EOS Annual Report 2018 2019 PDF

2018
2019
Annual Report of
the European
Sawmill Industry
“A sustainable European bioeconomy is necessary to build a carbon neutral future in line with the Climate
objectives of the Paris Agreement. In the construction sector engineered wood offers great environmental benefits
as well as excellent economic opportunities.”
European Commission, A sustainable Bioeconomy for Europe: Strengthening the connection between economy, society and the environment. COM(2018) 673 final
Mjøstårnet – completed in March 2019 – by Voll Arkitekter in
Brumunddal, Norway, is the world’s tallest timber building. The
85.4 m high multi-functional tower was built using glued laminated
timber (glulam).
Timber specialist Moelven Limtre installed the building’s timber
structure, including elevator shafts made from CLT and load bearing
structure made entirely from glulam and produced locally.
Moelven is a member of the EOS Norwegian Member Treindustrien.
Picture: Courtesy of Moelven
Annual Report of
the European
Sawmill Industry
2018/2019
EOS ANNUAL REPORT 2018 - 2019
Contents
FOREWORD 5
1. GENERAL ECONOMIC SITUATION 7
2. THE WOODWORKING INDUSTRY IN THE EUROPEAN UNION (EU-28) 17
3. ECONOMIC OVERVIEW OF THE WOOD MARKETS 31

3.1. WOOD RAW MATERIALS 31
3.2. SAWN SOFTWOOD 37
3.3. SAWN HARDWOOD 43
3.4. WOOD ENERGY MARKET 48
SPECIAL FOCUS: CHINA AND EAST ASIA, Jenny Wessung, Woodstat AB 51
4. MAIN RESULTS FROM THE EOS MARKET SURVEY – APRIL 2019 62

4.1. GENERAL INFORMATION ABOUT THE TIMBER MARKET 62
4.2. OVERVIEW OF THE SAWN SOFTWOOD MARKET 64
4.3. OVERVIEW OF THE SAWN HARDWOOD MARKET 68
4.4. FOCUS ON BY-PRODUCTS 71
4.5. EOS COUNTRY REPORTS 72
AUSTRIA 72
BELGIUM 75
DENMARK 77
FINLAND 78
FRANCE 81
GERMANY 83
ITALY 90
LATVIA 91
NORWAY 93
ROMANIA 95
SWEDEN 97
SWITZERLAND 100
UNITED KINGDOM 102
SPECIAL FOCUS: The European Parquet Market - Challenges & Opportunities, Isabelle Brose, FEP 104
5. THE CONSTRUCTION INDUSTRY IN EUROPE 108
125
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6. EOS ADVOCACY ACTIONS AND RELEVANT EU POLICIES INFORMATION 127

6.1 THE CLUB DU BOIS 128
6.2 WOOD DUST: REVISION OF THE CARCINOGENS AND MUTAGENS DIRECTIVE (2004/37/EC) 133
6.3 CLIMATE CHANGE AND ENERGY POLICIES 134
6.4 SUSTAINABLE FINANCE 146
6.5 COFO24, THE WORLD FOREST WEEK IN ROME, JULY 2018 154
6.6 INITIATIVE REPORT ON EUROPE’S WOODWORKING COMPETITIVENESS STRATEGY BY THE EUROPEAN ECONOMIC
AND SOCIAL COMMITTEE 155
6.7 FORESTRY’S ASPECTS 158
6.8 THE FOREST CITY PROJECT 2019 172
6.9 BIOECONOMY 178
6.10 EUROPEAN RAW MATERIALS WEEK 2018 185
6.11 THE EUROPEAN TRADE POLICY 188
7. HIGH LEVEL CONFERENCES CO-ORGANIZED BY EOS 201

7.1 INTERNATIONAL SOFTWOOD CONFERENCE 201
7.2 INTERNATIONAL HARDWOOD CONFERENCE 214
8. EUROPEAN STANDARDISATION – UP TO DATE 215
Indufor – Forest Industry & Bio Solutions Services
Biomass / Log Sourcing & Wood Supply Plans Business Strategies

Site suitability for forest plantation and biomass Pre-feasibility / feasibility studies
species and varieties Business plans
Potential and realistic supply availability in Market supply, demand and trade assessments –
biomass / log supply baskets market entry solutions
Developing supply models and assessing End use segment and client identification studies
associated cost structures
Sustainable Finance
Due Diligence and M&A Green Bonds verification
Purchaser and vendor due diligence
Valuations
Mergers and acquisitions
Helsinki, Finland – Auckland, New Zealand – Melbourne, Australia – Washington D.C., USA – Beijing, China
www.induforgroup.com
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Foreword
by Sampsa J. Auvinen, EOS President
PROMOTING SUSTAINABLE WOOD

