{"id":72195,"date":"2026-03-19T16:51:24","date_gmt":"2026-03-19T15:51:24","guid":{"rendered":"https:\/\/www.i4ce.org\/?post_type=publication&p=72195"},"modified":"2026-03-19T16:51:24","modified_gmt":"2026-03-19T15:51:24","slug":"public-funding-wood-sector-contribution-climate-objectives","status":"publish","type":"publication","link":"https:\/\/www.i4ce.org\/en\/publication\/public-funding-wood-sector-contribution-climate-objectives\/","title":{"rendered":"Public funding for the wood sector : what contribution to climate objectives?"},"content":{"rendered":"

The new French National Low-Carbon Strategy\u00a0(SNBC 3)\u00a0sets ambitious targets for the forest and wood sector, yet these will be difficult to achieve as forest resources are increasingly affected by climate change and related disturbances.\u00a0Maintaining and strengthening the forest carbon sink\u00a0and adapting the industry to\u00a0evolving\u00a0forest resources are therefore\u00a0key strategic challenges for the sector.\u00a0However, public funding does not always align with these priorities.\u00a0<\/strong><\/p>\n

\u00a0<\/p>\n

This study reviews recent public funding directed towards the downstream\u00a0of the forest-wood sector and assesses how it contributes to climate mitigation and adaptation. Its\u00a0objective\u00a0is\u00a0to inform\u00a0better\u00a0targeting of\u00a0public support in\u00a0a context\u00a0of tightening budget constraints.\u00a0<\/strong><\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

Between 2020 and 2024, public support to the wood sector reached unprecedented levels.<\/span><\/span>\u00a0<\/span><\/span><\/h2>\n

\u00a0<\/p>\n

Since 2020, the\u00a0wood\u00a0sector has\u00a0benefited\u00a0from unprecedented public funding:\u00a0\u20ac1.7 billion in public funding related to wood uses\u00a0and\u00a0allocated\u00a0through calls for projects\u00a0was\u00a0identified\u00a0over the period 2020\u20132024.\u00a0While slightly more than \u20ac1.1 billion was\u00a0mobilised\u00a0for energy production outside the wood sector,\u00a0nearly \u20ac600 million\u00a0directly supported wood industry companies, including around \u20ac340 million for wood processing,\u00a0mainly in\u00a0construction\u00a0(Figure\u00a0A).\u00a0<\/span><\/p>\n

\u00a0<\/p>\n

By comparison,\u00a0over the period 2015\u20132018, budgetary credits specifically dedicated to wood construction amounted to \u20ac0.5 million per year according to the French Court of Auditors.\u00a0This\u00a0represents\u00a0a clear shift in public support for the sector\u2019s industrial development, although the balance between wood uses has changed only marginally.<\/span>\u00a0<\/span><\/p>\n

\u00a0<\/p>\n

\"\"<\/a><\/p>\n

\u00a0<\/p>\n

 <\/p>\n

\u20ac1.3 billion\u00a0allocated\u00a0to\u00a0energy\u00a0uses of\u00a0wood<\/b>\u00a0<\/span><\/h2>\n

Public\u00a0funding\u00a0remains\u00a0heavily\u00a0concentrated\u00a0on\u00a0energy\u00a0uses<\/b>\u00a0<\/span><\/h3>\n

 <\/p>\n

Around 80% of total funding was directed towards energy uses, far outweighing material uses. Between 2020 and 2024, \u20ac1.3 billion in public support was\u00a0allocated\u00a0to energy uses (80%), compared to approximately \u20ac340 million for material uses (20%).\u00a0<\/span>\u00a0<\/span><\/p>\n

This strong focus on wood for energy reflects trends already\u00a0identified\u00a0by I4CE\u00a0in 2014<\/span>1<\/sup><\/strong>\u00a0and\u00a0by\u00a0the French Court of Auditors for\u00a0the period\u00a02015\u20132018<\/span>2<\/sup><\/strong>, which found that energy uses accounted for around half of total public support to the\u00a0whole\u00a0forest-wood\u00a0sector.<\/span>\u00a0<\/span><\/p>\n

However, the 2020\u20132024 period marks a clear scaling-up: average annual support for industrial heat and collective heating increased threefold, from \u20ac72 million to \u20ac220 million. This expansion has also been accompanied by a diversification of supported uses, including new schemes for pellets and sustainable aviation fuels partly derived\u00a0from woody biomass, as well as increased support for energy self-sufficiency in wood industries.<\/span>\u00a0<\/span><\/p>\n

This orientation of public funding is\u00a0not aligned\u00a0with the cascading use principle\u00a0set out\u00a0in the RED III Directive, which\u00a0prioritises\u00a0material uses of biomass over energy uses.<\/span>\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

