Championing sustainable construction using timber in the Baltic Sea Region

Implications & recommendations

Increasing the market share of timber construction is a matter of systemic change and requires holistic perspectives, policy coordination across levels, and close collaboration with research and business actors.

Recommendations by key bottleneck:

1. Nurturing market maturity to challenge path dependency

Changing societal and market conditions can challenge the status quo and brew market maturity for something new. The strong societal focus on sustainability is not only altering consumer choices but is the basis for major policy shift focusing on transforming production systems, not least by introducing new regulations and support schemes. While conventional industries resist change, many entrepreneurs and pioneers welcome the change, as does the forestry industry.

Sweden’s success has relied on multiple actors: including pioneering companies taking high risks and challenging existing supply chains and business models; municipalities help in creating a market via green procurement and other policy tools, sharing risks, and facilitating stakeholder collaboration; research and education institutions have generated technical and practical knowledge; and many other players have been key in bringing new knowledge and solutions from architecture and design, from finance sector, and other unrelated industries.
In the Baltics, the huge scale in mass renovations, paired with reliable funding from the EU has offered a promising alternative for local industries specialised in modular building systems. Seizing this opportunity would allow for a more resilient timber construction industry by diversifying markets and increasing local presence. Policy measures have the potential of creating ripple effects towards this direction. National authorities can help private actors create more stable local markets, by improving the conditions for tenants to welcome the process of renovations or increasing incentives such as permitting constructors to build an additional floor to existing buildings or exclusively timber buildings.

2. Social transition

The push towards sustainability comes largely from society itself, which has demanded change. Positive associations of wood to a sustainable, ‘homy’ or beautiful material also contribute positively to the cultural change. Architecture and design play an important role here.

A good practice identified in renovation programmes in the Baltics, is the engagement of social workers to help tenants understand the benefits of renovations beyond the long-term or abstract carbon emissions goals, instead focusing on energy savings or comfortability.

3. Adapting regulatory frameworks to overcome barriers

Removing barriers for timber construction is essential, not to mention specific bans on height, or materials. Yet, there are other barriers to be found in municipal planning systems and zoning regulations. Besides regulation itself, municipalities can favour timber in several indirect ways, including setting sustainability requirements in ‘land allocation agreements’, setting examples for favourable design, or by making strategic procurement decisions, such as requiring low carbon emissions. Municipalities also have the power to change zoning requirements and specifications and create new master plans to timber and concrete buildings in equal footing regardless of height specifications or allow for raising the height of existing buildings (with ‘add-ons’) if using a low weight structure, or if they own the land, they can control the requirements for new buildings.

4. Filling the knowledge gap

Education and training need to be tackled from basic and higher education to vocational and professional training programmes. In addition to full degrees, education institutions need to set up short and flexible supplementary degrees (micro-degrees) targeting workers which are already active in the labour market, updating their skills and acquiring new knowledge throughout their professional life. Universities in different countries should join forces (e.g. via ERASMUS+ programmes) to build attractive programmes, gather a critical mass of students needed to start a course, and also to generate exchange between students of different disciplines.

Furthermore, filling the knowledge gap is only partly about education and largely about knowledge sharing. A low-hanging fruit is to generate awareness about the already existing technologies, projects, or buildings across different countries. One possible solution would be to translate material that is vastly available in Swedish or German into Baltic languages. Another way is to facilitate study visits to good practice regions.

Knowledge exchange should also be done strategically via triple helix collaboration by establishing task forces with key players to pool expert knowledge to define the areas for R&D projects and solve technical or policy challenges. Actors involved should not only include authority and technical experts on construction systems but also other nodes in the system such as real estate companies, spatial planners, and financiers. Wood City Sweden, for instance, is a good example of a collaborative initiative that has helped generate and knowledge to support municipalities on how to overcome bottlenecks. In the Baltics, existing organisations can follow its lead by having actors such as Estonian Woodhouse Association or Latvian Wood Construction Cluster bring forth material and knowledge for municipalities to better understand how to use the tools they already have at their disposal to steer development and overcome barriers.

5. Cutting costs

Costs generally go down once industrial capacity increases, improving efficiency, streamlining processes, and consolidating supply lines. Incentives are needed to reach this point, such as public authorities procuring timber buildings to incentivise market creation. Banks are also now required to provide ‘green financing’ which is bringing more finance into the sector. Finally, insurance premiums are based as risk levels, which is determined by evidence. An increasing built stock will provide the data to allow risks to be more accurately assessed.