FOR A SUSTAINABLE FUTURE
Between the 22nd and 25th of May, the citizens of the Europe and this is increasing demand for our products.
European Union had the opportunity to vote for their Overseas markets have been for some time important for
representatives in the European Parliament and shaping the European sawmills and they have a profound impact
the future of Europe. From this moment, a whole chain- on our industry and its future. Past few years new Asian
reaction of events will be triggered. This will reach its markets have grown and also the United States market
climax in November when a new Commission enters has come back to pre-crisis level. Nevertheless, as the
office. This new political set-up will govern Europe for global sawn timber supply - demand balance remains
the next five years. During the second semester of 2019, sensitive, the recent storms and beetle damages in
the new Members of the European Parliament, 27 new Central Europe are affecting the markets. Going forward
European Commissioners and the new European Council the industry will have to be ready to react locally but
President will be appointed and frame the new political act globally to the market disturbances the weather
priorities that will be translated into political actions and anomalies create.
legislation through an active participation of interested
stakeholders. The European Organisation of the Sawmill At EOS, we are very satisfied that on 1st February 2019,
Industry is one of the many Brussels-based organisations the EU and Japan’s Economic Partnership Agreement
voicing the concerns of the manufacturing sector in entered into force. Japan is European sawmill industries’
Europe and striving for an industry-oriented Europe able long standing and important market and now tariffs on all
to compete on a global level playing field. In doing so, wood products will be progressively fully eliminated, with
EOS actively participates in the European consultations seven years staging for the most important priorities. Most
and working groups; it is one of the organisers of the Club tariffs on wood products will be dropped immediately,
du Bois - cross-party discussion forums aiming to create with some less important tariff lines being scrapped after
a sustained dialogue with Members of the European 10 years. Traditionally, Japan has a high propensity to
Parliament on all EU legislative issues affecting the use wood as a building material. Wooden housing starts
sector in Europe - and it regularly consults its Members. in Japan hover around 55-58% of total housing starts (for
Adopting its position papers and visions on unanimous comparison, precise figures for Europe are missing, but
basis, EOS has been and continues to be the voice of the estimates suggest that wooden housing starts make up
sawmill Industry in Europe. around 10% of total housing starts). Together with Egypt,
China, and the United States, Japan is the largest extra-
The past year has been favorable to our industry in many European market for the European sawmill industry as
levels; demand has been strong in all major markets, regards traditional sawn timber products. Japan is also an
production volumes have developed positively with important importer of engineered wood-products such as
available raw material and the industry has started to cross laminated timber and glue laminated timber.
invest in improving efficiencies. Building from wood
particularly with new engineered wood products is The European Union plays a growing role in many areas
growing across the globe and also at our home market in affecting the building sector and in the perception of
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© Shutterstock
wooden materials. This is why EOS actively participates development. EOS advocates for European policies
in all EU discussions and policy areas that might open that balance environmental, social and economic
opportunities to boost the competitiveness of the aspects. Sustainably managed forests and products
sawmill industries and reinforce the recognition of wood derived from these forests play an essential role in
as an environmentally-friendly building material. mitigating climate change by reducing greenhouse gases
emissions and contribute to an environmental-friendly
Unlike other building materials which generate a large economic growth. The positive effects of using wood
amount of carbon dioxide during production, wood from sustainably managed forests can be strengthened
sequesters the carbon dioxide absorbed during growth if actions are taken to use more long-life wood products.
even after it has been turned into lumber. Among the For this reason, on the 21st of March 2019 our organisation
major construction materials, wood provides the lowest celebrated the International Forest Day by co-hosting
life-cycle impact, and architects and engineers have a high-level discussion where representatives of the
increasingly turned their attention to using it to lessen industry and of green interests confirmed together their
the environmental burdens associated with the building commitment to identifying solutions for a sustainable
sector. Our Organisation warmly welcomed the recent and environmentally-friendly economic growth.
update of the EU Bio-economy Strategy, where it is
emphasised that a greater use of wood in the construction EOS is engaged together with all its Members in the
industry as a substitute for more energy-intensive non- European dialogue to achieve a sustainable bio-based
renewable building materials plays an important role in and environmentally-friendly future. To all the Members
developing the bio-economy. of the European Organisation of the Sawmill Industry,
I express gratitude for the continued support and
EOS strongly believes that the European policy should collaboration.
not disregard the 2015 Paris Agreement on climate
change objectives. To accomplish these goals by 2050,
the European legislation should be oriented to favour
sustainable products that contribute to decarbonise the Sampsa J. Auvinen
economy and at the same time comply with the circular
economy objectives. The European sawmill industry
recognise that it is imperative to combat climate change
and at the same time avoid curbing economic and social EOS President
6
1. General Economic Situation

The information of this chapter has been taken from the European Commission Economic Forecast Winter 2019 and from
OECD (Organisation for Economic Co-operation and Development) Economic Outlooks
1.1 Global Overview with focus on the EU

