Originally published on Bloomberg.com on February 7, 2025 as “Climate Rules Threaten the Money Growing in Nordic Trees”

Swedes and Finns have long monetized their forests. EU climate goals — seen as a threat to both family wealth and the two national economies — are fast becoming a lightning rod for anger.

Birgitta Velander’s forest is her retirement fund, a source of income, and an inheritance she hopes to one day pass on to her children. The 81-year-old’s family has cared for the 200-hectare (500-acre) forest outside the northern Swedish town of Sundsvall since the 19th century, cutting down old trees and selling them to wood and pulp mills for extra cash before planting new ones.

In Sweden and neighboring Finland, forestry is, to all intents and purposes, a retail asset class. In Sweden, some 300,000 people own, in total, half of the country’s forests. In Finland, 60% of forests belong to 600,000 individuals. Owners like Velander have been able to work their land with relatively light regulations, generally free to harvest trees when and as they chose.

The way these small forest owners traditionally manage their land is, they contend, also good for the climate, as they say they plant more trees than they cut down. But this approach, along with their investments, is under threat from a growing number of European Union regulations aimed at protecting biodiversity and reducing the bloc’s carbon emissions. In Sweden and Finland these measures have been interpreted as a potential ban on logging trees because that’s the only way they will hit their decarbonization targets on time.

“The EU doesn’t understand how we manage and care for forests here in Sweden,” Velander said. “It’s a big responsibility to own a forest, and forest owners take that responsibility seriously.”

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