Europe is facing a housing crunch of historic proportions. The European Commission estimates that over two million new homes are needed every year across the bloc to meet current demand — a 25% increase on current construction rates. At the same time, the construction sector is responsible for more than 35% of the EU's total waste, and material extraction and building activities contribute 5-12% of national greenhouse gas emissions. The question is whether timber, long overshadowed by concrete and steel, can offer a sustainable path forward.
Dr. Subhra Bhattacharjee, director general of the Forest Stewardship Council (FSC), joined Angela Barnes on The Big Question to discuss whether Europe can scale up its timber industry without compromising environmental goals. "The global construction sector has doubled its carbon footprint in the last three decades and is set to double it again by 2050," she warned, underscoring the urgency of rethinking building materials.
Safety and quality: no compromise needed
Historically, European builders have preferred concrete, steel, and brick, unlike their North American counterparts. But modern engineered wood is changing perceptions. "There need not be a quality compromise, because recent innovations in engineered wood create stronger and more versatile structures," Bhattacharjee explained. These new materials are weather-resistant, fire-resistant, lighter, and yet stronger than traditional options. As wildfires become more frequent across the continent, fire safety is a natural concern, but Bhattacharjee insists that engineered timber can hold up against fire risks when properly designed.
Innovation is ongoing, and Bhattacharjee is confident that performance will only improve. "It gives you a material that is both weather resistant, fire resistant, lighter, and yet stronger," she said, pointing to advances in cross-laminated timber and other products that are already being used in high-rise buildings from Vienna to Stockholm.
Cost savings and insurance hurdles
One of the most compelling arguments for timber is cost. Construction processes using timber are significantly cheaper than traditional methods, with potential savings of up to 25% for buyers. "The cost differential comes because first, the transportation costs are lower - it's lighter to handle. Your on-site labour costs are lowered because you can bring in prefabricated structures," Bhattacharjee noted. Faster construction also reduces insurance costs during the building phase.
However, homeowners' insurance is slower to adapt. "The insurers need to be educated about the new timber products - the engineered timber products which are fire resistant and which can hold up against fire risks," she said. That education is underway, with closer collaboration between constructors, producers, and insurers. In regions with lower fire risk, premiums are already stabilising. "It is only a matter of time before the insurance industry catches up," Bhattacharjee predicted.
Economic impact: complementing, not replacing
Concerns about job losses in traditional industries like steel are understandable. According to Eurofer, the steel sector generated around €152 billion in gross value added and employed 293,000 people in 2025. But Bhattacharjee sees a complementary future rather than a zero-sum game. "Given that housing needs are growing very fast I don't see the potential for a full out downturn," she said. "What would be an ideal scenario would be low-carbon cement, recycled steel and construction timber complementing in bringing down the carbon footprint of the entire sector and contributing to low-cost housing that is needed."
The growth potential for timber is substantial. "North America and Europe are the two markets where timber construction is growing faster than anywhere else in the world. It is a $5 billion (€4.32bn) market that's growing at 10% on average per year," she noted. The green economy is expected to create around 1.5 million new jobs, including replacements for retiring workers. In the timber construction sector specifically, there will be a need for increased skilled labour, which means higher wages and better employment prospects.
Beyond the construction site, the benefits ripple through rural economies. "Once you trace it down the supply chain, in terms of the manufacturing of engineered wood, in terms of the needs for more responsible forest management, rural economies are likely to get revitalised," Bhattacharjee concluded. "There's potential across the entire supply chain from the forest floor all the way up to the building."
As Europe grapples with housing affordability and climate commitments, timber offers a rare win-win. But scaling up sustainably requires careful forest management, investment in innovation, and a shift in mindset among insurers, builders, and policymakers. The potential is there — the question is whether Europe can seize it.