1.1.1 Global Growth Slows Amid High Uncertainty exporters such as Russia and the OPEC.
The global economy is slowing down following a period
of sustained above-potential growth in many major For 2019 and 2020, global import growth (excluding the
economies. Global growth moderated to 0.8% quarter-on- EU) is likely to moderate to 3.9% and 3.6% respectively,
quarter (henceforth q-o-q) in the third quarter of 2018 (from reflecting unresolved trade tensions as well as indications of
0.9% q-o-q in the second quarter) and continued to vary declining global manufacturing output and, more broadly,
across countries and regions. Activity in some advanced the rising uncertainty over global growth in the medium-
economies was weaker than expected, especially in the euro term. On the positive side, trade agreements that entered
area and Japan, and signs of a slowdown in China became into force recently such as the bilateral agreement between
more apparent. On the other hand, economic growth in the the EU and Japan or the Comprehensive and Progressive
US, India and emerging Asia remained solid. High frequency Agreement for Trans-Pacific Partnership (CPTPP) should
indicators paint a mixed picture of the global growth support global trade
outlook in the short term, with robust global services PMI
(purchasing managers index) readings on the one hand and 1.1.2 Financial Markets Continue to Adjust Amid
a downward trend in global manufacturing output on the High Volatility
other. Global GDP (excluding the EU) is estimated to While monetary policy normalisation in the US went on
have grown by 3.9% in 2018, 0.1 percentage points lower last year, expectations of further tightening have been
than projected at the end of 2018. significantly fading in recent months. The US Federal
Reserve raised the target range for the Fed funds rate to
The US economy is expected to grow above potential 2.25%-2.50% in December 2018, tightening its policy rate for
in 2019 on the back of a buoyant labour market and fiscal the fourth time in a year. In January, the US Federal Reserve
stimulus. However, the political gridlock in Congress that kept its Fed funds rate unchanged and took a more dovish
brought the government to a partial shutdown for more tone on the path of interest rates and showed willingness to
than a month is expected to weigh on consumer sentiment slow the unwinding of its balance sheet.
and growth in the beginning of the year. In 2020, the pace of Market-implied policy rate expectations have moved
growth is set to moderate as support from macroeconomic lower, suggesting that no additional interest rate hikes are
policies fades. In China, recent data confirm a loss of expected in the US in 2019.
growth momentum, with uncertainty about the outcome
of US-China trade negotiations (at this writing in April In the euro area, the ECB’s monetary policy has remained
2019, it is impossible to predict the outcome of these talks) highly accommodative. While the ECB decided to end its
and about the effectiveness of domestic policy stimulus net asset purchases in December 2018, significant monetary
weighing on the short-term outlook. The Chinese economy policy stimulus was still considered necessary to support
is thus expected to continue cooling, amid moderating the further build-up of domestic price pressures and
consumption growth, weaker export growth and a slowdown inflation over the medium term. The necessary degree of
in the property sector. Economic activity in other emerging monetary accommodation will be provided by the forward
market economies is expected to remain differentiated. guidance on the ECB policy rates and the reinvestments of
Growth in Latin America and South Africa is expected to the sizeable stock of acquired assets going forward. Thus,
pick up following a weak 2018, while the decline in oil key ECB interest rates are expected to remain at their
prices since the autumn has worsened prospects for oil present levels at least through the summer of 2019.
7
Also, the nature of the ECB’s forward guidance, which is both Much of the euro area’s loss of growth momentum
data and state-dependent, should help provide additional can be attributed to fading support from the external
accommodation if necessary (i.e. should the economic environment, including slower global trade growth and
outlook worsen in the euro area). high uncertainty regarding trade policies. However, there
have also been a number of domestic factors at play. The
Global financial market prices have shown high volatility European manufacturing sector has suffered from some
over the last few months, reflecting evolving perceptions specific factors. Car production was significantly disrupted
of the mix of data and policy news. Market sentiment has in the third quarter. During the last quarter of the year,
been soured by concerns about global growth in a context economic activity remained weak amid social tensions and
of high indebtedness, trade tensions and policy uncertainty. budgetary-policy uncertainty in some Member States, while
On the back of the re-assessment of the underlying global car production only partially recovered. Euro area industrial
economic outlook and more dovish messages from key production, however, was weak in 2018 and dropped
central banks, investors shifted from riskier assets to safer sharply across sectors at the end of the year. As a result, the
ones, driving equity markets and sovereign bond yields weakness of economic growth in the second half of 2018
lower. The volatility in asset prices notwithstanding, cannot entirely be blamed on sector-specific or temporary
financing conditions have remained very benign overall. factors.
Lending flows to households and nonfinancial corporations For the year 2018 as a whole, GDP is estimated to have
(NFCs) in the euro area have been robust. The annual growth grown by 1.9% in both the euro area and the EU.
rate of loans to non-financial corporations stood at 4.0% in
December 2018, while that to households stood at 3.3%. Private consumption in the euro area lost some momentum
Overall, households and NFCs are expected to continue to in 2018-Q3 when its pace of growth slipped to 0.1%
benefit from supportive financing conditions in 2019 and from 0.2% in the previous quarter. This reflects slower
2020. Also, the euro area corporate sector continues to run employment creation, a decrease in consumer confidence,
funding surpluses generating sizeable internal funds, which and an uptick in the saving rate. The slowdown of private
could be used to finance investment. consumption was, however, not broad-based across the
largest economies. While private consumption contracted
1.1.3 The Expansion Loses Steam in both Germany and Italy in the third quarter, it rebounded
The euro area economy finished 2018 on a weak in France, Spain and the Netherlands following a soft patch
footing, having failed to rebound from the drop in in the previous quarter.
growth over the summer. As a result, euro area and EU Investment weakened in the euro area in 2018-Q3 (from
GDP growth in the second half of last year turned out lower 1.6% q-o-q in 2018-Q2 to 0.7%), mainly as a result of a
than expected in autumn 2018. sharp drop in non-construction investment in Italy, a fall in
construction spending in the Netherlands, and a slowdown
After four quarters of 0.7% (q-o-q) GDP growth in 2017, in both France and Spain
growth moderated to 0.4% in the first two quarters of 2018.
The slowdown intensified in 2018-Q3, with GDP expanding Euro area export growth weakened throughout 2018.
by 0.2% in the euro area. In the EU, GDP expanded by Given the geographical orientation of external trade and
0.3% in the third quarter compared to 0.5% in the second. its product specialisation, the euro area appears to be
While a moderation of growth was already in the cards, the particularly impacted by the softening/deceleration of
slowdown in the second half of 2018 turned out to be more world trade growth. Import growth also slowed, but more
pronounced than expected. In 2018-Q3, Member States gently than exports.
fared quite differently with, most notably, a contraction
of activity in Germany (-0.2%) and Italy (-0.1%). According The recent string of weak hard and survey data
to Eurostat’s preliminary flash estimate for 2018-Q4, euro coupled with the softening of world trade and possibly
area GDP ended the year on a weak note, growing by 0.2% protracted sector- and country-specific weaknesses
(q-o-q) for the second consecutive quarter. Preliminary flash in the euro area suggest that the strong momentum
estimates were available for seven Member States, with only enjoyed throughout 2017 is now behind us. While the
Italy registering a contraction (-0.2%). economy is shifting into a lower gear after having peaked
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in 2017, the fundamentals for continued growth remain in Although a non-escalation of trade disputes is assumed,
place. The European economy continues to benefit from trade policy uncertainty and tensions are expected to
improving labour market conditions, a slightly expansionary weaken global trade growth. The euro area is particularly
fiscal policy stance, and supportive financing conditions, as vulnerable due to its trade openness and the current
the pace of monetary policy normalisation is expected to be tensions are undermining business investment and slowing
very gradual. Over the forecast horizon, growth is projected down the momentum of existing supply chains, with spill-
to continue benefiting from a rotation towards domestic overs to the economy’s long-term growth potential.
growth drivers. While the current weakness in economic
activity is likely to extend into 2019, the growth momentum BREXIT
is expected to be stronger than in the second half of last
