Hello,
Finland just put €90 million on the table for carbon capture. The rules are simple. Capture the most CO₂ for the least money. You win.
The government decree was signed December 11. It launches competitive bidding for bio-based carbon capture projects. Minimum threshold: 15,000 tonnes CO₂ per year. Maximum grant: €30 million per project. Bidding opens this month.
Why does this matter? Finland has 30 million tonnes of bio-based CO₂ emissions yearly. Most come from pulp mills and bioenergy plants. That's a massive resource for negative emissions.
Meanwhile, UPM and Versowood finalized their partnership. Ukraine extended its timber export ban. A major Swedish sawmill announced closure. And the EU withdrew its forest monitoring law.
Here's what's moving European forestry this week:
🔍 The Big Story
Finland Launches €90 Million Carbon Capture Program
Finland's government signed a decree on December 11. It creates a €90 million bidding process for bio-based carbon capture. The program runs 2026 to 2032. Applications open this month.
How it works: Projects compete on cost. Winners offer the lowest grant per tonne of CO₂ captured. It's a reverse auction. Cheapest carbon capture wins.
The requirements:
Minimum 15,000 tonnes CO₂ capture per year
Maximum €30 million grant per project
Grant covers up to 30% of eligible costs
Capture must start by end of 2030
Operations must continue until at least end of 2035
Why Finland: The country has huge bio-based carbon resources. Finnish industry emitted about 30 million tonnes of bio-based CO₂ in 2023. Most comes from pulp mills, sawmills, and bioenergy plants. Finland's total emissions (excluding land use) were 41 million tonnes. Bio-based CO₂ is the majority.
The EU context: The Commission wants the EU to capture 280 million tonnes of CO₂ by 2040. About 40% should come from bio-based sources or direct air capture. Finland is positioning early.
Environment Minister Sari Multala said: "Finland has a huge competitive advantage. We have clean electricity and bio-based carbon dioxide available."
Two technology paths: The program covers BECCS and BECCU. BECCS means permanent underground storage. BECCU means using CO₂ in products like synthetic fuels.
Who will compete: Finnish pulp and paper companies are obvious candidates. UPM, Stora Enso, and Metsä all run large facilities. Their operations produce concentrated CO₂ emissions. Bioenergy plants can also apply.
What this means for forest owners: Carbon capture adds value to forest industry. If mills generate revenue from capturing CO₂, their business case strengthens. Stronger mills mean more pulpwood demand.
The timeline: Bidding opens January 2026. Winners must be operational by end of 2030. This isn't a distant concept. It's happening now. Sources: Finnish Government Announcement | Carbon Pulse | QC Intelligence
📊 Quick Hits
1. 🇫🇮 UPM-Versowood Partnership Finalized
The UPM-Versowood deal received all approvals. It took effect December 31, 2025. UPM's Korkeakoski sawmill now belongs to Versowood.
The deal: Korkeakoski produces nearly 350,000 cubic meters of pine timber yearly. UPM received a minority stake in Versowood in exchange.
The supply arrangement: UPM gets pulpwood and sawmill by-products for its pulp mills. Versowood gets logs through UPM's wood procurement.
Why it matters: Finland's wood market is tight. This deal secures supply for both. Versowood now produces nearly 2 million cubic meters yearly. That makes them a Finnish sawmilling leader. Source: UPM Official Release | Lesprom Network
2. 🇺🇦 Ukraine Extends Timber Export Ban Through 2026
Ukraine extended its timber export restrictions on December 31. The ban continues through 2026.
What's banned: Unprocessed timber and fuelwood need licenses with zero quotas. That means a complete export ban. Scrap metal is also restricted.
The reason: Prime Minister Yulia Sviridenko cited strategic needs. Domestic woodworking companies need timber. Rural communities need firewood for heating.
War impact: Logging volumes fell sharply during the conflict. Supply is already tight. Exporting raw timber would worsen shortages.
For European buyers: Ukraine used to supply EU markets. That timber now stays home. Importers must find other sources. Sources: Ukrainian Government | Interfax-Ukraine | Wood Central
3. 🇸🇪 Bergkvist Siljan Closes Mora Sawmill in March 2026
Swedish sawmill operator Bergkvist Siljan will close its Mora facility. The shutdown happens by end of March 2026. Annual capacity: 115,000 cubic meters.
The owner: Austrian Mayr-Melnhof Holz bought Bergkvist Siljan in 2021-2022. The deal grew group capacity to over 2.7 million cubic meters.
Why closure: CEO Niklas Båtelsson blamed "difficult market conditions." Timber costs "more than doubled over five years." The company says Insjön and Blyberg mills can absorb Mora's production.
The signal: A company closes a sawmill three years after buying it. That tells you market conditions are broken. High log prices meet weak lumber demand. Source: Lesprom Network | Timber-Online
4. 🌲 EU Forest Monitoring Law Withdrawn
The European Parliament voted 370-264 on October 21 to reject the Forest Monitoring Regulation. The Commission then listed it for withdrawal in its 2026 Work Programme.
What the law proposed: Brussels wanted comprehensive EU-wide forest monitoring. Better data. Standardized reporting. Easier information access.
Why it failed: Critics saw excessive paperwork. National forest inventories already exist. Member states wanted to keep control.
Industry reaction: Copa-Cogeca called the rejection "a decisive turn against a top-down, bureaucratic approach."
Environmental concern: Green MEP Sara Matthieu noted: "More than a million hectares burned in the EU. Better mapping is urgently needed."
For forest owners: This is a regulatory win. No new monitoring requirements from Brussels. Your current reporting stays unchanged. Sources: EU Forest Monitoring Law Status | Agriland
5. 🇮🇹 Italy Launches National Carbon Credit Registry
Italy created a National Registry of Voluntary Carbon Credits. The goal: protect 10 million hectares of forests and ensure transparency.
Who signed: Agriculture Minister Francesco Lollobrigida and Environment Minister Gilberto Pichetto Fratin.
Who runs it: CREA (Council for Agricultural Research) will oversee operations.
Project requirements:
Show measurable forest management improvements
Go beyond existing regulations
Maintain impact for at least 20 years
Anti-greenwashing: Minister Lollobrigida said this is "a step forward in combating greenwashing. With facts, not slogans."
Timeline: CREA aims to make the registry operational by 2026. It will connect with Italy's National Forestry Information System.
Why it matters: Italy is building national carbon market infrastructure. Forest owners gain a clearer path to carbon credits. Source: Green.Earth
📅 The Weeks Ahead
January 2026: Finnish BECCS competitive bidding opens
January 24, 2026: PEFC field mission to Indonesia
Q1 2026: EU Carbon Removals Certification Framework applications open
April 30, 2026: EUDR simplification review deadline
December 30, 2026: EUDR deadline for large/medium operators
💡 One Thing to Try This Week
Check if your country has carbon capture funding. Finland committed €90 million. Other forest-rich nations may follow.
Fifteen minutes:
Search "[your country] carbon capture incentives 2026"
Check your climate ministry website for grant programs
Look for pulp industry announcements about capture projects
Note any application deadlines
Finland targets 15,000+ tonnes CO₂ capacity per project. That's industrial scale. But the signal matters for everyone. Governments are funding carbon capture from forest industry.
Companies that win funding become stronger timber buyers. Knowing where investment flows helps predict wood demand.
Until Thursday!
Wish you all the best: Peter
P.S. What’s the biggest challenge you’re facing in forestry right now?
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