Lithuania Is Building the Future of Construction for Europe. Why Are We Still Slow to Adopt It at Home?

Lithuania is one of Europe’s leading producers of engineered timber. Lithuanian companies export high-value structural solutions to dozens of countries and contribute to projects that are shaping the future of modern construction. Yet there is a clear paradox: most engineered timber produced in Lithuania is exported, while its use in the domestic market remains minimal.

Only around 1% of the LVL (laminated veneer lumber) produced in Lithuania stays in the country. The rest is exported. The issue is not manufacturing capacity – it is demand. For example, given sufficient market demand, VMG Lignum Construction’s theoretical LVL production capacity could reach approximately 120,000 cubic metres per year. Meanwhile, the company’s near-term target is to achieve a monthly production rate of 9,000 cubic metres. This shows that Lithuania already has significant technological potential, but the domestic market is yet to fully utilise it.

Paradoxically, Lithuanian engineered timber is more likely to become part of a building in the Netherlands, Belgium or Scandinavia than in Lithuania. This raises a simple question: why?

One reason is that timber construction has evolved differently across countries. In Scandinavia, timber has been a natural construction material for centuries and continues to be associated with quality, durability and quality of life. In Lithuania, by contrast, concrete, reinforced concrete and masonry have dominated construction for decades. As a result, our choices are still influenced not only by technological considerations, but also by deeply rooted construction traditions.

Today, however, engineered timber represents an entirely different level of technology from traditional timber construction. It is a high-value structural material characterised by dimensional stability, structural precision and durability. It enables faster, more precise and more efficient construction, and is therefore increasingly becoming a core component of modern prefabricated construction.

Engineered timber is important not only for its structural properties, but also for its contribution to climate change mitigation. The buildings sector is one of the largest energy consumers in the European Union, accounting for around 40% of final energy consumption and approximately 36% of energy-related greenhouse gas emissions. Unlike concrete or steel, trees absorb carbon dioxide from the atmosphere as they grow and store carbon in their biomass. When timber is used in building structures, this carbon remains stored for decades, effectively turning buildings into long-term carbon stores. According to international expert estimates, the use of timber in construction can reduce construction-related CO₂ emissions by up to 75%.

However, technological and sustainability advantages alone are not enough. Decisions in the construction sector are also shaped by economic efficiency, the regulatory environment, accumulated design experience and market maturity.
Priorities also differ from market to market. In the Netherlands, for example, construction speed has become an important consideration. The shorter the project delivery time, the shorter the period for which construction equipment is required and the sooner an investment can begin generating returns. As a result, the focus is increasingly shifting from the price of individual construction materials to the overall economic efficiency of a project.

This is one of the reasons why prefabricated construction solutions are gaining momentum. Today, up to six modules can be installed on site per day, while a five-storey building comprising around 300 modules can be assembled in just two to three months. This fundamentally changes the logic of the construction process, with an increasing share of work moving into the factory and the construction site becoming primarily a place for assembly.

Global trends further illustrate the scale of the market opportunity. Australia, with a population of around 28 million, consumes approximately 350,000 cubic metres of LVL annually. Europe, with a population of roughly 450 million, consumes around 450,000 cubic metres. This suggests that the European market is still at an early stage in realising the full potential of engineered timber.

So why is progress slower in Lithuania?
There is no single reason. Regulation and fire safety requirements remain among the key challenges, particularly for taller buildings.

Long-established design and construction practices also play an important role. For decades, most buildings have been designed using concrete and steel, meaning that the entire design and construction ecosystem has naturally developed around these materials. Wider adoption of engineered timber therefore requires not only new technologies, but also the evolution of design practices and the continued development of market experience.

Another important factor is how we assess project economics. Too often, the focus remains on the price of individual construction materials, while internationally there is an increasing emphasis on total project value – including construction time, labour requirements, capital costs, operational efficiency and environmental impact. The cheapest construction material does not necessarily result in the most economically efficient building.

Education is equally important. We see this clearly in prefabricated renovation. The technology enables buildings to be renovated faster, with greater precision and less disruption to residents’ daily lives, yet people naturally tend to choose what they already know. New solutions do not become established simply because they are better – they require time, successful reference projects and trust.

Lithuania has already built the technological foundation. We have modern manufacturing facilities, accumulated expertise and international experience. As regulation evolves, the number of successful projects increases and public confidence grows, we will be able to speak not only about a country developing world-class construction solutions, but also about one that widely applies them in its own market.