year, as some of the temporary factors that weighed on Overall, the growth outlook for this year and next has been
growth during that period should fade. Private consumption revised downwards compared to the autumn. Member
should remain the main growth driver, benefiting from States. GDP is now expected to grow by 1.3% this year in
continued but slower labour market improvements and the euro area (1.5% in the EU). The slowdown should be
a pick-up in wage growth. However, as spending tends especially pronounced in Germany and Italy, the two largest
to be more sensitive to changes in employment than in economies of the EU which are more likely to suffer from
wages, households are expected to become gradually less global trade tensions.
inclined to consume additional labour income. Household
purchasing power is also set to benefit from lower energy 1.1.4 Labour Market Conditions Remain a Bright
prices, while disposable incomes are expected to receive Spot in a Darkening Picture
support from expansionary fiscal measures in a number of The euro area labour market improved further in the first
Member States. These factors, however, may not translate three quarters of 2018. Employment rose by 0.2% q-o-q
into more dynamic consumption patterns in the short term in 2018-Q3, following 0.4% growth in the two preceding
due to waning consumer confidence, which could lead to quarters, implying an annual increase of 1.6%. The number
higher precautionary savings. Investment is set to continue of employed persons has reached the highest level ever
growing faster than GDP this year and next. recorded in the euro area, and is now about 2?% above
the pre-crisis peak observed in the first quarter of 2008.
Business investment should continue to enjoy financing Recently, the strongest increase in employment
conditions that are favourable by historical standards, even has been seen in the construction sector, whereas
accounting for the recent pick-up in the risk premium. High employment creation in manufacturing has come to a
capacity utilisation rates in manufacturing and tight supply standstill.
conditions in some Member States should also support Despite this overall positive development in the euro area,
business investment. Pressure from high labour utilisation the total number of hours worked in the economy remains
rates can also be expected to encourage firms to invest, below its pre-crisis level (by about 1% as compared to the
smoothing the impact of more binding supply constraints, first quarter of 2008) despite continuing to rise in line with
with positive effects on productivity growth. Moreover, job creation. This reflects the change in the composition
the Investment Plan for Europe is expected to continue to of employment towards a higher share of part-time
boost investment through improved access to financing. At employment.
the same time, residential investment should find support In December 2018, the unemployment rate in the euro
from the continued dynamism in real house prices and area stood at 7.9%, its lowest level since October 2008.
positive income prospects. The impact of these supportive Unemployment continues to fall by more than the growth
factors, however, is likely to be partly offset by rising supply rate of the economy would suggest. In recent years, labour
hindrances, particularly in the construction sector and the market conditions have improved across all Member States.
end of targeted fiscal incentives in some Member States.
Weaker sentiment, mounting uncertainty regarding At the same time, there are signs of labour shortages
the global outlook and lower demand growth are likely in some Member States and sectors, implying that
to weaken the impetus for investment, particularly in employment growth in these economies will moderate.
export-oriented sectors and countries.
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1.1.5 Energy Prices Drive Inflation Lower Core inflation – which excludes energy and unprocessed
After standing above 2% in the third quarter of 2018, food prices – remained muted with no discernible trend
headline inflation in the euro area dropped considerably in in 2018. The forecast for headline inflation in the euro area
December to 1.6%, in line with movements in global energy this year is revised lower compared to autumn mainly due
prices. Energy price inflation went down from a high of 10.7% to lower technical assumptions about the future price of oil
in October to 5.5% in December. Besides energy, inflation and the resulting base effects. As a result, headline inflation
of food components also fell throughout the fourth quarter is projected to follow a downward path in 2019 and to pick
compared to the previous quarter. Headline inflation in up very gradually in 2020. On average, inflation is forecast
the euro area averaged 1.9% in the fourth quarter of 2018, to moderate to 1.4% in 2019.
slightly below what was expected in autumn. For the year as
a whole, euro area inflation averaged 1.7% in 2018.
1.2 Japan1
Economic growth is projected to remain around 1% in 2018- in services. The unemployment rate is around 2? per cent,
19, as record-high corporate profits and labour shortages drive while the ratio of job openings to applicants has risen to its
business investment. In addition, stronger wage gains will highest level since 1974. Wage growth has been sustained by
support a pick-up in private consumption in 2019. Although an 8.6% rise in summer bonuses in 2018 in large firms and
the October 2019 consumption tax hike will temporarily reduce by tax incentives, thereby supporting private consumption.
demand, growth is projected to resume in early 2020, buoyed Labour shortages, combined with capacity shortages
by additional government spending and the 2020 Olympic and the record high level of corporate profits in 2018, is
Games in Tokyo. Sustained growth, combined with higher oil stimulating business investment.
prices, is expected to boost inflation to 1? per cent (excluding Japan’s gross general government debt has risen to 226%
the impact of the consumption tax hike) in 2020. Government of GDP. With a primary deficit of around 3% of GDP in 2018,
debt relative to GDP, which is the highest ever recorded in the the target of a primary surplus has been pushed back
OECD area, poses serious risks. Achieving fiscal sustainability from 2020 to 2025. However, large-scale government bond
requires a detailed consolidation programme that includes purchases by the Bank of Japan, which now owns 45% of
gradual hikes in the consumption tax, beginning with the the outstanding stock of government bonds, has mitigated
planned increase in 2019, and measures to control spending the impact of high government debt.
in the face of rapid population ageing. With the working-
age population declining, additional policies to sustain Output growth is projected to remain around 1%, in line with
employment and structural reforms to boost productivity Japan’s potential rate, in 2018-19 before slowing to 0.7% in
are a priority. Monetary policy needs to remain expansionary 2020 following the 2019 tax hike. However, the impact of the
until the 2% inflation target is achieved. consumption tax rise will be temporary and partially offset
by planned fiscal measures. Growth depends significantly
Growth has been led by private consumption and business on wage developments. While the jump in bonus payments
investment. The accelerating decline in the working-age in 2018 is a positive sign, larger increases in basic wages are
population is exacerbating labour shortages, particularly important to sustain private consumption.
1.3 China2
After having held up well into 2018, growth has recently slowdown include the weakening of industrial production,
weakened and is projected to decline in 2019-20. Signs of profits and revenues. Foreign trade flows will lose some
1 The information in this chapter has been taken from the OECD Economic Forecast for Japan
2 The information in this chapter has been taken from the OECD Economic Forecast for China
10
momentum following the escalation of trade tensions. expanding steadily, especially in the digital and sharing
The slowdown of activity also reflects the cutback of economies. Monetary policy was tightened somewhat
infrastructure investment, as local government debt has by the restrictions put on shadow banking, which were
been subject to greater scrutiny, though it could rebound necessary to maintain financial stability. Going forward,
following the recent acceleration of debt issuance and moderate easing of monetary policy is envisaged to reduce
announcement of new projects. the debt burden.
Monetary conditions are now being eased to support Growth is projected to slow modestly, which will ease
economic activity. The escalation of trade tensions, producer price inflation. Goods exports and imports will slow
particularly with the United States, resulted in a fall of somewhat, though import tariff cuts recently introduced by
the exchange rate, which was halted by government China and an increased VAT refund on exported products
interventions, and a decline in stock prices. Fiscal policy will mitigate the impact of trade tensions. In processing
will remain supportive to counteract the weakening of industries, where the share of intermediate inputs is high
growth. Government spending efficiency will benefit from and value-added is low, this will significantly strengthen
newly introduced comprehensive performance budgeting, competitiveness. Reining in shadow banking would enhance
but capital allocation efficiency needs to be improved by financial stability and transparency, but may cause funding
gradually removing implicit guarantees to state-owned difficulties for smaller firms. Acceleration in corporate
enterprises and other government entities. Measures deleveraging is necessary to restore balance sheets amid
