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Due to the emerging importance of sustainable use of natural resources, and policies requiring actions towards sustainable development, there is a demand for methodologies and tools that are able to address these new challenges. In this paper, an approach to assess sustainability impacts of alternative production chains of the forest sector is presented. The approach, which is designed for both public and private decision-makers, describes the forest sector as a set of processes by which forest resources are used to (1) produce biomass which is routed through different value-adding production chains and converted to products and (2) provide other ecosystem services. It is suggested that each production process included in a production chain will be characterised by a set of indicators covering environmental, economic and social aspects of sustainable development. The approach is demonstrated by a numerical example, in which the indicator values are determined based on the volume of wood material flowing through the processes. Sustainability impacts of policy scenarios or technological changes result from changing from one production chain to another; the impacts accumulate along the production chains. Combined cost-benefit and multi-criteria analyses are proposed to evaluate overall impacts and to compare alternative chains.

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