27 March 2026 | Article

The Forest Economy Is Changing

When RMK in Estonia recently announced that it is seeking partners to build a financial system for carbon credits, it sent a clear signal not only to Estonia, but to Europe as a whole. This is not a pilot initiative, but a shift in how forests are valued in a modern economy.

RMK, managing Estonia’s state forests, is moving beyond the traditional view of forests as raw material. Instead, it is exploring how carbon sequestration and ecosystem services can be transformed into verifiable and tradable assets. In this model, the value of a forest is no longer limited to harvesting timber, but increasingly lies in allowing it to remain standing and continue storing carbon over time.

This reflects a broader transition. Forestry has historically focused on volume, growth, and optimized rotations. But as climate becomes central, forests are increasingly seen as long-term natural capital assets. This shift opens the door to new revenue models where carbon credits and biodiversity play a key role.

The driver is clear. Many countries, including Estonia, face challenges in meeting climate targets related to land use and forestry. This creates a practical question, should value continue to be maximized through extraction, or through systems where forests generate value by storing carbon and maintaining and developing ecosystems?

What makes RMK’s move particularly interesting is not only what Estonia is doing but what Sweden is not doing. Sweden has larger forest resources, more capital, and a highly advanced forest industry. Yet similar initiatives are largely absent. This raises questions about existing structures and incentives.

Part of the explanation lies in historical lock-in. The Swedish forestry model is deeply rooted in production efficiency, where value is measured in cubic meters. Another factor is incentives today’s system rewards short-term output, while carbon storage and biodiversity are not yet fully priced. There is also a broader hesitation to build financial systems around nature, which requires transparency, standardization, and new business models.

What RMK is now testing is whether forests can become part of a climate and nature-based economy, where value is generated not only through harvesting, but through long-term stewardship.

For those working with forest preservation and carbon markets, this is a critical development. The value of older forests is increasing, biodiversity is gaining economic relevance, and demand for verified climate solutions is growing rapidly. At the same time, the systems needed to scale this transformation are still emerging.

This leads to a fundamental question for Sweden do we want to continue maximizing extraction, or start maximizing long-term value?

Estonia has taken a first step imperfect, but forward-looking. Sweden has all the prerequisites to do the same.

The question is not whether change will come, the question is who will lead it.

Photo: fightCOtwo