introduced recently to lower average tariffs are welcome rising debt service costs. Slow deleveraging would result in
and should continue alongside further easing of the stronger growth in the short term, but increases imbalances
operation of foreign companies. Overall, the economy has later. A weaker fiscal stimulus might adversely affect
remained relatively unscathed by rising global uncertainties. growth, but would reduce the risk of a further build-up of
Uncertainty is high, though. implicit government liabilities. Infrastructure investment is
mainly financed by public funds, but only partly from the
Domestic demand, in particular consumption, has budget, thereby reducing transparency. Trade frictions may
remained robust and will continue to be a stable driver of disproportionately affect smaller firms that are less able to
growth thanks to rising disposable incomes. Infrastructure squeeze profit margins to accommodate the tariff hikes and
investment has slowed following restrictions imposed on some geographical regions that are more reliant on exports
shadow banking, a major source of infrastructure financing. for their growth. The exchange rate may again depreciate,
Excess capacity still plagues a number of industrial sectors, which will provide some cushion against export restrictions
weighing on business investment. Services, in contrast, are
1.4 Russia3
Growth is projected to remain robust, as private consumption Unemployment will increase as employment demand will
will benefit from rising wages, household credit and only partly match higher labour supply following the rise of
employment, the latter following a bold pension reform. the retirement age. Monetary policy should be tightened in
Large infrastructure projects will boost both public and response to upward-trending inflation expectations. Despite
private investment. The VAT increase in early 2019 will dent a strong increase in public spending, fiscal policy remains
growth temporarily as disposable incomes fall. Export growth tight to rebuild the fiscal position, increasing the room to
will decline as foreign demand weakens, while imports will respond in event of a future shock. More targeted public
rebound in 2020. A weaker rouble and the VAT increase will spending, in particular a rise in minimum pensions, could
raise inflation temporarily above the 4% target. mitigate the impact of higher VAT on income inequality.
Structural reforms to improve the business environment
would boost longer-term growth.
3 The information in this chapter has been taken from the OECD Economic Forecast for Russia
11
Growth is picking up, supported by private consumption, as accelerate the digitalisation of the economy, deepen
real disposable incomes are increasing after several years of financial markets and complement the pay-as-you-go
gradual decline. Rising consumer and mortgage credit also pension system with a system based on capitalisation.
sustain consumption. Higher oil prices are driving export The economy is projected to grow by 1.5% in 2019 and 1.8%
revenues, while growing uncertainty about future sanctions in 2020, driven by a boost to household consumption from
and the higher cost of funding for emerging markets are higher real wages and by public investment. Exports will
reducing investment growth and imports of capital goods. slow as oil prices are no longer rising. The current account
The rouble depreciated in April 2018 and August 2018 amid will remain in surplus. The VAT hike, tighter monetary policy
expectations of potential new sanctions, and capital moved and more moderate household credit growth will dent
abroad upon turmoil in emerging markets. growth in 2019 temporarily. However, the pension reform
and the infrastructure programme will help boost growth
The government has adopted an ambitious investment in 2020. Substantial uncertainty remains about future
programme for the years 2019-2024, aimed at increasing sanctions and counter-sanctions, which could dent exports
the share of investment in GDP from 21% to 25%. The and trigger a new wave of capital outflows and further
programme should help improve transport infrastructure, rouble depreciation.
1.5 USA4
Growth is projected to slow in the coming two years as
macroeconomic policy becomes less supportive. While
employment growth slows, consumption growth remains
solid, supported by wage growth picking up as the labour
market tightens further. Strong business investment in
2019 and 2020 is underpinned by the recent tax reform
and supportive financial conditions. A weaker global
outlook and already introduced trade measures weigh on
activity. The large fiscal stimulus enacted in 2017 and 2018
is continuing, albeit more weakly, in 2019; the budget will
© Shutterstock
have a broadly neutral impact on activity in 2020. Monetary
policy will tighten to ensure that inflation remains near
the target of 2% and that inflation expectations stay well
anchored. Further restraints on imports should be avoided place, but no additional actions are taken. The existing
as this would weaken domestic growth. measures have a small upward impact on inflation and
create a small drag on growth. At this writing (beginning
The long expansion has largely eliminated the remaining of 2019), there remains huge uncertainty regarding the
pockets of slack in the labour market and capacity utilisation outcome of the trade tensions.
is rising. With strong job creation and demographic pressures
arising from an ageing population, labour shortages are As the fiscal boost fades and monetary policy tightens,
beginning to emerge. growth will slow. Against a backdrop of weakening external
demand, export growth is projected to remain muted. The
Trade growth has recovered from the past appreciation trade deficit widens as import demand remains strong
of the dollar, but the outlook is uncertain as external due to strong investment growth, notwithstanding the
demand is weak and the possibility exists of further trade introduction of tariffs. These developments coupled with
measures being introduced. In these projections, already a decline in national saving due to the fiscal loosening will
implemented tariff measures are assumed to remain in contribute to a rising current account deficit.
4 The information in this chapter has been taken from the OECD Economic Forecast for the United States
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© Shutterstock
1.6 Exchange Rates
The exchange rate between two currencies is an important In the figures below, we provide the exchange rate of the
driver of trade. Other things being equal, a strong currency EUR vs various currencies over the last two years (data
in country A (relative to trade partners) will favour importers updated in April 2019).
of country A, while a weak currency in country A will favour
exporters of country A. The euro vis-à-vis the US dollar has appreciated in 2017 and
Exchange rate fluctuations thus affect trade and industries, remained overall stable at the beginning of 2018. Over the
and the European sawmill industry is no exception to this. It last year it has slightly depreciated. On March 30, 2019 EUR
is therefore useful to include an overview of exchange rates 1 = USD 1.1235 (the EUR was at its strongest over the last two
in this chapter. years in Feb 2018, when EUR 1 = USD 1.25)
Fig. 1.1 EUR vs USD, April 2017 – April 2019
Source: European Central Bank, 2019
Overall, considering the Brexit-related instability, the EUR-GBP exchange rate has not been dramatically affected in 2018.
Since the beginning of 2019, the GBP has been appreciating vis-à-vis the euro but any outcome of the Brexit process will
probably have a clearer impact on the exchange rate.
13
Fig. 1.2 EUR vs GBP, April 2017 – April 2019
At the beginning of summer 2018 the euro commenced to appreciate against the Chinese yuan, but since a peak of EUR 1=
CNY 8.1 in October 2018 a constant depreciation trend ensued, with EUR 1 = CNY 7.55 at the beginning of April 2019.
Fig. 1.3 EUR vs CNY, April 2017 – April 2019
Over the course of 2018 the euro tended to depreciate against the Japanese Yuan after a peak of EUR 1 = JPY 137 in February
2018. At the beginning of 2019 the euro has been tending to slightly appreciate with the exchange rate at EUR 1 = JPY 124 at
the beginning of April
14
Fig. 1.4 EUR vs JPY, April 2017 – April 2019
The euro has been appreciating against the Swedish krona since summer 2012. Over the last year, however, the weakening of
the SEK seems to have come to a halt. SEK remains historically weak. At the beginning of April, EUR 1 = SEK 10.4
Fig. 1.5 EUR vs SEK, April 2017 – April 2019
As a result of geopolitical tensions, over the last few years the rouble has been very volatile. It remains historically quite weak
vis-à-vis the euro but since the beginning of 2019 a slow appreciation has been taking place. At the beginning of April 2019,
EUR 1 = RUB 72.8
15
Fig. 1.6 EUR vs RUB, April 2017 – April 2019
When the Egyptian authorities stopped controlling the value of the Egyptian pound in November 2016, the pound lost 50%
of its value vs the euro. The euro has kept appreciating until the beginning of 2018 when it reached EUR 1 = EGP 22, but over
the last year the EGP has gained ground: at the beginning of April 2019 EUR 1= EGP 19.5.
Fig. 1.7 EUR vs EGP, April 2017 – April 2019
Source: www.xe.com
Overall, since the beginning of 2019 the euro has been getting weaker vis-à-vis most foreign currencies relevant for the sawmill
industry, with the exception of the Japanese yen. The Swedish and the Russian currencies remain relatively weak. At this
writing (beginning of April 2019), it is impossible to predict the long-term effects of Brexit-related turmoil on the EUR – GBP
exchange rate.
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2. The woodworking industries

