The world’s political and economic decisions are increasingly determined by resource and energy scarcity and by climate change. In these circumstances, a balance must be achieved between economics, ecology and social welfare, which was put forward at the end of the 20th century and has been irrevocably linked to forestry ever since. It is essential that the forest sector is placed at the centre of the developing bio-based economy. The value of the forest for mankind and the environment is irrefutable, and the value of the multitude of products made of wood is of great importance, socially, economically and environmentally. Over the last fifty years, sawn timber in particular has largely disappeared from many technological applications diminishing its contribution to sustainability in the one area where it could be most significant: as a substitute for energy-intensive materials (e.g., in the built environment). However, there is currently a resurgence of interest in timber products due to the environmental benefits they provide, a phenomenon that other industrial sectors are well aware of. This paper discusses the role of thermal wood processing in a sustainability of resource utilization context and what thermal wood processing should achieve to contribute to the European low-carbon economy.