Subject. This article discusses the timber industry complex of the Russian Federation in the context of the transition to a closed-cycle economy model. Objectives. The study aims to analyze the current state of the timber industry, and identify key barriers to its sustainable growth. Methods. For the study, we used the methods of comparative and statistical analyses, systematization and classification. Results. The article substantiates the role of environmental innovations as a fundamental tool for the modernization of industrial production, and presents an analysis of cost dynamics and actual development indicators in comparison with the targets of the State strategy for the development of the timber industry until 2030. Conclusions. The authors propose an ecosystem approach for the formation of closed value creation cycles. The transformation of waste into secondary resources can ensure the achievement of technological sovereignty and environmental well-being of Russia. The research results can be helpful in the field of industrial economics and industrial enterprises.
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