Long-Lasting Applications with High Value Added Represent Only One Perspective on Sustainable Wood Use

Blog - Published 13.8.2026

Guiding the use of wood towards long-lasting applications with high value added— that is, the cascading use principle — is one of the key principles of sustainable wood use. According to this principle, wood should be used for energy only when it cannot be used as wood products, reused or recycled.

The discussion concerning the cascading principle has been intense in both the EU and Finland in recent years. Its implementation has raised concerns especially regarding the energy use of wood from the perspectives of carbon sink targets, logging volumes and resource efficiency.

The roots of the cascading use principle go back to the 1990s, when concerns arose about the resource efficiency and environmental impacts of industry. In EU legislation, the cascading use principle was preceded by, and is closely linked to, the waste hierarchy presented in the 2008 Waste Framework Directive.

In forest use, the concept became established in the early 2010s, when it was highlighted in the EU Forest Strategy of 2013. The legal status of the concept strengthened in the 2020s when it was included in the update of the EU Renewable Energy Directive (RED III). RED III states that the cascading use principle for woody biomass, meaning the order of priorities for wood use, ensures that “woody biomass is used according to its highest economic and environmental added value”.

Steering Wood Use Is on the Current Policy Agenda

In EU policy, the cascading use principle has mainly been regarded as a strategic objective rather than binding regulation. According to RED III, however, national subsidies must not be directed to wood use that contradicts the cascading use principle. On the other hand, the directive also includes flexibilities for deviating from the cascading use principle. These flexibilities relate to market conditions, especially to the ability of local forest industries to process different timber assortments, and security of supply.

During the preparation of the RED III directive, stricter restrictions than those eventually adopted were also discussed. In its position, the European Parliament proposed that compliance with the cascading use principle should have been part of sustainability criteria for forest biomass.

In addition, the European Parliament wanted to add the concept of primary woody biomass to the directive. Primary woody biomass—such as stemwood, branches and stumps—would not have been eligible for renewable energy subsidies. In addition, its use would have been capped at the average level of 2017–2022, meaning that additional use would not have counted towards renewable energy targets. However, these stricter measures proposed by Parliament were not included in the update of the Renewable Energy Directive that entered into force.

Since then, pressure to tighten the legislation has increased again. Provisions concerning the cascading use principle have been discussed in connection with the revision of the bioenergy related activities’ technical screening criteria of the EU Taxonomy. In addition, the EU energy and climate policy guidelines for the period after 2030, which are currently under preparation, are likely to lead to the next update of the Renewable Energy Directive, RED IV.

This update may include new restrictions on the sustainable use of woody biomass. As already happened in connection with RED III, questions concerning the energy use of primary woody biomass and restrictions on its use are likely to come up again. In addition, the inclusion of the cascading use principle in companies’ obligations through biomass sustainability criteria might also be revisited.

Challenges in Allocating Wood Use

It is difficult to assess the implementation of the cascading use principle unambiguously. A particularly difficult concept is roundwood suitable for processing by the forest industry. The measurement and quality requirements set by the forest industry for roundwood are partly determined by the market situation for both roundwood and end products, as well as by the available processing capacity. Changes of only a few centimetres in measurement requirements can move wood from one side of the processing suitability threshold to the other. Such changes may affect the harvest yield of industrial roundwood by as much as tens of percent, especially in young thinning stands.

The same problem also applies to by-products. In theory, a larger share of by-products, such as wood chips and sawdust, could be used as raw material for industrial products such as particleboard instead of energy production. In practice, industrial production is guided by market demand, which limits the volume of these products that can be manufactured.

Energy demand is also a central part of the overall picture. From this perspective, it may be justified to use some processable by-products as renewable energy if this replaces fossil fuels. The positive climate impacts of wood-based energy in reducing fossil emissions can therefore be significant. As a source of renewable energy and as a safeguard for security of supply, wood energy also has major national economic significance in countries such as Finland, which have substantial forest resources.

The Challenge of Identifying Overall Benefits

A challenge of the cascading use principle is balancing the pursuit of the highest possible value added and long-lasting applications with overall benefits of wood use. These objectives are partly contradictory, and measuring and valuing environmental benefits is not straightforward. In addition, the use of wood must be examined within the constraints set by economic limitations.

Regulation that is too detailed and strict, and that ignores differences in regional conditions, may lead to situations in which wood use is not directed in a way that is optimal from the perspective of overall sustainability. In that case, it unnecessarily weakens the competitiveness of both the forest and energy sectors and causes unexpected impacts in regional economies and in the national economy as a whole.

Writers: Research Scientist Tuomas Niinistö (tuomas.niinisto(at)luke.fi) & Senior Scientist Antti Mutanen (antti.mutanen(at)luke.fi), Natural Resources Institute Finland.