Proper insulation can lower heating bills. Yet biobased insulation offers a whole host of other benefits as well.
Today, startups are turning plants into building materials that keep homes warm. Biobased insulation comes with fewer environmental impacts than the mineral wool and polyurethane common in buildings today.
Biobased insulation is especially poised for success in the EU, where it can support multiple regional policy priorities: energy security, economic security, and decarbonisation. Here’s how.
Europe backs Finnish biofoam
In Europe, the fortunes of biobased construction companies are rising. Finland’s Fiberwood secured a $3.1 million EU grant in June 2025 to scale its circular insulation foam. Made from recyclable and plastic-free wood fibre that would otherwise be landfilled or burnt, its biofoam is circular and biodegradable.
Using this EU funding, Fiberwood will focus on optimising production, testing new sources of used wood feedstocks, and improving its technical performance.
Fiberwood’s ultimate goal is to lay the foundations for a full commercial factory. With mass production, prices can come down and drive wider market adoption.
Decarbonising construction
Fiberwood’s low-carbon insulation material is special because it can replace petrochemical materials all too common in the construction sector.
Biobased insulation materials – particularly when made from waste – have a far smaller carbon footprint compared to traditional mineral wool or petroleum-based versions.
Overhauling the materials we build with is a vital part of fighting climate change. The construction industry contributes 42% of global greenhouse gases. Yet it is one of the hardest to decarbonise.
The construction sector’s carbon footprint mainly comes from the materials it uses to build with, not the type of energy it uses to power itself.
This means decarbonising construction is not just a matter of electrification. We must also find renewable, circular alternatives to replace the mined, fossil-based materials that make up our buildings. Low-carbon insulation will be part of this equation.
Bio-insulation meets EU policy
The EU’s decision to finance a biobased insulation startup speaks volumes about the region’s priorities today.
ING and Oxford Economics are both forecasting that demand in Europe for building renovations will grow over coming years, particularly for renovations designed to cut energy consumption.
Oxford Economics predicts a surge in European renovation. Coupled with new building sustainability regulations, this marks a huge opportunity for biobased companies
Demand for insulation materials is likely to ride this new wave of construction work. Around 64% of final European household energy use goes on heating. Insulation can cut this significantly, making it a vital part of energy efficiency upgrades.
Europe’s newfound appetite for energy renovations is driven by a regional push to reduce energy consumption as much as possible. Economic and security factors are behind this.
European businesses and consumers have faced rising energy costs since the pandemic. Russia’s war in Ukraine also prompted the EU to switch from cheaper piped Russian gas to more expensive liquefied natural gas.
As the EU’s ties with Russia continue to deteriorate, Europe’s economic motives to lower energy consumption have merged with security priorities. The bloc wants to become more self-sufficient in critical resources like energy to avoid the supply shocks it has been experiencing since 2022. Some of this can be achieved by lowering overall demand for import-intensive commodities like gas.
Sustainable energy security
This impetus to increase energy efficiency in building stock is also coming from climate policy.
The EU’s Renovation Wave strategy, part of the European Green Deal, aims to improve energy efficiency in buildings across the region. It plans to renovate 35 million buildings across the public and private sector by 2030. This represents double the expected renovation rate in the region – a huge fillip for the construction industry.
The renovation policy is already having an impact on markets and national laws. Europe dominated the market for insulation material in 2024 thanks to this new demand driver. Already, some countries are anticipating the incoming EU regulations: France has banned the rental of energy inefficient buildings from January 2025.
These building renovations will have to meet strict regulations on energy efficiency and greenhouse gas emissions laid out by the EU’s separate Energy Performance of Buildings Directive, adopted by the Parliament in 2024.
The EU’s Energy Performance of Buildings Directive does not just aim to reduce emissions from heating and lighting. It also encourages new builds to reduce emissions locked up in their building materials. This will be a boost to biobased and circular construction companies in Europe developing the low carbon materials the sector needs to hit these targets.
Nordea estimates that the Renovation Wave will require a total of €1.2 trillion between 2024 and 2030. The project is set to mobilise a whole set of private and public funds to achieve its goals.
Fire-safe biofoam
The EU renovation overhaul will not face a lack of choice when it comes to sustainable insulation materials. Yet some consumers will still need convincing on safety aspects such as fire resistance.
The EU-funded SAFE-PUR project is addressing fire safety concerns around biobased insulation materials. The project has patented a new firesafe insulation material made from C5 cellulosic sugars and materials from soy, castor, and rapeseed oil. It is meant to replace widely-used polyurethane or polyisocyanurate foams, which are highly flammable and produce extremely toxic fumes when burnt.
The biobased material developed by the EU project was found to reduce flammability by around 30 percent compared to polyurethane foams. It was also less toxic when on fire, reducing smoke emission and toxicity levels by around 80 percent.
The material improves on fire safety because it does not contain the same chemical additives normally used in manufacturing insulation materials, like foaming agents and stabilisers.
Straw and grass support circular security
Since the pandemic, the EU has wanted to reduce its import dependence on critical materials and energy.
For biobased insulation to support these priorities, it must be made from abundant and easily accessible local feedstock.
Feedstock doesn’t come more accessible than grass clippings, the material of choice for sustainable construction company Ecological Building Systems. The company’s ‘Gramitherm’ insulation material is made from cutting taken from public grass verges mixed with recycled jute fibres and a binder made from recycled polyester. It claims that their material is carbon negative.
The product has also achieved A+ ratings in tests for emissions of volatile organic compounds. It also meets European criteria E for fire resistance, meaning the material won’t transmit fire to other parts of the building.
Agricultural waste straw has lots of potential as insulation feedstock. In April this year, Chinese researchers published a fully biobased wheat straw insulation material that uses biobased additives as binders and fire-retardants.
Italy’s Prespaglia is one of the premier EU construction materials companies already working with straw as insulation. Their pressed blocks of cereal straw, clay, and hydraulic lime are purposely made for construction.
The ability to scale high-performance, fire-safe insulation made from such an abundant form of waste as straw would be a gamechanger for the circular economy.
The insulating capabilities of straw vary with species, which display minute differences in microstructure. A 2018 study found that wheat straw had the highest insulating performance and barley the lowest. The way that straw stems are arranged as well as the density of straw all impacts on final performance too.
These natural variables suggest that with more research and experimentation, industry could uncover more straw-based insulation materials with even higher performance specs.
Climate and security
The EU has faced a more uncertain energy landscape after 2022. Energy security concerns now permeate every aspect of its policy.
Climate goals risk being sidelined as security gets greater emphasis. However, biobased insulation is a good example of how the EU can address resource security and climate at the same time.
In its drive to upgrade energy efficiency in buildings, the EU can help scale sustainable insulation materials that help boost low carbon manufacturing while lowering costs for consumers.
Low carbon manufacturing can also support regional self-sufficiency. This is because waste feedstock can be easily sourced from local industries, easing reliance on imports.
Finally, waste-based biofoams are a key tool for decarbonising the building sector, a major priority in the fight against climate change. Apart from lower carbon impacts, renewable material also biodegrades safely in nature, building a leave-no-trace ethos into construction.
The EU push to strengthen energy security is also a decarbonisation opportunity. With biobased construction companies proliferating in the EU, the low carbon technology it needs is already there for scaling.