Skip to main content

The Ísland.is App

Land and Forest Iceland Frontpage
Land and Forest Iceland Frontpage

Land and Forest Iceland

Analysis of potential value creation opportunities within Icelandic forestry

5th March 2025

Icelandic timber offers significant potential for diverse product development. Global timber demand is increasing, and Icelandic forests will yield substantially more timber in the coming years. This is a key finding from a report commissioned by the South Iceland Forest Owners' Association, summarising initial assessments of Icelandic forest resource utilisation.

Main timber regions in Iceland

The "Out of the Wood" project's recently published report summarises findings from a multidisciplinary expert consultation group encompassing forestry, design, industry, and academia. The group assessed various forest product utilisation concepts. While initiated by the South Iceland Forest Owners' Association, EFLA engineering firm facilitated idea collection and preliminary selection in collaboration with the group. Evaluations considered both the feasibility and market viability of each concept.

By 2030, projections indicate an annual availability exceeding 50,000 cubic meters of trunkwood from Iceland's arable forests. Coupled with the recent surge in global demand for timber and timber products—driven in part by wood's superior ecological profile compared to alternatives like concrete, iron, and plastic—this presents a compelling case for heightened focus on value creation within Iceland's forestry sector.

Several attractive applications

The project's initial product concept screening identified several attractive applications for Icelandic timber, including garden sheds, saunas, Christmas trees, cross-laminated timber, laminated beams, peeled logs, and pallet blocks. Market demand is robust, encompassing both construction and consumer sectors. Examples include wood chips and pellets for energy and other applications, bio-coal production, firewood, and specialised products like heat-treated timber and transparent wood composites. Further promising avenues include wood foam as a sustainable alternative to plastic fish packaging, and experiential offerings such as forest recreation. The report also notes that certain products initially deemed less viable may still present opportunities for niche or small-scale production.

Future work

The report proposes continuing the project with a comprehensive analysis of existing forests and infrastructure, encompassing market analysis of wood product demand and competitive positioning, and scenario planning for resource optimisation. A central processing and sales system for wood products requires evaluation. Furthermore, the South Iceland Forestry Association will conduct further analysis of rural infrastructure, market opportunities, social factors, and environmental impacts. Funding will be sought to support this work.

About the report

This report was commissioned by the South Iceland Forest Owners' Association, with project manager Björn Bjarndal as their representative. Efla's Silja Björk Axelsdóttir and Alexandra Kjeld served as lead authors. Funding was secured through the South Iceland Action Plan, augmented by contributions from Land and Forest Iceland (Gústaf Jarl Viðarsson, forestry consultant, and Hrefna Jóhannesdóttir, department manager of Cultivation and Use), the Icelandic Academy of the Arts, and the Association of Product and Industrial Designers.