Ecological Economics 39 (2001) 145 – 161 ANALYSIS Industrial ecosystem in the Finnish forest industry: using the material and energy flow model of a forest ecosystem in a forest industry system Jouni Korhonen a, *, Margareta Wihersaari b , Ilkka Savolainen b,c a Uniersity of Joensuu, Department of Economics, PO Box 111, 80101, Joensuu, Finland b VTT Energy, Finland c Helsinki Uniersity of Technology, Department of Forest Products Technology, Helsinki, Finland Received 14 March 2000; received in revised form 7 May 2001; accepted 8 May 2001 Abstract Industrial Ecology is an industrial environmental management concept with an analogy in the natural ecosystem. In an ecosystem, materials are recycled between organisms, and energy is embedded in the matter of the food chain, while the only external input to the system as a whole is the solar energy. An Industrial Ecosystem is a system where the industrial actors use this natural recycling model and co-operate by using each other’s waste material and waste energy flows to minimize the system virgin material and energy input as well as the waste and emission output from the system as a whole. In theory, the economic environment win–win can be achieved as raw material, emission control and waste management costs are reduced through using waste as a resource of production. In this paper, the material and energy flows of the forest ecosystem are considered, and this natural recycling model is used to construct an industrial ecosystem in the forest industry of Finland. Recycling of matter including nutrients and carbon constitutes the basis in the operation of the forest ecosystem as well as in the operation of the forest industry system. The forest industry will use the cycle in these flows as a source of raw materials and energy. An industrial ecosystem is constructed with the flows of matter, nutrients, energy and carbon. © 2001 Elsevier Science B.V. All rights reserved. Keywords: Industrial ecology; Industrial ecosystem; Matter; Nutrients; Energy; Carbon cycle; Forest industry industrial ecosystem www.elsevier.com/locate/ecolecon 1. Introduction An Industrial Ecosystem (IE) is an industrial system that uses the model of a natural ecosystem in terms of its main material and energy flows. As defined by the often-cited article by Frosch and * Corresponding author. Tel.: +358-13-251-4229; fax: + 358-13-251-3290. E-mail address: jouni.korhonen@joensuu.fi (J. Korhonen). 0921-8009/01/$ - see front matter © 2001 Elsevier Science B.V. All rights reserved. PII:S0921-8009(01)00204-X