Renewable carbon is gaining momentum as a cornerstone of the EU’s circular economy, but its success hinges on smart policy and sustainable forestry practices, experts told an event organised by Euractiv on 18 March.
As the EU pushes to meet its climate neutrality targets by 2050, the concept of ‘renewable carbon’ is rising fast in both policy and industry circles.
Unlike fossil carbon, which is extracted from underground and released into the atmosphere during production and consumption, renewable carbon comes from above-ground sources, biomass, recycled materials, and captured CO2. In short, it’s carbon that is already part of the ongoing carbon cycle.
“Renewable carbon is not just about replacing fossil-based materials: it’s about rethinking how we design, use, and reuse resources across industries,” said Michael Carus, managing director of the Germany-based Nova Institute during a recent event hosted by EURACTIV and Metsä Group.
This kind of thinking is gaining traction among companies looking to green their supply chains.
Wood-based products, for instance, have a unique potential to store carbon for long periods when used in construction or durable goods, making them a crucial component of a low-carbon, circular economy.
“The economy must be profitable, and we must create an economy that works with environmental limits […] From a circular economy perspective, the key is to use products longer, upgrade them, and only recycle as a last resort,” said Finnish centre-right MEP Sirpa Pietikkäinen. “This is exactly what we can do with wood.”
Christian Holzleitner, Head of Unit at the European Commission’s DG CLIMA, added: “If we do it well, we can have value chains that are effectively good for the climate because we take CO2 out of the atmosphere and keep it here with us.”
“So, if we look towards 2040 or 2050, a key performance indicator, in particular for the bioeconomy, will be how much carbon can be captured and sequestered in these value chains,” he told the event.
Making the most of every tree
A central theme in the renewable carbon discussion is the cascading use principle: getting the maximum value from biomass resources like wood before they are ultimately used for energy.
The principle dictates that biomass should first go into long-life products like buildings and furniture, then be reused or recycled, and only in the final stage be converted into energy. This approach ensures carbon remains stored for as long as possible, rather than being prematurely released through combustion.
However, the shift to renewable carbon is not without its challenges.
Forests across Europe are already under pressure, and increased harvesting could undermine their ability to sequester carbon in the long term. Critics argue that the climate benefits of harvesting may not compensate for the reduced carbon sink that Europe’s forests are already facing.
“If you are cutting a tree to even make a construction beam, for example, you are generating a carbon debt, meaning the counterfactual, not cutting the tree, would have been better in climate terms,” said Martin Pigeon, campaigner at the NGO Fern.
“In that sense, you’re not setting a climate service, even assuming substitution. That said, it’s obviously better to build with wood than with cement, with concrete,” he added.
Hybrid construction solutions
In the construction sector, one of the biggest carbon emitters globally, wood is emerging as a climate-friendly alternative to concrete and steel. Companies like Metsä, a Finnish forest group, are investing in regenerative forestry and high-value wood products that support the cascading model.
But even here, speakers warned against a one-size-fits-all approach.
“Not everything can or should be built from wood,” said Jaakko Anttila, EVP at Metsä Wood. “That’s why we need smart, hybrid construction solutions that use materials where they’re most efficient.”
Their flagship product, laminated veneer lumber, offers three times the market value of traditional timber while using wood more efficiently. Such innovations, they argue, are key to delivering high-value, low-carbon buildings.
Wood can also be used in combination with other materials for more climate-friendly buildings, too.
“We have shown worldwide in hundreds of projects that cross-laminated timber can replace cement – not totally, but about 80% of cement,” said Michael Carus.
That could significantly reduce carbon emissions from cement, which currently account for some 7-8% of global greenhouse gas emissions.
Certification and mandates
The European Commission is actively working on frameworks to measure and certify carbon removals, including carbon stored in products. These policies aim to give companies clearer market signals and reward climate-positive practices.
“We are working on carbon removal certification and monitoring systems to track how much CO2 is stored in forests and products,” said Christian Holzleitner, Head of Unit at the European Commission’s DG CLIMA.
“The key discussion is how do we optimise this value chain, how much CO2 can we take out of the atmosphere and sustainably store along that value chain,” he added.
Beyond certification, experts proposed a more assertive approach: mandating renewable carbon use in specific sectors, like quotas in energy markets. The textile industry, for instance, is increasingly reliant on fossil-based polyester. Without intervention, this trend will continue to worsen the sector’s climate impact.
“If we mandated limits on fossil carbon use in textiles, you’d see rapid growth in wood-based fibres and innovations in material recycling,” said Michael Carus. He also highlighted a broader issue: Europe’s innovation gap isn’t about ideas but about scaling them.
“We have brilliant pilot projects and technologies but lack the demand-side policies to bring them to market.”
This article follows the policy debate “Renewable carbon and the circular economy – Unlocking the role of wood-based value chains” supported by Metsä Group.
[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]