in the European Union (EU-28)
2.1 Introduction
Since 1990, NACE (Nomenclature of Economic Activities in corresponding to the nature of goods and services produced
the European Community) provides a harmonised statistical or by the nature of the production process used. Several
classification of economic activities in the EU. Contrary to the small modifications to the classification system were carried
Combined Nomenclature (CN) and the Harmonised System out since 1990. However, in 2007, the system was submitted
(HS), providing a classification according to trade, the NACE to radical changes.
system classifies economic activities in terms of production
Table 2.1: The NACE classification system

NACE Code (new) Definition
16 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials
16.1 Sawmilling and planing of wood
16.2 Manufacture of products of wood, cork, straw and plaiting materials
16.21 Manufacture of veneer sheets and wood-based panels
16.22 Manufacture of assembled parquet floors
16.23 Manufacture of other builders’ carpentry and joinery
16.24 Manufacture of wooden containers
16.29 Manufacture of other products of wood; manufacture of articles of cork, straw and plaiting materials
31 Manufacture of furniture
31.01 Manufacture of shop- and office furniture
31.02 Manufacture of kitchen furniture
31.03 Manufacture of mattresses
31.09 Manufacture of other furniture
Source: Eurostat
It is important to note that the NACE category for wood • densified wood;
and products of wood and cork (NACE 16) consists of two • glue laminated wood, laminated veneer wood.
categories: one for sawmilling and planing of wood (NACE
16.1) and one for the remaining wood products (NACE 16.2). Unfortunately, Eurostat fails to provide up-to-date
Within this last category, the sub-category “Manufacture information on the activities within the woodworking and
of veneer sheets and wood-based panels” (NACE 16.21) the furniture industries in many countries on 3-digit level.
consists of:
• veneer sheets thin enough to be used for veneering, When analysing the figures, one should keep in mind that
making plywood or other purposes: smoothed, dyed, most national statistical systems tend to underestimate
coated, impregnated, reinforced (with paper or fabric the figures for small and medium-sized industrial sectors.
backing) or made in the form of motifs; This is clearly the case for the woodworking industries.
• plywood, veneer panels and similar laminated wood The underestimation is particularly important for the
boards and sheets; employment figures, since the official statistics often
• OSB and other particleboard; only cover enterprises with at least 20 persons employed
• MDF and other fibreboard; whereas the woodworking industries is a typical SME sector.
18
2.2 Production
The total production value of the woodworking industries in again in 2012 and 2013 when it reached again a level below
the European Union (EU) peaked in 2007 at 237 billion EUR the 200 billion EUR threshold. In the 5 years to 2017 the
before falling under 190 billion EUR in 2008 and 2009 as a production value grew every year: altogether it has risen by
result of the global economic crisis. The production value 15% reaching almost 230 billion EUR in 2017.
upturned in 2010 and grew further in 2011 but dropped
Table 2.2: Production in the woodworking industries in million EUR, 2013-2017 (NACE 16 & 31)
Production 2013 2014 2015 2016 2017 17/13 17/16
(excl VAT)
16.1 32,981 35,321 35,490 35,178 36,047 9.3% 2.5%
16.2 79,222 83,149 86,698 86,356 90,075 13.7% 4.3%
Subtotal 16 112,203 118,470 122,188 121,534 126,121 12.4% 3.8%
31 87,733 92,118 97,317 100,454 103,786 18.3% 3.3%
Total 16 + 31 199,935 210,588 219,504 221,988 229,908 15.0% 3.6%
Source: Eurostat
In 2017, the production value of sawmill products (NACE 16.1) (NACE 31) also increased by 3.3%. Over a 5-year period
increased by 2.5%. The value of other woodworking products (2013-2017) all of the three subcategories recorded a good
(NACE 16.2) increased instead by 4.3%. Consequently, the growth, ranging from 9.3% for sawmill products to 18.3% in
value of the woodworking industries stricto sensu (NACE 16) the furniture sectors.
rose by 3.8%. The production value in the furniture sector
Figure 2.1: Production 2017 – Relative importance of the sub-sectors
Source: Eurostat
The share of the furniture sector (NACE 31) was 45.1% while other woodworking industries (NACE 16.2) represented 39.2% of
the production and the sawmilling and planing of wood (NACE 16.1) 15.7%.
19
Production per Country

