Metsä Spring leads funding round in Fiberwood to make insulation and packaging fossil free

This Finnish startup upcycles side streams of the mechanical wood industry to create 100% ecological and recyclable insulation and packaging materials that are free from fossil-based materials

Finnish startup Fiberwood, a producer of 100% ecological wood fibre insulation and packaging materials made from mechanical wood industry side streams, has raised a late seed funding round. The round was led by Metsä Group’s innovation company Metsä Spring, and the round included public financing from Business Finland. The funding will be used to develop and scale up the production capabilities of its pilot plant as it heads into industrial-level continuous production.

Valued at EUR 25 billion, the global insulation market is currently dominated by two groups of products: inorganic mineral wools, such as stone or glass wool, and fossil-based cellular plastic products, like polystyrene. However, these products have more environmental consequences as they are not recyclable or biodegradable.

Fiberwood’s bio-based, plastic-free, and compostable insulation sheets are made from wood pulp and side streams from the mechanical wood industry with special foam-forming technology. The insulation sheets include natural traits of trees as well as air pockets that increase the material’s insulation capabilities. The products are carbon negative as they store and bind carbon dioxide to the wood for as long as it exists. The insulation sheets are easy, safe, and quick to install. Once they are ready to be recycled, the insulation sheets will biodegrade into plastic-free soil. 

“Since last September, in our first phase of production we have been able to produce commercial-sized insulation boards for testing. Next, we will build a continuous pilot line for production-scale product and process development. As no existing machinery and processes can produce our products, we need to invent new technology to do so,” says Karita Kinnunen-Raudaskoski, Fiberwood‘s Director of Technology and Product Development.

“Our innovative foam-forming production process is more energy-efficient and uses less water than similar processes in general, so we promote the goal of sustainable development by using side streams, producing high-value products energy-efficiently, and promoting wood construction,” continues Kinnunen-Raudaskoski.

The construction industry is responsible for up to 40 per cent of the world’s carbon dioxide emissions, so innovations like the technology developed by Fiberwood are much needed to reduce the industry’s emission production and promote completely wood-based construction. According to Fiberwood, wood construction is estimated to grow from 10% to 30% in EU countries by 2050.

Approximately 75% of buildings in Northern Europe are energy inefficient and responsible for 40% of energy consumption and 36% of greenhouse gas emissions. Fiberwood helps promote energy efficiency and cleaner inside air while reducing environmental waste in the construction industry.

“We are contributing towards a more sustainable future by using side streams, producing high-value products energy efficiently, and by accelerating the potential of wood-based construction. We are grateful to our investors for believing in our product’s potential, and for the opportunity to use Metsä Group’s forest industry side streams as raw material,” says Tage Johansson, Fiberwood CEO.

Fiberwood’s packaging cushioning/protection sheets are excellent in protecting goods in transport, with protection abilities similar to styrofoam sheets and no meaningful warpage in changing conditions.

“Fiberwood has developed a one-of-a-kind technology that utilises renewable raw materials from sustainable forest sources. Metsä Group wants to support the most efficient utilisation of side streams. The world needs new innovations to support the circular economy, and it is innovations like this that we want to support,” says Erik Kolehmainen, VP, Corporate Venturing at Metsä Spring – the innovation arm of Metsä Group.

Fiberwood’s wood-based thermal insulation boards are breathable, which refers to the building material’s ability to absorb and release moisture, unlike mineral wool. The material is fire-resistant, insulates excellently, and as it’s plastic-free, it’s not a source of microplastics. 

About Fiberwood

Founded in Finland in 2019, Fiberwood is a brand new and ecological insulation material used for insulation and packaging cushioning/protection made from wood pulp and side streams of the mechanical wood industry by means of foam forming technology.

About Metsä Group 

Metsä Group is leading the way in advancing the bioeconomy. We invest in growth, bioproduct development and a fossil free future. The raw material for our products is renewable wood from sustainably managed northern forests. We focus on the growth sectors of the forest industry: wood supply and forest services, wood products, pulp, fresh fibre paperboards, as well as tissue and greaseproof papers.

Metsä Group’s annual sales amount to approximately EUR 6 billion, and we have around 9,500 employees in 30 countries. Our international Group has its roots in the Finnish forests: our parent company is Metsäliitto Cooperative which is owned by nearly 100,000 forest owners. 


Metsä Group, press release, 2023-02-07.


Metsä Group
Metsä Spring


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