As awareness of climate and environment issues increases and consumption habits change, new opportunities are opening up for the forest industry and wood construction to develop functional green solutions to meet consumers’ needs. Wood is a versatile raw material and the only renewable construction material. The manufacture of wood products and structures consumes little energy in comparison to similar products and structures made of other materials. Unlike other materials, most of the energy needed to manufacture wood products is derived from renewable energy sources. The global timber sector currently faces the dual challenges of meeting the growing demand of quality timber products and minimising possible adverse impacts on the environment and human health. Major sources of environmental impacts occur throughout the wood supply chain from sawmills to final products. The major objective of this paper is to explore ways to reduce the environmental impacts of timber products, from sawmills to final products. The specific objectives include the identification of major sources and mechanisms of environmental impacts from timber products, the assessment of the status of energy consumption and GHG emission in wood products during timber processing and manufacturing as well as identifying the potential ways to minimize these environmental impacts.