Figure 2.2: Production 2017 – Relative importance of the EU Member States (NACE 16 and 31)
Source: Eurostat
Within the overall woodworking industries, Germany to 18.7 billion EUR – remarkably it grew by more than 30% in
confirms its leading position thanks to a slightly but the five years to 2017. The fourth largest producing country
constantly increasing production value (+1.2% vs 2016), is the UK with a production value of 18.4 billion EUR (-6.1%
which exceeded 47 billion EUR in 2017. Italy also did well vs 2016), followed by France with 18.1 billion EUR (+1.7%).
with a growth of 2.8% to almost 36 billion EUR in 2017. The
production value of both Germany and Italy grew by around Sweden (+5.6% to 12.2 billion EUR), Spain (+7.8% to 11.9
10% in the 5 years to 2017. Poland keeps outgrowing all of billion EUR) and Austria (+4.5% to 11.4 billion EUR) are also
the big producing countries having grown by 9.5% in 2017 large producing countries.
© Shutterstock
20
Table 2.3: Production value per EU Member State in million EUR, 2013-2017
Production 2013 2014 2015 2016 2017 17/13 17/16
(excl VAT)
Austria 10,288 10,299 10,623 10,956 11,444 11.2% 4.5%
Belgium 5,114 5,291 5,354 5,296 5,728 12.0% 8.2%
Bulgaria 844 898 963 987 1,050 24.4% 6.4%
Croatia 933 1,011 1,086 1,245 1,421 52.2% 14.1%
Cyprus 134 129 128 139 156 16.9% 12.2%
Czech Republic 4,276 4,293 4,538 4,756 5,070 18.6% 6.6%
Denmark 3,193 3,214 3,324 3,438 3,444 7.9% 0.2%
Estonia 1,974 2,198 2,359 2,472 2,701 36.9% 9.3%
Finland 6,502 6,392 6,258 6,554 6,941 6.8% 5.9%
France 17,264 18,556 18,062 17,818 18,120 5.0% 1.7%
Germany 42,643 43,824 45,778 46,620 47,166 10.6% 1.2%
Greece 699 702 716 758 763 9.2% 0.7%
Hungary 1,224 1,327 1,475 1,549 1,685 37.6% 8.7%
Ireland 1,310 1,464 1,503 1,487 1,730 32.1% 16.4%
Italy 32,680 33,093 33,702 34,973 35,939 10.0% 2.8%
Latvia 2,041 2,198 2,196 2,311 2,474 21.2% 7.0%
Lithuania 2,082 2,446 2,527 2,618 2,829 35.9% 8.0%
Luxembourg 209 207 214 216 225 7.9% 4.4%
Malta 51 56 62 63 67 30.5% 6.4%
Poland 14,269 15,938 17,064 17,017 18,637 30.6% 9.5%
Portugal 3,791 4,081 4,380 4,408 4,750 25.3% 7.7%
Romania 4,482 4,730 4,879 4,890 5,026 12.1% 2.8%
Slovakia 1,514 1,955 2,084 1,851 2,017 33.2% 9.0%
Slovenia 922 997 1,049 1,102 1,186 28.7% 7.6%
Spain 9,494 9,857 10,631 10,995 11,854 24.8% 7.8%
Sweden 11,362 11,783 11,548 11,572 12,221 7.6% 5.6%
The Netherlands 5,119 5,319 5,803 6,254 6,816 33.2% 9.0%
United Kingdom 15,523 18,330 21,200 19,642 18,447 18.8% -6.1%
EU 28 199,935 210,588 219,504 221,988 229,908 15.0% 3.6%
Source: Eurostat
With the exception of the UK, no country recorded a negative was last achieved in 2008. The largest producer remains
growth rate, with double-digit growth observed in smaller Germany with a production value of 24.2 billion EUR (+0.4%
countries such as Ireland (+16%) and Croatia (+14%). In vs 2016), followed by Italy, which recorded a production value
the five years to 2017 every EU country has seen their of 13.3 billion EUR (+2.5% vs 2016) and France (production
production value grow with percentage increases ranging value of 11 billion EUR, -2.5% vs 2016). Sweden and the UK
from 5% (France) to 52% (Croatia). both achieved a production value of 9.6 billion EUR, albeit
with diverging trends (Sweden +7.4%, UK -5.8%). Overall the
The production value of the woodworking industries stricto top five countries account for 53% of EU production. With the
sensu for the 28 countries of the EU rose by 3.8% in 2017 to exception of Denmark, France and the UK production value
126 billion EUR exceeding the 125 billion milestone which grew in all countries where there is significant production.
21
Table 2.4: Production value per EU Member State in million EUR – wood industries stricto sensu, 2013-2017
Production 2013 2014 2015 2016 2017 17/13 17/16
(excl VAT)
Austria 7,443 7,454 7,756 7,962 8,341 12.1% 4.8%
Belgium 2,942 3,101 3,165 3,191 3,588 22.0% 12.5%
Bulgaria 416 440 480 475 511 22.9% 7.6%
Croatia 593 677 714 794 944 59.1% 18.9%
Cyprus 89 86 88 95 108 21.8% 13.6%
Czech Republic 3,045 3,043 3,204 3,313 3,509 15.2% 5.9%
Denmark 1,438 1,471 1,483 1,488 1,425 -0.9% -4.3%
Estonia 1,554 1,765 1,867 1,950 2,166 39.4% 11.1%
Finland 5,466 5,386 5,258 5,520 5,890 7.8% 6.7%
France 10,579 11,462 11,059 11,261 10,984 3.8% -2.5%
Germany 23,406 24,158 25,116 24,064 24,157 3.2% 0.4%
Greece 309 290 311 321 336 8.7% 4.5%
Hungary 682 752 826 872 976 43.1% 11.8%
Ireland 738 852 903 887 1,130 53.1% 27.5%
Italy 13,224 12,993 12,713 12,969 13,295 0.5% 2.5%
Latvia 1,829 1,964 1,957 2,067 2,214 21.1% 7.1%
Lithuania 902 1,070 1,114 1,152 1,187 31.7% 3.1%
Luxembourg 192 190 197 200 209 0.0% 0.0%
Malta 10 13 13 17 15 62.1% -10.5%
Poland 6,944 7,687 8,055 7,616 8,491 22.3% 11.5%
Portugal 2,506 2,681 2,854 2,819 3,008 20.0% 6.7%
Romania 2,851 2,945 2,980 2,857 2,938 3.1% 2.8%
Slovakia 804 1,150 1,218 1,022 1,113 38.5% 8.9%
Slovenia 610 646 693 720 766 25.6% 6.5%
Spain 4,999 5,288 5,887 5,982 6,676 33.5% 11.6%
Sweden 8,584 9,164 8,931 8,933 9,597 11.8% 7.4%
The Netherlands 2,208 2,341 2,587 2,798 2,944 33.3% 5.2%
United Kingdom 7,842 9,405 10,760 10,191 9,605 22.5% -5.8%
EU 28 112,203 118,470 122,188 121,534 126,121 12.4% 3.8%
Source: Eurostat
The European furniture industry realised a total production billion EUR (+2.9% vs 2016). Together they account for around
value of almost 104 billion EUR in 2017 (+3.3% vs 2016). Despite 45% of total EU furniture production. Poland has now clearly
this further increase in production, the level was still below established itself as the third largest producer in the furniture
to the 2007 and 2008 peaks which exceeded 110 billion EUR. industry with a production value of 10.2 billion EUR (+7.9%
Germany and Italy remain by far the two largest producers vs 2016). The UK production declined by 6.4% to 8.8 billion
in the furniture industry. The former recorded a production EUR. Sweden is the only other relatively large producer which
value of 23 billion EUR (+2% vs 2016), while the latter of 22.6 recorded a negative growth rate.
22
Table 2.5: Production value per EU Member State in million EUR – furniture industry, 2013-2017
Production 2013 2014 2015 2016 2017 17/13 17/16
(excl VAT)
Austria 2,845 2,845 2,867 2,994 3,103 9.1% 3.6%
Belgium 2,173 2,190 2,189 2,106 2,140 -1.5% 1.6%
Bulgaria 428 458 483 512 539 25.9% 5.3%
Croatia 340 334 373 451 477 40.3% 5.8%
Cyprus 45 43 40 44 48 7.3% 9.3%
Czech Republic 1,232 1,250 1,334 1,443 1,561 26.8% 8.2%
Denmark 1,754 1,744 1,841 1,950 2,020 15.1% 3.6%
Estonia 419 434 492 522 536 27.7% 2.6%
Finland 1,036 1,006 1,000 1,034 1,051 1.4% 1.7%
France 6,685 7,094 7,003 6,556 7,136 6.8% 8.8%
Germany 19,237 19,666 20,662 22,556 23,010 19.6% 2.0%
Greece 390 413 406 437 428 9.7% -2.2%
Hungary 543 575 648 677 709 30.7% 4.7%
Ireland 571 612 600 600 600 5.0% 0.0%
Italy 19,456 20,101 20,989 22,004 22,644 16.4% 2.9%
Latvia 212 233 239 244 260 22.7% 6.4%
Lithuania 1,181 1,377 1,413 1,467 1,642 39.1% 12.0%
Luxembourg 17 18 17 16 16 -8.1% -0.6%
Malta 42 44 48 46 51 23.3% 12.7%
Poland 7,325 8,251 9,009 9,401 10,146 38.5% 7.9%
Portugal 1,284 1,400 1,527 1,590 1,742 35.6% 9.6%
Romania 1,631 1,785 1,900 2,033 2,088 28.0% 2.7%
Slovakia 711 805 866 829 904 27.2% 9.1%
Slovenia 312 351 355 383 420 34.8% 9.7%
Spain 4,495 4,569 4,743 5,014 5,177 15.2% 3.3%
Sweden 2,778 2,619 2,617 2,639 2,624 -5.5% -0.6%
The Netherlands 2,911 2,978 3,216 3,457 3,872 33.0% 12.0%
United Kingdom 7,681 8,925 10,440 9,451 8,843 15.1% -6.4%
EU 28 87,733 92,118 97,317 100,454 103,786 18.3% 3.3%
Source: Eurostat
2.3 Extra-EU Imports

