This briefing documents the subsidies flowing to the pulp and paper sector, their social and ecological impacts in Finland, Portugal, Spain and Sweden, and offers a credible alternative vision for where that funding should go.
It finds that although the pulp and paper industry is dominated by a few giant conglomerates, it has an outsized and destructive effect on forests in Europe and abroad, and still receives huge taxpayer-backed subsidies. The impacts are felt on our purses, our climate, and our rural economies, but also within other forestry sectors, as the benefits enjoyed by this large industry squeeze smaller actors looking to make a living from better and more resilient forestry practices.
It is not surprising that pulp and paper lobbyists are calling to weaken laws that support better forestry, such as the Land Use and Land Use Change Framework (LULUCF). However, subsidies are not intended to prop up abusive and extractive oligopolies; they are there to ensure smaller, environmentally sustainable businesses are able to get off the ground, scale up, and create opportunities to deliver local, thriving rural economies. Nowhere is this clearer than in the forestry sector, where the initial cost of changing from clear-cutting to continuous cover forestry can be intimidating, but the benefits (economic, social, ecological) are myriad.
Many of Europe’s small and medium-scale forest owners and professional foresters have said that the future lies in high-value, lower-impact forestry — continuous cover approaches, longer timber rotations, and the cascading use of wood that maximises the climate and economic value of every cubic metre harvested. But they are not receiving the public support they need to make that shift.
Instead, an estimated €5.9-6.9 billion in forest biomass subsidies flowed in 2024 to some of the largest conglomerates in the sector — companies that already dominate forest supply chains from land ownership to processing. And this is likely an underestimate.
The LULUCF Regulation is a framework designed to shift the sector towards lower-impact, higher-value forestry. Weakening near-term targets, or moving away from a target for the sector would remove one of the few remaining levers we have to bend the curve — at exactly the moment when the scientific case for acting on logging has never been stronger.
Meeting LULUCF’s targets will require redirecting support toward the foresters who are already implementing — or ready to implement — the practices the regulation is designed to incentivise. Models exist. For example, EPN member Fern has produced an analysis which