JÄRVENPÄÄ, Finland — Finnish deep tech startup Fiberwood Ltd has secured $3 million in funding from the EU LIFE Program 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.

“We believe forests deserve smarter use,” says CEO Tage Johansson. “We’re turning side streams into something more valuable."

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By refining underutilized materials such as mechanical wood residues and recycled wood into high-performance components, Fiberwood adds value to the forest industry and promotes circular use of timber. Its plastic-free, recyclable fiber boards can replace fossil-based insulation in construction and support the EU’s transition to low-emission building practices.

The construction sector accounts for 42% of global greenhouse gas emissions. In the EU, most insulation materials are still fossil-based, and over 98% end up in landfills or the environment. While demand for greener alternatives is rising, many bio-based options fall short of technical requirements.

Fiberwood aims to bridge that gap. Founded in 2019, the company has developed a patented technology to produce recyclable and compostable boards with thermal performance, structural durability, fire safety, moisture resistance, and material longevity. This rare combination opens new possibilities for sustainable design.

“We believe forests deserve smarter use,” says Johansson. “We’re turning side streams into high-performance materials that meet real construction needs while reducing environmental impact.”

Fiberwood is building a demo production line in Järvenpää, southern Finland, to enable deliveries for customers’ pilot projects. The $3 million EU LIFE grant supports production optimization, new side-stream validation, and final performance testing, resulting in a blueprint for Fiberwood’s first industrial-scale factory.

The company’s B2B customers include leading building materials companies in Nordic and European markets. They will integrate the fiber components into their existing products and sell them under their own brands.

“This is a turning point,” Johansson says. “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.”

Before securing LIFE funding, Fiberwood had raised $10 million from investors such as Metsä Spring, Stephen Industries, and public innovation funds. The company is preparing for international growth and seeking partners across the European construction value chain.