The “special background” of the Nature Restoration Law
The European Union’s Nature Restoration Law, which came into force in August 2024, mandates that member states restore at least 20% of EU land and sea areas by 2030, and all ecosystems in need of restoration by 2050. To achieve the overall 20% target, the regulation includes incremental goals for specific habitat types, including forests, grasslands, and peatlands currently in poor condition. By 2030, countries must ensure a good condition for at least 30% of these habitats currently in poor condition – with priority given to Natura 2000 territories. This figure must increase to 60% by 2040 and reach 90% by 2050. During the drafting stage of the regulation, both Finland and Sweden strongly opposed these targets, pointing to the disproportionate costs in countries with a high proportion of forests. Currently, in the autumn of 2026, member states are at a critical stage – national nature restoration plans are being developed and coordinated, in which each country must itself define specific areas, measures, and funding sources. This process has currently caused enormous tension between Finnish producers and the government.
A wake-up call for the Finnish forestry sector
Finnish sawmill owners, farmers, and those working in the paper and pulp industry have agreed on a joint, very insistent appeal to Prime Minister Petteri Orpo. The industry is demanding that the government protect timber resources as much as possible from the restrictions imposed by Brussels in the national nature restoration plan.
The Finnish sector is facing a funding shortfall of approximately 400 million euros per year, which is required to meet the requirements of this Brussels regulation. Tino Aalto, head of the Finnish Sawmill Association, emphasizes that companies have made large investments in production capacity, relying on the stable availability of local timber, which is now directly threatened by the new plan. Scenarios modeled by the Natural Resources Institute Finland Luke show that by meeting the regulation’s requirements to “restore” 2.3 million hectares of commercial forests, the annual logging volume could fall by as much as 16.8 million cubic meters – from Finland’s baseline of 80 million cubic meters.
A reduction in timber harvesting of this scale would cause losses of up to 1.8 billion euros per year for the forest sector's value added. For comparison, the “most favorable” scenario, which would involve the restoration of 300,000 hectares, would cause “only” 370 million euros in losses. Scientists have concluded that losses in the milder scenarios could only be compensated for by additional annual investments of one billion euros in higher-value products, such as packaging or lignin chemicals.
The current draft proposal, which the Finns are preparing to send to Brussels, remains incomplete. As usual, it is never enough for eco-activists; Greenpeace reports that forest habitat areas are currently excluded from the project because tense negotiations with the European Commission are ongoing. Decision-making is politically divided – the current government will submit a draft of the plan, but the final plan will be approved by the next Finnish government in September of next year.
Forecasts for Finland
For Finland, whose economic pillars have historically been woodworking and pulp, the incorrect implementation of the regulation threatens a loss of global competitiveness and rising unemployment in the regions. Metsä Group executives warn that errors in the plan could weaken the country’s fiscal position by 0.5–1.5 billion euros per year.
The majority of restoration areas in Finland are in the hands of private owners – especially in the productive south of the country. If the state attempts to implement the regulation through repressive methods rather than fair compensation, the goals will fail due to sharp resistance. It is that simple, because the Finns will not give up.
Finland will seek to use the maximum flexibility allowed by the regulation in its national plan to protect its industry. However, the forest sector will have to diversify rapidly – moving from classic sawmilling to higher-processing chemical and composite material production to create greater value from smaller volumes of timber.
What does this mean for us?
For the Latvian forest and timber industry, the Finnish crisis is not a distant example, but a direct mirror image and an early warning. We, the Forest Certification Council of Latvia, have repeatedly pointed out that the Finnish experience is fully applicable to the situation in Latvia. It is critically important for Latvia to monitor how officials define the national nature restoration plan. We must not allow 'over-implementation' or so-called gold-plating by undertaking stricter obligations than the regulation requires, which would paralyse the local timber market.
Latvian forest sector organizations, together with the government, must be able to argue in Brussels that rational and active forestry ensures regional security and independence from fossil resources. Only a strong forest sector is capable of generating the tax revenues from which real nature conservation can be financed in the first place.
The Finnish example shows that if nature restoration affects private forests without adequate funding, the process will reach a dead end. In Latvia, a carbon removal and farming regulation (CRCF) should be more actively developed, which would allow private forest owners to earn profit from ecosystem services, for example, through rotation periods or afforestation, turning restrictions into a new business model.
It is absurd, but in a situation where a sharp increase in demand for timber is predicted worldwide, the forest and woodworking industry in Finland, and in Latvia as well, must prepare for a possible long-term decline in roundwood resource availability due to the implementation of the Brussels regulation. This means that public and private capital will need to increasingly invest in timber construction, wood chemistry, and innovation to maintain the sector’s place in the GDP structure.
The Finnish example clearly shows that the European Union’s Nature Restoration Law is not just an ecological document – it is a direct economic instrument that redistributes resource availability. The Latvian forest sector must act proactively by demonstrating the real situation in the forest and demanding an assessment of the economic consequences of every restriction that is attempted to be introduced into the National Development Plan of Latvia.
Sources: Information sites of the Finnish and European Union forest and related industries