Public funding partly targets priority biomass uses, but its overall allocation\u00a0remains\u00a0difficult to assess<\/b>\u00a0<\/span><\/h3>\n

\u00a0<\/p>\n

These funding schemes cover a range of situations: some support uses with no viable alternatives to biomass or that are essential to the functioning of wood industries, while others target uses for which alternatives exist. To better assess their relevance, funding was mapped against the biomass use hierarchy defined under SNBC 3 ans PPE 3.<\/span><\/p>\n

Overall, this hierarchy\u00a0appears to be\u00a0broadly respected. Around 41% of funding can be linked to priority energy uses with no\u00a0viable\u00a0alternatives to biomass, such as high-temperature industrial heat and internal energy consumption within the forest-based sector. By contrast, only 13% of funding supports uses that should be developed more cautiously and under certain conditions, such as low-temperature industrial heat and sustainable aviation fuels (Figure B). No funding is explicitly directed towards uses considered to be limited.\u00a0However, this assessment\u00a0remains\u00a0partial.\u00a0Nearly half\u00a0of the funding (46%) cannot be clearly positioned within the hierarchy, due to insufficiently detailed information on some industrial heat and collective heating projects.\u00a0This points to the importance of sufficiently detailed expenditure tracking to better\u00a0characterise\u00a0supported uses, assess their alignment with SNBC and PPE priorities, and inform future funding decisions.<\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

\u00a0<\/p>\n

\"\"<\/a><\/p>\n

\u00a0<\/h3>\n

\u00a0<\/h3>\n

Ongoing pressure on wood resources calls into question continued support for the energy uses<\/span><\/h3>\n

Public funding for energy uses of wood, including those with limited substitution options,\u00a0adds further\u00a0pressure on already constrained resources,\u00a0particularly on wood chips, which supply\u00a0the majority of\u00a0supported projects in both industry and heat networks.\u00a0<\/span>The\u00a0wood\u00a0energy\u00a0production\u00a0target\u00a0set\u00a0under\u00a0the SNBC,\u00a0intended\u00a0to balance\u00a0resource\u00a0use\u00a0across\u00a0sectors, has\u00a0already\u00a0been\u00a0reached.<\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

In this context, any\u00a0additional\u00a0funding for energy uses further reduces the availability of wood for other uses and may create long-term lock-in effects in resource allocation.\u00a0<\/span>Where additional support is provided, it should prioritise uses with no viable alternatives to biomass and be complemented by stronger support for alternative decarbonisation pathways, such as electrification and geothermal energy, where available.<\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

\u00a0<\/p>\n

Recent adjustments to support schemes\u00a0indicate\u00a0a growing recognition of biomass constraints. These include the\u00a0EnR\u2019Choix\u00a0approach<\/span>3<\/sup><\/strong>\u00a0introduced by ADEME under the Heat Fund\u00a0scheme, and the introduction of caps on the use of wood chips in industrial heating projects under the BCIAT\u00a0scheme.\u00a0<\/span>While\u00a0these\u00a0changes are\u00a0recent,\u00a0they\u00a0could\u00a0contribute\u00a0to\u00a0shifting\u00a0the profile of\u00a0supported\u00a0projects\u00a0if\u00a0maintained\u00a0over time.<\/span>\u00a0<\/span><\/p>\n

\u00a0<\/p>\n

\u00a0<\/span><\/p>\n

\u20ac340\u00a0million\u00a0allocated\u00a0to material uses of wood\u00a0<\/b>\u00a0<\/span><\/h2>\n

Support\u00a0to\u00a0wood processing industries has strengthened industrial performance, in line with the existing production model<\/b>\u00a0<\/span><\/h3>\n

Public support\u00a0to\u00a0wood processing industries has helped address part of the sector\u2019s long-standing investment gap. It has delivered tangible improvements in industrial performance, notably by increasing production capacity and\u00a0modernising\u00a0processing facilities. Supported projects have also contributed to improved material efficiency and to the development of sorting and grading, both key levers for\u00a0optimising\u00a0the use of wood resources.<\/span>\u00a0<\/span><\/p>\n

\u00a0<\/p>\n

These investments\u00a0largely reinforce\u00a0the existing production model\u00a0centred\u00a0on softwood timber, which currently dominates the sector\u2019s main\u00a0end-markets, particularly in construction.\u00a0<\/span>Softwood\u00a0accounts\u00a0for\u00a0around\u00a090% of the\u00a0expected\u00a0additional\u00a0processing\u00a0volumes.<\/span>\u00a0<\/span><\/p>\n

