how it impacts the circular economy in terms of delivering the raw material, namely the harvested wood into the eco-system - is the dramatic advance in the use of digitalisation. The role of technology, though immensely complex, can ultimately be boiled down to one maxim: to make the system as efficient as possible.

“For transportation from the forest to mills,” explains Ripatti, “kilometres are money, so we try to avoid transportation as much as possible, as well as trying to optimise the wood flows from the forests to the mills by utilising return cargoes. We have a very good geographic information system (GIS), so we can transfer information of logging sites straight to the harvester computer and the forwarder computer, for example. Our database is so well updated that the driver can see from their computer how much each logging site has raw material available on the road side, and whether they are able to take the full cargo from place a or b, so this modern new technology has helped to avoid extra work.”

For Metsä Group, digitalisation has, in recent years, dramatically increased the efficiency of forestry operations, for example, via advances in logging site maps and in the more accurate pinpointing of wetland areas so they can avoided. Metsä Group is currently recognised as a world-leading company with regards to the use of this new technology, and institutions are further developing these technologies to see what kind of new possibilities they will be able to provide in the future.

Sustainable wood supply as cornerstone of circular economy

Says Ripatti, “Forestry management is now very high-tech and our clients from middle-Europe and elsewhere are surprised when I bring them in to see the harvest and the cabin and they see the GIS map program that indicates with GPS where the machines are, as well as the biodiversity hotspots in the area that should be avoided. It’s an ongoing process, as all the biodiversity hotspots have not yet been found within the land of every Finnish forest. Also, we are not quite at the stage yet where digitalisation can help us to pinpoint individual trees to be cut, but we are getting closer.”

But while digitalisation has an increasingly important role to play in terms of advancing the sustainability of the supply chain, it is not the answer to everything. A sustainable wood supply or sustainable forestry is also about how the forests are managed, how many cutting operations are executed, and about making sure that companies are not cutting more than the annual growth. In Finland, the situation is currently considered very positive, with cutting only contributing to around 60-65% of the annual growth. In the end, it is about taking care of the environmental issues, and making sure that the company is not decreasing the biodiversity values in a forest.

Sustainable foresty in circular economy ecosystem

Berries, mushrooms and social values

Creating an increasingly sustainable supply chain allows for the most efficient delivery of raw materials (or biomass) to become part of the bioeconomy, as well as to also enter the larger circular economy eco-system. It is no less than an absolute cornerstone of the Metsä Group’s forestry operations. The 100% traceability of the wood, the knowing of the origin of the wood the company procures, the world-leading figure that denotes that 88% of the wood has come from certified sources, are facts that are of obvious pride to the Metsä Group. According to Ripatti, of pride too, is the fact that in Finland, social values are also respected in forestry operations, alongside sustainability and environmental issues.

“One might ask what sustainable forest management is in terms of how sustainability is implemented when we are growing the trees. We are really taking care of our forests, we are making thinning operations, we are safeguarding the regeneration and then the environmental and social values are respected in forestry operations. If you go to the forest to pick berries or mushrooms, these are also part of social values. The forest industry is helping to bring societal wellbeing across the entire country. This is very important.”

For Metsä Group, incorporating recreational or social values into sustainability makes perfect sense. It is about enhancing the culture of sustainability for everyone.

“We Finns like to go to the forest to pick berries and mushrooms, and to go hunting. It is important for Finnish souls. This is yet another example of sustainable forest management. Nature is complicated, so we have to be also taking complicated measures to safeguard the value of nature,” concludes Ripatti.

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