How regional mass timber markets can support decarbonization and help build local economies

The global market for mass timber – construction products made of multiple layers of wood that are used for beams, columns or panels – is expected to grow to $3.7 billion by 2032 from $1.5 billion in 2020, according to a recent report. This growth is being driven by the US, Europe and Asia-Pacific building construction industries, as developers see the environmental and economic benefits of mass timber.

Hyperlocal approaches to creating a mass timber industry are already taking shape around the world. In Bhutan, for example, there is a collaboration between the Bhutan government, Bauhaus Earth, Arup and the Climate Smart Forest Economy Program to create a circular regenerative construction economy, including a local mass timber market. A similar approach to build a local mass timber value chain is taking shape in East Africa.

In North America, the Canadian provinces of British Columbia and Ontario have created local mass timber action plans, while the US city of Boston has also successfully catalyzed a local mass timber market through targeted accelerator programmes. And in Detroit, Michigan, real estate developer, Bedrock, has partnered with Michigan State University programme MassTimber@MSU, the United States Forest Service and other public, private and academic stakeholders to build the Great Lakes Open-Source Timber Innovation Collaborative. This will further develop mass timber research, manufacturing, fabrication, design and construction capacity in the Great Lakes region.

This kind of investment boosts a region’s ability to build and employ better, more sustainable and regionally appropriate markets – in the case of mass timber, producing innovative materials and construction methodologies for the built environment.

Mass timber ecosystems combine sustainable forestry, construction systems, material production processes and advanced finished goods manufacturing to create a localized value chain. This positively impacts the local construction business, generates additional workforce housing, contributes to decarbonization of the built environment and could eventually support broader regional economic diversification.

An actualized, fully matured mass timber ecosystem helps regional stakeholders – from foresters and rural policymakers to urban real estate developers and end-users – in five key ways:

Mass timber products can differ in size, material, design and function. This diversity and adaptability lends itself to tailored solutions, incorporating a broad range of design options that fit different uses and preferences. This creates more revenue streams for manufacturers by allowing them to tap into multiple markets.

There are cost savings for builders too: by sourcing different types of timber products, builders can optimize costs and efficiencies within their projects through waste reduction and by shortening build times.

Mass timber sourced from trees is a renewable resource – it can be sustainably managed and regrown. When timber is harvested responsibly and replanted, it provides a continuous cycle of resource availability without depleting the earth’s natural resources, unlike nonrenewable materials such as steel and concrete.

Mass timber buildings also act as carbon sinks. The wood used in these structures stores carbon that trees have absorbed throughout their lifespans. Unlike burning or decomposing wood, using wood in buildings keeps the carbon sequestered and helps to reduce the construction sector’s carbon footprint. In fact, certain types of mass timber can reduce construction-related emissions by up to 26% due to its ability to sequester carbon while reducing reliance on carbon-intensive materials like concrete and steel.

Mass timber construction often relies on regionally sourced wood, leading to increased demand for local forestry and manufacturing facilities. This is why building a local ecosystem is critical. The demand creates jobs in tree harvesting, milling and processing. It can also stimulate non-manufacturing industries like logistics, transportation and quality control, which directly support the regional economy.

And because many mass timber elements require a specialized finish during the manufacturing process, skilled labor is needed in the areas of finishing and product assembly. This need will increase as regional facilities scale up to meet growing demand for mass timber products.

A localized mass timber industry can foster sustainable forestry practices and incentivise the maintenance of healthy, well-managed forests. There is a greater need for sustainable timber harvesting to ensure a continuous supply of wood without depleting forest resources, particularly given that standing forests may be more valuable for timber production than deforestation for agriculture or development purposes.

Further, this increased demand often leads to more research and innovation in sustainable forestry, which benefits the health and sustainability of regional forests.

Mass timber sourced from regional forests reduces reliance on international logistics and shortens supply chains. Steel production, by comparison, is heavily concentrated in a few areas. This means that countries that rely on steel imports are affected by geopolitical tensions, trade restrictions and price volatility. By shifting demand from steel to locally sourced mass timber, countries like the US can reduce their exposure to global supply chain risks.

While hyperlocal mass timber ecosystems are already being developed in other parts of the world, there is scope to transform many more regions into industry leaders to satisfy the growing demand for sustainable construction products.

The Great Lakes region in the US is currently underrepresented in North America in many components of the mass timber supply chain, but the area has several strategic advantages in this space. It is home to world-class universities dedicated to innovative forest management and materials research, as well as having a deep history of manufacturing and fabrication.

The Great Lakes Open Source Timber Innovation Collaborative is supported by the World Economic Forum’s Centre for Urban Transformation and led by Bedrock and MassTimber@MSU, with representation and support from institutions in the Great Lakes states of Michigan, Minnesota, Wisconsin, Illinois, Indiana, Ohio and New York. It will harness the region’s legacy manufacturing capability to create a mass timber industry leader.

The collaborative seeks to remove state siloes by sharing and integrating existing information and capacity across state lines. A Great Lakes Mass Timber Strategy – due to be completed by the end of the first quarter of 2025 – will also help to mobilise funds, partnerships and other opportunities for this new mass timber ecosystem.

Ultimately, the initiative aims to shape continued sustainable development and mass timber industry growth throughout the Great Lakes Region. And, as developers continue to realise the environmental and economic benefits of mass timber, the collaborative could also provide a blueprint for other hyperlocal mass timber ecosystems around the world.