\u00a0<\/p>\n

\u00a0<\/span><\/p>\n

Some\u00a0strategic\u00a0products\u00a0are\u00a0nevertheless\u00a0gaining\u00a0momentum<\/b>\u00a0<\/span><\/h3>\n

\u00a0<\/p>\n

These funding schemes have also supported the development of strategic products, particularly engineered wood\u00a0products\u00a0and wood-based insulation. They have enabled a significant scaling-up of production capacity for these higher value-added segments, which were previously underdeveloped in France, thereby contributing to reduced import dependency.\u00a0<\/span>For\u00a0example, production\u00a0capacity\u00a0for insulation\u00a0is\u00a0expected\u00a0to\u00a0increase\u00a0fivefold\u00a0once\u00a0projects\u00a0are\u00a0fully\u00a0implemented.<\/span>\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/p>\n

59% of the main support to material uses contributes t<\/b><\/span>o mitigation or adaptation<\/b>\u00a0<\/span><\/h3>\n

\u00a0<\/p>\n

Using an analytical framework to assess how investments contribute to mitigation and adaptation in wood industries, we estimate that \u20ac152 million contributes to climate objectives, through industrial\u00a0modernisation\u00a0and process\u00a0optimisation, as well as, to a lesser extent, through the development of processing capacity for hardwood and low-grade or small-diameter wood (Figure C). The remaining funding\u00a0mainly supports\u00a0the expansion of softwood processing capacity.<\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n

\u00a0<\/h3>\n

 <\/p>\n

Funding should be maintained to support the sector\u2019s adaptation to evolving resources<\/b><\/span><\/h3>\n

 <\/p>\n

Increasing the use of hardwood and lower-grade or small-diameter wood\u00a0is\u00a0a key lever for both mitigation and adaptation.\u00a0Currently mostly directed towards energy uses, these resources could contribute more to the carbon sink if they were transformed into long-lived products, which requires both adjustments in processing capacity and the gradual development of markets.\u00a0<\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

This challenge is likely to become more pressing\u00a0as forest resources are expected to evolve, with a growing share of hardwood and lower-quality wood,\u00a0potentially from salvage logging,\u00a0while the relative availability of softwood may decrease.\u00a0<\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

To date, investment in hardwood processing has\u00a0remained\u00a0limited, although recent adjustments in support schemes point in a positive direction. The IPPB call for projects provides encouraging signals, with the latest round showing an increase in the share of hardwood (around 18%). Given the specific economic and\u00a0organisational\u00a0constraints associated with these resources, sustained and targeted public support will be needed to\u00a0consolidate\u00a0this rebalancing over time.<\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

\n
\n

1\u00a0 <\/sup><\/strong>I4CE\u00a0<\/span><\/span><\/span>\u2013 CDC Climat Recherche.\u00a0<\/span>Deheza<\/span>, M., N\u2019Goran, C.,\u00a0<\/span>Bellassen<\/span>\u00a0V. (2014). L\u2019att\u00e9nuation du changement climatique par les produits bois au sein des politiques fran\u00e7aises\u202f:<\/span><\/span><\/span>\u00a0priorit\u00e9 au bois \u00e9nergie<\/span><\/span><\/span><\/span><\/span><\/p>\n

2<\/sup><\/strong>\u00a0<\/span><\/span><\/span>Cour des comptes (2020). La structuration de la fili\u00e8re for\u00eat-bois, ses performances \u00e9conomiques et environnementales<\/span><\/span><\/span>\u00a0<\/span><\/span><\/span><\/span><\/span><\/p>\n

3<\/sup><\/strong> \u00a0<\/span>This approach aims to guide the use of biomass by encouraging project developers to\u00a0<\/span>prioritise<\/span>\u00a0energy demand reduction, waste heat recovery, and alternative renewable energy sources (such as geothermal and solar thermal), with biomass considered only as a last-resort option.<\/span><\/span><\/span>\u00a0<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

This study reviews recent public funding directed towards the downstream\u00a0of the forest-wood sector and assesses how it contributes to climate mitigation and adaptation. Its\u00a0objective\u00a0is\u00a0to inform\u00a0better\u00a0targeting of\u00a0public support in\u00a0a context\u00a0of tightening budget constraints.\u00a0<\/p>\n","protected":false},"featured_media":72193,"template":"","meta":{"_acf_changed":false,"inline_featured_image":false},"type_publication":[49],"class_list":["post-72195","publication","type-publication","status-publish","has-post-thumbnail","hentry","type_publication-climate-report"],"acf":[],"yoast_head":"\nPublic funding for the wood sector : what contribution to climate objectives? - I4CE<\/title>\n<meta name=\"description\" content=\"This study reviews recent public funding directed towards the downstream\u00a0of the forest-wood sector and assesses how it contributes to climate mitigation and adaptation. 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