Wood is certainly one of the oldest building materials and has been a key resource in the Nordic countries over time. As Andersson (2020 p57) puts it: “employing renewable, locally sourced, and strong yet light material, wooden houses have dominated the single-family housing market in Sweden for centuries”. In Sweden, the oldest surviving wooden buildings date from the 13th century (Swedish Wood, access: 02/10/2022). Given this context, it may seem odd to speak today of innovation, and ‘green innovation’ particularly, in the construction sector by means of wood. However, as a consequence of devastating fires in cities throughout Europe in the 1700’-1800’s, wood buildings became considered a hazard leading to a ban on multi-storey wood buildings. Finland (under the Russian Empire) banned wooden buildings of more than two storeys in 1856 (Suikkari 2007) and Sweden in 1874 (Swedish Wood, access: 02/10/2022). After more than a century of prohibition, multi-storey wood buildings are experiencing a renaissance. The negative association to fire-hazards gives way to a positive outlook of wood as the means for ‘greening’ the construction sector.

The construction and life cycle of buildings are associated with 39% of global carbon emissions, of which about a third comes from the production of building materials (Rasmussen et al. 2021). In addition, the industry uses significant amounts of energy, mineral and metal resources during the construction and use phases of buildings (ibid.). Reducing the carbon footprint of the sector has, therefore, gained considerable attention from policymakers. Novel regulations are being introduced to trigger and accelerate the transition of the industry towards low-impact practices and solutions. From January 2022, new regulations in Sweden and Finland require ‘climate declarations’ from all new buildings, which is a stepping stone towards setting limit values on carbon emissions for new construction projects. These challenges represent an opportunity for the forest industry, as building in wood significantly cuts the carbon footprint of construction. Assuming that wood is harvested from sustainably managed forests (an increasingly contested issue), wood construction appears as the most sustainable option in Nordic countries. Processing and producing wooden building materials use less energy-intensive industrial processes than extraction and production processes of cement and steel. Additionally, wood stores carbon for the lifetime of the building, and possibly beyond, since wood elements are easily reusable and recyclable. After two decades of slowly creating a market for multi-storey wood construction (MSWC) in the Nordic countries, it is now expected to rapidly expand and capture a sizeable market share over the coming years. 

In 1994-95, Sweden introduced the new Building Codes (BBR), which effectively annulled any restrictions on wood construction (Smart City Sweden 2020). This reform to the legislation, however, was not particularly motivated by the opportunities offered by wood materials in construction. Instead, it was part of a process of harmonisation of legislation required for accession to the EU (Andersson, 2020, p61). The sudden shift of the ‘rules of the game’ generated high expectations within the forest and wood industries (Interviewee 1). The development, however, was slower than expected. After a century of building with cement and steel, a wide knowledge and skills gap surrounding the construction of tall wood buildings, as well as the need for a more profound cultural and systemic change. However, the experience gained over the last 25 years by the wood industry and building companies, as well as engineers, architects, planners, regulators, academia, banks, and insurance companies, has allowed this ‘sub-sector’ to find a place in the market, gradually increasing its market share to ca. 20% today, and set a solid ground for rapid expansion over the years to come (Interviewees 1, 2, 8). National and sub-national authorities have also played a substantial role in promoting wood building by setting bold ambitions, mobilising stakeholders and funding, and most importantly by taking risks and leading by example in the construction of public buildings and apartment blocks. Moreover, timing has favoured wood construction, first by several decades of a sustained urbanisation process and by the increased social focus on environmental sustainability since the early 2000s (Interviewees 1, 2, 3). In line with this trend, wood strategies have an increasing focus on climate goals, capitalising on the momentum.

In Finland, key promoters of wood construction also began to mobilise after the country’s accession to the EU in 1995. However, restrictions on the height of MSWC and fire safety were lifted gradually. The government cycles have initiated a number of policy and research programmes from 1986 onwards to support knowledge building on material science and structural engineering. The national strategies also set ambitious goals for increasing wood construction, and a number of municipalities took the lead by building schools and other public facilities, generating demand as well as built experience to incentivise private investments. While government programmes generated substantial knowledge and expectations from the forest and wood industries, market creation has faced substantial resistance. Negative perceptions, regulatory barriers, and the dominance of the concrete industry have limited MSWC to a marginal position until recently. Compared to Sweden, construction processes have remained underdeveloped, more inefficient, and thus expensive. Timing has also been less favourable in Finland compared to Sweden, as urbanisation and demographic trends have been stagnating in the last few decades. These factors have considerably hampered the efforts of wood construction actors to gain a foothold in the market despite political support, which has remained constant for over three decades. Under these difficult conditions, the role of a few ‘champions’ has been key, such as the various tools and methods that bigger cities have wielded to motivate and even force constructors to choose wood. Today, the market share of MSWC remains at around 5% but is expected to accelerate (Paavola 2019).

Regulation and policy push or technological innovation were not the sole agents behind the rise of modern high-standard buildings in wood. Making way for wood construction in the market has required the creation of a new ‘sub-industry’ and business ecosystem. These efforts have led to an overhaul of the whole system, from changing business practices, spatial planning systems, and industrial processes to changing the organisation of the construction sector, their supply chains, business models, and financial schemes, as well as promoting an overall cultural change. Collaboration across multiple public, academic, and private actors from different sectors has been pivotal in shifting cultural values, setting common goals and new policy incentives, and building trust. Trust has been the basic condition enabling the industry to make large and risky investments.

Figure 1: Timeline Multi-storey wood construction (MSWC) – key industry and policy developments. Source: authors.