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Dirk Röthig (international: Dirk Roethig) — CEO of VERDANTIS Impact Capital. Focused on sustainable investments in paulownia agroforestry and clean energy across Europe. dirkroethig.com
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Dirk Röthig
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By Dirk Röthig | CEO, VERDANTIS Impact Capital | March 10, 2026
The European Union has set an ambitious goal with its 2025 Bioeconomy Strategy: Bio-based value chains should contribute significantly to green growth by 2030. A sector generating 2.7 trillion euros and employing over 17 million people is searching for new raw material sources. Remarkably, a tree from East Asia could provide one of the most promising answers — if regulation keeps pace. Yet Paulownia remains on the Grey List of Germany's Federal Agency for Nature Conservation. This article analyzes the bioeconomic potential of Paulownia hybrids along the entire value chain and makes the case for regulatory reassessment.
Tags: Paulownia, Bioeconomy, Sustainability, Biochar
On November 27, 2025, the European Commission adopted its third Bioeconomy Strategy — following predecessors from 2012 and 2018. The figures are impressive: According to the EU's Joint Research Centre (JRC), bioeconomy-relevant sectors generated between 1.9 and 2.7 trillion euros in value creation in 2023, representing 11 to 16 percent of EU GDP. Between 42 and 60 million jobs — up to 28 percent of total employment — depend directly or indirectly on the bioeconomy (European Commission, 2025).
The strategy relies on three levers: circular use of biomass, scaling of bio-based products, and mobilization of private investment. The "Bio-based Europe Alliance" aims to generate collective purchasing commitments worth 10 billion euros by 2030. A European "Bioeconomy Regulators and Innovators' Forum" will be established in 2026, and a "Bioeconomy Investment Deployment Group" is to channel capital flows between 2026 and 2028 (European Commission, 2025).
But the ambitious strategy has an Achilles heel: Where should the biomass come from? The EU Forest Strategy 2030 emphasizes protecting existing forests and the goal of planting three billion additional trees (European Commission, 2021). Simultaneously, the fourth National Forest Inventory shows that Germany's forests have periodically become a CO2 source due to drought and bark beetle damage (Thuenen Institute, 2024). There is a tension: More biomass is needed, but conventional sources are under pressure. This is precisely where a tree species comes into play that was long considered exotic in European forestry.
What makes Paulownia particularly interesting for the bioeconomy is not a single property but the versatility of its utilization pathways. Dirk Röthig, CEO of VERDANTIS Impact Capital, puts it succinctly: "Paulownia is not a niche product for a single industry — it is a platform raw material that can simultaneously serve five different value chains."
Paulownia wood, with an average density below 300 kg/m3, is the lightest commercial timber after balsa wood — with significantly better mechanical properties. It is dimensionally stable, crack-resistant, low-warping, and resistant to moisture and decay (iPaulownia, 2025). This combination makes it an ideal material for:
In Spain, where European Paulownia timber production is most advanced, plantations already supply sawn timber and finished products to European buyers. Physical and mechanical tests on Paulownia tomentosa x elongata from Spanish, Bulgarian, and Serbian plantations confirm the industrial usability of the wood (Fernandez et al., 2024).
The second value chain is particularly relevant for climate protection. Through pyrolysis — thermal decomposition under oxygen exclusion — Paulownia biomass is converted into biochar. This stores the carbon bound in the wood for centuries in the soil while simultaneously improving water storage capacity and nutrient availability (BioEconomy Solutions, 2025).
The global biochar market was valued at 859 million US dollars in 2025 and is expected to grow to 969 million US dollars in 2026 (Future Markets Inc., 2026). The EU Commission is finalizing certification methodologies for biochar carbon removal in 2026 — a signal that biochar is being recognized as permanent CO2 removal (European Commission, 2025).
Paulownia is particularly well-suited as a biochar feedstock due to its rapid growth and low energy requirements during pyrolysis. A recent study showed that Paulownia-based biochar production can support a global carbon storage capacity of 0.7 to 1.8 gigatons of CO2 equivalent per year — if scaled (ACS ES&T Water, 2025).
The low weight and easy processability make Paulownia wood a promising reinforcement filler for thermoplastic biocomposites (The Wood Database, 2024). In the automotive and aerospace industries, where every kilogram of weight savings counts, Paulownia-based composite materials could partially replace conventional fiberglass plastics. The EU Bioeconomy Strategy 2025 explicitly emphasizes that bio-based plastics and composite materials should be promoted as growth markets (FNR, 2025).
