The use of timber in construction

Decarbonisation is a global megatrend which is influencing the materials used in construction. Rather than concrete or steel, timber is increasingly being used in buildings, reducing the carbon footprint, cost and construction time of new developments.

Using timber for construction is also a very effective way of locking up carbon, absorbing more from the atmosphere during its growth than the energy expended in growing, harvesting and processing. This is central to tackling climate change.

The use of timber in mass construction

Pablo van der Lugt’s recent publication Tomorrow’s Timber is a brilliant atlas of the many new large-scale construction projects from around the world that are choosing wood over steel and concrete.

Until recently it was rare to see timber buildings over a few storeys tall. Now, mass timber buildings above 30 metres are more common. One example is the Brock Commons Tallwood House building at the University of British Columbia, an 18-storey residence block with a floor structure consisting of 5-ply cross laminated timber (CLT) panels supported on glue-laminated timber (glulam) columns.

Government support 

A new Irish Interdepartmental & Industry Steering Group on Timber in Construction is bringing together industry and government departments to assess the needs of the sector and to increase the use of timber in construction. The group examines potential obstacles, including regulatory and standardisation challenges, to increase the use of timber and champion home-grown options.

At a European level, there is also clear support for using more nature-based materials with the President of the Commission, Ursula von der Leyen, pushing her own initiative called the New European Bauhaus (NEB). She is seeking to promote a healthier, greener and more attractive environment, central to which is the use of more nature-based construction materials such as timber.

A path away from fossil fuels 

The use of bio-based materials and chemicals are increasingly being developed and used to displace their fossil fuel derived equivalents.

The addiction to fossil fuels is not just about energy. Oil is also the source of many chemicals and compounds that are used in our everyday lives without us associating them with fossil fuel extraction.

The only possible path to a net zero existence involves dramatically reducing our reliance on fossils fuels and all of the products derived from them. The transition is well underway for replacing oil and gas with solar and wind. However, the emergence of biorefineries to generate the materials we need to facilitate our move away from oil has only just begun.

A recent announcement by UPM and Nokian Tyres marked the first large scale commercial use of lignin-based compounds to replace traditional carbon black that comes from the incomplete combustion of heavy petroleum products. UPM is building an industrial scale biorefinery at Leuna, Germany to convert solid wood into next generation biochemicals.

Forestry as an asset class 

Forestry returns are driven by three main factors:

	1. Biological growth Forests are fibre factories that use mostly zero cost inputs to create wood by converting sunlight into biomass with the aid of suitable climatic conditions, water and nutrients. They do this irrespective of whether the Purchasing Managers Index is positive or negative, whether the stock market is up or down or whether geopolitical tensions are high or low.
	2. Product assortment appreciation As commercial forest crops grow and tree girth increases, the wood they create is stored in ever increasing log sizes.  As a rule of thumb, the larger the log size that can be cut from a tree, the more valuable the end products that can be cut from that log. Therefore, year on year forests not only increase wood volumes, but the wood they create is ever more valuable.
	3. Timber price inflation Our Global Timber Outlook report predicts that global timber consumption will increase by 3.1% per annum over the next 25-30 years. This increased demand is fuelled by the mega trends of increases in population & urbanisation, the decarbonisation agenda and chronic housing shortages.

Timber in motion 

The future for timber usage across the globe is bright and nowhere more so than in Europe. As a result, timber demand is set to continue as the key driver for returns from forestry investment, instead of other revenue streams such as payments for environmental services like carbon credits.

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