Will Wood’s Low-Carbon Status Eventually Lead to a Surge in Demand?

To reach net-zero, the world will need to use more wood. But this transition won’t happen overnight.

Wood is good.

Lifecycle analysis (LCA) research shows that the embodied carbon of wood-based construction materials is 72% lower than that of steel and 66% lower than that of cement. Unlike steel or cement—both of which release large amounts of carbon dioxide during the manufacturing process—wood actually sequesters carbon as it grows. Wood is also a renewable resource.

But will wood’s low-carbon status translate into increased global demand? And if it does, how quickly will the transformation happen?

The answer to the first question is “yes.” But demand growth will be very slow at first, and there are a lot of factors that could prevent wood from really taking off. 

Reducing Carbon in the Built Environment

According to recent statistics from the UN Environment Programme (UNEP), the built environment accounts for at least 37% of global carbon emissions. Buildings emit carbon not only through lighting, heating, and cooling (operational emissions) but also through the energy used in the manufacture of building materials and in building construction (embodied emissions).

National governments, many of whom have committed to reach net zero emissions by 2050 (as per the Paris Agreement), are therefore moving forward with policies to reduce carbon emissions in the built environment. However, as operational emissions currently account for the lion’s share (75%) of building emissions, they have taken priority in most government policies. For example, the European Union’s (EU’s) Energy Performance of Buildings Directive, which required buildings to be “near-net-zero” by 2020 and will require net-zero by 2030, only considers operational emissions.

“Whole-Of-Life” Carbon Calculations Are Still New

Consideration for “whole-of-life” carbon emissions (which includes both embodied and operational emissions over the lifespan of the building) is a relatively recent development. Calculating the carbon footprint of a building over its entire lifespan, from construction to demolition, used to be a very complicated process. However, sophisticated lifecycle analysis (LCA) software now makes it much more feasible.

Voluntary green building certification programs, such as LEED in North America and BREEAM in the UK, now incorporate LCA into their ratings. Several European countries now also require lifecycle assessments for buildings, as do some regional and city governments (including California and Vancouver). Federal procurement policies (such as those in the UK and Canada) also require LCAs.

A handful of European countries have gone one step further, requiring LCA by law and setting limits on whole-of-life carbon emissions. The Netherlands, for example, has had an emissions cap in place since 2018. For all buildings with floor area greater than 100 m² (1076 ft²), builders must submit an Environmental Performance of Buildings calculation prior to obtaining an environmental permit for construction. France, Denmark, Finland, and Sweden have introduced (or are introducing) similar programs, starting in 2022, 2023, 2026 and 2027 respectively. Each country has chosen to define maximum carbon emissions differently, such as in kg of CO₂ /m² of floor area over the building lifecycle, kg of CO₂ /m² per year, or in the environmental “shadow price” of building materials (i.e., the estimated cost to society). California and New Zealand are also introducing emissions caps.

Will emissions caps create additional demand for wood? Possibly, but the change won’t be immediate. Besides building with wood, there are a lot of other ways to reduce carbon emissions throughout the life of a building. However, as the caps tighten over time, more builders may consider replacing their traditional building materials with wood. Also, more jurisdictions may implement whole-of-life LCA requirements for building construction.

Other Reasons to Build With Wood (Or Not)

Being environmentally-friendly is important, but it’s not the only factor that consumers, specifiers (i.e. architects, engineers, and designers) and builders consider. Cost, culture, and practicality are also important.

By far, the main factor influencing the choice of building materials is cost. In North America, Japan, and parts of northern Europe, wood is the most common building material in single-family homes, primarily because it is readily accessible and cheap. These regions are also amenable to wood because they have cool or moderate climates and few termites.

The invention of new mass timber products such as cross-laminated timber (CLT) has created an opportunity to use wood in larger buildings such as offices towers and apartment blocks. However, mass timber is still a “niche” product, making up only about 1% of the market for building materials in North America and slightly higher in Europe.

Besides its environmental qualities, mass timber has a lot going for it: it can be assembled onsite quickly, quietly, and with less waste than traditional building methods. However, at least in North America, building with mass timber still costs 5-6% more than using steel and concrete. Mass timber buildings can also be more costly to insure. Therefore, mass timber is still more niche than mainstream.

Dreaming of a Wooden Era

Over time, as developers, builders, municipal planning departments, and insurers become more familiar with mass timber, its cost will come down. Government incentive programs, such as BC’s Mass Timber Demonstration Program and Ontario’s Tall Wood Demonstration projects, have provided “top-up” payments to cover the extra cost of building with mass timber. These projects will give builders the opportunity to develop skill and confidence with the material, and consumers the opportunity to see it in use. Eventually, more builders and consumers will choose it, and more forest products companies will make it.

However, the key word here is “eventually.” Mass timber is still in its infancy, as are many of the emissions-reduction policies that will drive its demand. Therefore, we in the wood industry can’t take mass timber’s ascendance for granted. Growth in wood construction it will be due not only to environmental considerations, but also due to competitiveness factors like cost and desirability. To achieve this, we have our work cut out for us.