Finnish deep tech startup Fiberwood has secured €3.1 million in funding from the EU LIFE Programme to support its mission 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.
Fiberwood transforms underutilised by-products such as mechanical wood residues and recycled wood into high-performance materials, adding significant value to the forest industry. Every year, millions of tonnes of wood processing residues are generated across Europe, often underused, burned for energy, or landfilled. Fiberwood turns these industrial side streams into recyclable, plastic-free fibre components that can replace fossil-based insulation in construction and packaging.
This overlooked raw material becomes the basis for advanced, climate-smart products that support environmental goals, enhance the circular use of wood, and improve industrial competitiveness.
Responding to a pressing global challenge
In parallel, Fiberwood is tackling one of the biggest challenges in the built environment. The construction industry alone accounts for 42% of global greenhouse gas emissions, and most insulation materials in the EU are still made from fossil-based plastics, with over 98% ending up in landfills or the environment. Despite the growing demand for greener materials, many bio-based alternatives have struggled to meet the building industry’s stringent standards. Fiberwood aims to change that.
Founded in 2019, Fiberwood has developed a patented technology that delivers recyclable, plastic-free, and compostable boards with thermal insulation, structural strength, fire safety, moisture resistance and material longevity— a unique combination that opens new design possibilities for architects and builders.
“We believe forests deserve smarter use. We’re turning side streams into high-performance materials that meet real construction needs while reducing environmental impact,” says CEO Tage Johansson.
“Now we’re ready to move fast. We’ve built a unique way of working that combines deep industry experience with startup agility — and there’s strong demand for what we offer.”
Backed by the EU to accelerate market readiness
The €3.1M EU LIFE grant will support Fiberwood’s LIFEMODWISE project, which focuses on optimising the production process, validating new side-stream sources across Europe, and finalising technical performance. The outcome: a complete blueprint for an industrial-scale factory.
Fiberwood is currently building a demo production line, enabling deliveries for customer pilot projects, including test buildings. Its B2B customers already include leading building materials companies in Scandinavian and European markets, who integrate the fibre-based components into their existing products and sell them under their own brands.
“This is a turning point,” Johansson emphasises. “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.”
Fiberwood’s solution supports key EU sustainability policies, including the Energy Performance of Buildings Directive and the European Green Deal.
Before the LIFE funding, Fiberwood had already raised €10.7 million in investments from Metsä Spring, Stephen Industries, and public funding sources. The company is preparing for international growth and actively seeking new partners, customers and collaborators across the European construction value chain.
