Metsä Group raises €3M for Finnish startup Fiberwood to innovate bio-based insulation

09 Feb 2023 --- Finnish startup Fiberwood has raised €3 million (US$3.23 million) in late seed funding led by Metsä Group for its 100% ecological wood fiber insulation and packaging materials made from mechanical wood industry side streams.

The funding round was conducted by Metsä Group’s innovation company Metsä Spring, with participation from Stephen Industries and public financing from Business Finland. Fiberwood will use the money to develop and scale up the production capabilities of its pilot plant as it heads into industrial-level continuous production. 

Fiberwood’s insulation sheets are bio-based, plastic-free and compostable. The product is made from wood pulp and side streams from the mechanical wood industry with “special” foam-forming technology. 

“Compared to fossil-based plastic packaging solutions, depending on the fiber base, Fiberwood’s packaging material can be recycled in cardboard recycling, composted, used as soil improvement material, or even used for planting seedlings and seeds,” Karita Kinnunen-Raudaskoski, Fiberwood’s director of technology and product development, tells PackagingInsights.

Metsä Spring coworkers collaborating on Fiberwood startup. Ecological fiber solution
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.

“Because our production process enables the use of different raw materials, we can tailor our products to suit the target, such as for packaging that requires softness, or by using raw materials obtained from the side streams of the mechanical forest industry, for packaging that requires strong protection,” says Kinnunen-Raudaskoski.

Niklas von Weymarn, CEO of Metsä Spring, tells us that not all bio-fibers are automatically ecological. He asks, “is the wood from a growing forest making the raw material truly renewable? Is the level of forest certification as high as possible ensuring, for example, biodiversity aspects? Is the material made for recycling? Will the material decompose in nature?”

Von Weymarn continues that Metsä Group can answer “yes” to the questions. “In the case of Fiberwood, the raw material is a side-stream, which makes that concept even better.”

Shifting away from fossil fuels
The global insulation market is valued at €25 billion (US$26.89 billion), according to Precedence Research. Fiberwood says the global insulation market is currently dominated by two products: inorganic mineral wools, such as stone or glass wool and fossil-based cellular plastic products, like polystyrene. 

The companies believe these products have more negative environmental consequences as they are not recyclable or biodegradable. Fiberwoods 100% ecological insulation sheets stacked up.

“One key goal is to replace fossil-based plastic solutions that are not optimal in terms of environmental sustainability. Somebody needs to bring these more sustainable solutions to the market,” asserts Kinnunen-Raudaskoski.

She continues by saying it is vital to use fiber for “making material products that can be recycled – then if no such solutions are applicable, by generating energy. Many of the raw materials that Fiberwood are keen to utilize are today incinerated directly. Making packages and insulation material is a better first utilization for this material. ”

Legislation drive 
Both von Weymarn and Kinnunen-Raudaskoski speak on how legislation pushes for more innovation within the fiber industry as it strays from single-use plastics and fossil fuels. 

“There are already efforts being made to limit or prohibit the use of fossil foam materials in packaging by means of legislation,” says Kinnunen-Raudaskoski.

“The legislative environment is also changing quite dramatically, especially in the EU. For example, the EU Single-Use Plastics Directive is banning several plastic-based products and restricting many others. The European Commission has recently proposed new rules on packaging that would cover an even larger field within the packaging industry,” adds von Weymarn.

Packagers are increasingly turning away from plastic alternatives, highlighted by Innova Market Insights’ 2021 Top Ten Trend “Fiber-based Frenzy.” The market researcher examined the rush industry players are making to divert from plastics as international legislation and public sentiment tightens. 

“Products replacing fossil-based packaging materials have entered and are continuing to enter the market, which is a very good thing. The packaging market is huge and there is room for various ecological and sustainable packaging solutions,” concludes Kinnunen-Raudaskoski.

By Sabine Waldeck