Forest industry shifts toward AI and sustainability, Pulp & Beyond speakers say

Key takeaways from the Pulp & Beyond conference on how the industry is pivoting to data-driven innovation

Key takeaways:

  • The forest industry is shifting to an integrated strategy where resilience, AI, and sustainability are key to competitiveness in a volatile global market.
  • AI is no longer optional, but essential for process industries like pulp and paper, with use cases in predictive maintenance and process optimization already boosting efficiency.
  • Innovation is accelerating with a focus on valorizing side streams like lignin for new applications and advancing fiber-based packaging to meet regulatory and consumer demands.
  • Collaboration is crucial, as unlocking potential in areas like lignin-based batteries and new packaging requires strong partnerships across the entire value chain, from startups to end-customers.

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The forest industry is entering a new phase, where resilience, AI‑enabled operations and sustainability‑driven innovation are no longer separate priorities but part of a single, integrated strategy for competitiveness in an increasingly uncertain global environment.

These were some of the key messages at the conference Pulp and Beyond, organized in Helsinki, Finland, on Thursday April 17. Conference topics ranged from the use of AI and digital technologies to the valorization of forest industry side streams and by‑products, while the importance of collaboration across companies and industries was highlighted throughout the program.

Here are Fastmarkets’ key takeaways from Pulp & Beyond:

Uncertainty is the new baseline, but resilience is improving

The conference began with Nordea’s chief economist Tuuli Koivu, highlighting that geopolitical tensions, trade fragmentation and supply‑chain disruptions are no longer temporary shocks but structural features of the global economy.

Despite this, global growth has remained resilient, provided disruptions do not escalate into exceptional systemic events. Success increasingly depends on companies’ ability to adapt quickly rather than rely on precise economic forecasts.

Koivu also highlighted that Europe must close the technology and AI gap to remain competitive. Europe risks long-term stagnation if it fails to keep pace with rapid technological progress seen in the US and China. While Europe’s industrial base remains strong, slow adoption of AI and digital technologies is becoming a competitiveness challenge rather than an IT issue.

AI is becoming essential in forest process industries

Across multiple presentations and panel discussions, AI was described as a necessity rather than an option for complex, data‑intensive industries such as pulp and paper. Concrete use cases, like predictive maintenance, process optimization and knowledge capture, are already delivering measurable benefits in yield, energy efficiency and decision‑making speed. Human attention, not machinery, was repeatedly identified as the main bottleneck AI can address.

However, industry expert Antti Vasara, venture partner at Kvanted, warned against “pilot purgatory,” stressing that AI only creates impact when it is embedded into everyday operations and linked to clear business outcomes. Companies were encouraged to focus on solving specific problems and building trust through transparency, explainability and human oversight from the outset.

As the forest industry is traditional and long-established, it holds decades of proprietary process, forestry and operational data, according to Vasara. When combined with deep domain knowledge, this data forms a powerful competitive moat that enables effective industrial AI. Collaboration between startups and established industry players was seen as key to unlocking this potential.

The forest industry business model is expanding beyond traditional products.

Several presentations highlighted a shift toward viewing side streams of pulp and paper mills for value creation. Side stream like lignin is increasingly seen as future revenue sources. Speakers highlighted lignin as an underutilized side stream from existing industrial processes that is currently used mainly for energy, but which could be upgraded into higher‑value applications. Patenting activity has increased sharply over the past two decades, highlighting strong research momentum and growing interest in lignin‑based applications.

Lignin‑based battery materials were discussed as an emerging, longer‑term opportunity rather than a near‑term commercial solution. With global battery demand expected to grow rapidly and China controlling the whole lithium-ion battery supply chain, interest is increasing in alternative chemistries that reduce dependence on critical raw materials.

In particular, lignin‑derived hard carbon for sodium‑ion batteries was presented as a potential area of research, offering the use of abundant materials and potential for more local European supply chains. However, Luke Sweeney, senior analyst on battery cost modelling at Fastmarkets, cautioned that while lignin‑based precursors have shown early promise in forming complex disordered carbon structures suitable for sodium‑ion anodes, key challenges remain. These include ensuring feedstock consistency — given natural variation between tree species — and achieving electrochemical‑grade purity and long‑term performance.

As a result, most lignin‑based battery solutions remain at an early technology readiness stage, requiring further piloting and scale‑up before commercialization can be realized.

During a discussion on utilizing lignin, speakers from Södra, Stora Enso, and VTT Technical Research Centre of Finland, emphasized that unlocking lignin’s potential will require focused piloting, stronger partnerships between industry, technology providers and end‑customers, and sustained commitment across the value chain to move solutions from demonstration to commercial scale.

Fiber‑based packaging innovation is accelerating under regulatory and market pressure.

Demand for fiber‑based packaging continues to grow, driven by regulation, sustainability requirements and consumer trust. However, speakers emphasized that success depends on performance, cost competitiveness and scalability. Molded fiber — a packaging formed from pulp into rigid shape — and cellulose‑based barrier coatings were presented as increasingly viable alternatives to plastic, provided proof‑of‑concept piloting and standardization are achieved, according to Marianne Jutila, head of product management & strategic marketing at Huhtamäki and Vesa Kunnari, manager, technology concepts, at VTT Technical Research Centre of Finland.

Collaboration and people remain decisive factors.

Beyond technology, the event underscored the importance of people, culture and partnerships.

Large‑scale investment projects showed that predictability, early planning and strong collaboration across companies, research institutions and startups are essential for turning innovation into commercial reality.

“In large investment projects, open communication and close co.-operation between all parties during the execution phase are essential,” Outi Suomi, Afry’s, the head of PMO, Pulp & Paper Segment summarized to Fastmarkets. “A clear business case and solid feasibility studies early on are critical for success in the later stages,” she added.

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