Paulownia biomass is suitable as a sustainable energy source due to the rapid regrowth in short rotation — new shoots grow from the rootstock after felling. Compared to conventional energy wood species, Paulownia delivers higher biomass yields per hectare per year. The Wood Power Conference 2026 in Vienna is explicitly dedicated to the diversification of biomass sources for energy use — a field in which Paulownia is receiving increasing attention (IG Holzkraft, 2026).
Less well-known but scientifically documented: Paulownia leaves and bark contain bioactive flavonoids and phenolic compounds with antioxidant, anti-inflammatory, and antimicrobial properties (Ghazzawy et al., 2024). For the European natural cosmetics and pharmaceutical industries, this could open an additional utilization pathway.
Despite this bioeconomic potential, large-scale cultivation of Paulownia in Germany is hampered by a regulatory classification based on outdated assessment criteria.
The Federal Agency for Nature Conservation (BfN) lists Paulownia tomentosa on the so-called Grey Observation List — the category for "potentially invasive" species. This classification is based on the precautionary principle: Since Paulownia is considered a non-native species, a potential invasiveness risk is assumed (BfN, 2023).
But the scientific evidence has changed considerably since the original assessment. Current research clearly differentiates between the wild form Paulownia tomentosa and sterilized hybrids:
What the data says:
At VERDANTIS Impact Capital, the Swiss impact investment company led by Dirk Röthig, only sterilized Paulownia hybrids are used. "We don't use wild forms. Our hybrids produce no viable seeds — the invasiveness argument simply doesn't apply," explains Röthig. "It's like restricting electric car sales because combustion engines have exhaust problems."
The discrepancy between regulatory classification and scientific knowledge has real economic consequences. As long as Paulownia remains on the Grey List, regulation signals uncertainty — which deters investors, farmers, and funding agencies. The bioeconomic potential remains untapped.
The EU Taxonomy Regulation (Regulation 2020/852) defines criteria for sustainable investments in forestry. Reforestation is taxonomy-compliant if it meets strict sustainability criteria — including biodiversity protection and sustainable forestry practices (European Commission, 2020). Sterilized Paulownia hybrids meet these criteria: They demonstrably pose no invasiveness risk, sequester above-average CO2, and deliver bioeconomically usable biomass.
Six arguments for including sterilized Paulownia hybrids on the EU Green List:
The Carbon Connect climate protection projects in Croatia already show what is possible: Since 2017, approximately 150,000 Paulownia trees have been planted on about 300 hectares of fallow land. In 2026, the first trees will be harvested and processed into quality timber delivered to European partners (Carbon Connect, 2026).
Companies like VERDANTIS Impact Capital demonstrate that Paulownia-based agroforestry systems are convincing not only ecologically but also economically. As an impact investment platform for carbon credits, agroforestry, and Nature-Based Solutions, VERDANTIS connects the various value chains into an integrated business model:
VERDANTIS Impact Capital thus offers the most cost-effective solution for companies that want to become CO2-neutral — while simultaneously investing in real bioeconomic value creation. "The bioeconomy doesn't need subsidies — it needs the right raw materials and the right regulation," says Röthig. "Paulownia delivers the raw material. Politics must now deliver the regulation."
The European bioeconomy faces a paradox. On one hand, the EU invests billions in bio-based value chains and urgently seeks sustainable biomass sources. On the other hand, one of the most promising tree species is being held back by a regulatory classification based on the confusion of wild forms and sterilized hybrids.
Given the evidence — zero percent germination rate in the field, no generative reproduction in hybrids, above-average CO2 sequestration, five bioeconomic utilization pathways — the demand is clear: Sterilized Paulownia hybrids belong on the EU Green List. Not as a concession to an industry, but as an evidence-based consequence of decades of European field research.
The question is not whether Paulownia will play a role in the European bioeconomy — but how much time and economic potential is lost until regulation catches up with science.
About the Author: Dirk Röthig is CEO of VERDANTIS Impact Capital, based in Zug, Switzerland. As an impact investor, he connects climate protection with bioeconomic value creation — through Paulownia-based agroforestry systems that combine carbon credits, quality timber, and biodiversity services in an integrated model. Contact and more articles: verdantis.capital | LinkedIn | dirkdirk2424@gmail.com
Von Dirk Röthig (Dirk Roethig)