Finnish Fiberwood Secures €3.1M EU Grant to Scale Carbon-Storing Building Materials

Finnish deep tech startup Fiberwood Ltd has secured €3.1 million in funding from the EU LIFE Programme to reduce buildings' carbon footprints. The company will use the grant to scale up its sustainable insulation solutions made from wood industry side streams and accelerate its entry into broader European markets.

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By refining underutilised materials such as mechanical wood residues and recycled wood into high-performance components, Fiberwood adds value to the forest industry and promotes circular use of timber. Its plastic-free, recyclable fibre boards can replace fossil-based insulation in construction and support the EU’s transition to low-emission building practices.

Tackling a Global Challenge in Construction

The construction sector accounts for 42% of global greenhouse gas emissions. In the EU, most insulation materials are still fossil-based, and over 98% end up in landfills or the environment. While demand for greener alternatives is rising, many bio-based options fall short of technical requirements.

Fiberwood aims to bridge that gap. Founded in 2019, the company has developed a patented technology to produce recyclable and compostable boards with thermal performance, structural durability, fire safety, moisture resistance, and material longevity. This rare combination opens new possibilities for sustainable design.

“We believe forests deserve smarter use,” says CEO Tage Johansson. “We’re turning side streams into high-performance materials that meet real construction needs while reducing environmental impact.”

Backed by the EU to Accelerate Market Readiness

Fiberwood is building a demo production line in Järvenpää, southern Finland, to enable deliveries for customers’ pilot projects. The €3.1M EU LIFE grant supports production optimisation, new side-stream validation, and final performance testing, resulting in a blueprint for Fiberwood’s first industrial-scale factory.

The company’s B2B customers include leading building materials companies in Nordic and European markets. They will integrate the fibre components into their existing products and sell them under their own brands.

“This is a turning point,” Johansson says. “Our material allows customers to make a sustainable leap without changing how they design or sell their products, giving them a competitive edge with minimal disruption.”

Before securing LIFE funding, Fiberwood had raised €10.7 million from investors such as Metsä Spring, Stephen Industries, and public innovation funds. The company is preparing for international growth and seeking partners across the European construction value chain.

About Fiberwood

Fiberwood is a Finnish deep tech company refining wood industry side streams into sustainable, high-performance building and packaging materials. Its customised fibre components reduce buildings' carbon footprints and support the shift to fossil-free construction. Founded in 2019, Fiberwood serves B2B customers across the Nordic and European building materials sector and is ramping up its first demo production line for pilot projects.

Funded by the European Union. Views and opinions expressed are, however, those of the author(s) only and do not necessarily reflect those of the European Union or CINEA. Neither the European Union nor the granting authority can be held responsible for them.

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