This chapter monitors the trade flows of the 28 Member The total EU-28 imports of woodworking products exceeded
States of the EU. Only extra-EU trade is taken into account 36 billion EUR in 2017, reflecting an increase of 5.2%
due to a lack of reliable figures for trade between the compared to 2016. Both the other woodworking products
28 members of the EU, although these flows are most stricto sensu and the furniture industry experienced large
important in absolute terms. increases of imports (+5.9% and +6.1% respectively), while
the imports of the sawmill industry fell by 3.1%.
23
Table 2.6: Extra-EU imports in million EUR, 2013-2017

NACE code 2013 2014 2015 2016 2017 17/13 17/16
16.1 2,879 3,156 3,429 3,506 3,399 18.1% -3.1%
16.2 4,476 5,030 5,691 5,725 6,061 35.4% 5.9%
16.21 1,589 1,830 2,017 2,035 2,278 43.4% 11.9%
16.22 383 422 451 422 456 19.1% 8.1%
16.23 504 522 638 660 662 31.3% 0.3%
16.24 207 269 361 351 385 86.0% 9.7%
16.29 1,793 1,987 2,224 2,257 2,280 27.2% 1.0%
Subtotal 16 7,355 8,186 9,120 9,231 9,460 28.6% 2.5%
31 18,572 20,962 24,363 25,226 26,775 44.2% 6.1%
Total 16 + 31 25,927 29,148 33,483 34,457 36,235 39.8% 5.2%
Source: Eurostat
Imports of other woodworking industries stricto sensu Furniture (NACE 31) accounted for 74% of the extra-EU
(NACE 16.2) rose further in 2017 (+5.9%) and all sub-sectors imports of woodworking products in 2017. Sawmilling
were concerned by these positive developments. The main products (NACE 16.1) accounted for 9% of imports and
increases of imports are observed for veneer sheets and other wood products (NACE 16.2) for 17%.
wood-based panels (NACE 16.21, +11.9%), packaging (NACE
16.24, +9.7%) and wood flooring (NACE 16.22, +8.1%).
Figure 2.3: Extra-EU Imports 2017 – Relative importance of the NACE sub-sectors
Source: Eurostat
In 2017, China and Russia continued to be the largest Extra- and Canada amounted together to approximately 7.5% of
EU suppliers of wood products to the EU, with market the market while 7.7% of imports came from Norway and
shares of 20% and 16% respectively. The United States were Switzerland together. 7% came from Ukraine and 6% from
the third largest trading partner with a stable market share Belarus. Finally, Indonesia accounted for 4% of EU imports.
of 13%. Imports from American countries such as Brazil
24
Figure 2.4: Extra-EU imports 2017 - Relative importance of main countries of origin
Source: Eurostat
2.4 Extra-EU Exports

Table 2.7: Extra-EU exports in million EUR, 2013-2017
NACE code 2013 2014 2015 2016 2017 17/13 17/16
16.1 4,799 5,140 5,053 4,974 5,629 17.3% 13.2%
16.2 5,571 5,421 5,600 5,709 6,207 11.4% 8.7%
16.21 2,755 2,624 2,641 2,674 2,948 7.0% 10.2%
16.22 444 448 460 498 533 20.0% 7.0%
16.23 1,429 1,376 1,424 1,434 1,536 7.5% 7.1%
16.24 530 524 553 568 650 22.6% 14.4%
16.29 413 449 522 535 540 30.8% 0.9%
Subtotal 16 10,370 10,561 10,653 10,683 11,836 14.1% 10.8%
31 20,399 21,115 22,333 22,183 23,481 15.1% 5.9%
Total 16 + 31 30,769 31,676 32,986 32,866 35,317 14.8% 7.5%
Source: Eurostat
The overall value of EU-28 exports of woodworking Exports of the furniture industry and of sawmilling, planing
products exceeded 35 billion EUR in 2017 which was 7.5% and impregnation upturned by 5.9% and 13.2% respectively.
more than in 2016. Exports of woodworking products stricto
sensu continued to grow but at a higher speed by 8.7% in Furniture (NACE 31) accounted for 66.5% of the extra-EU
2017, reflecting increases of exports of all sub-sectors, and exports of woodworking products in 2017. Sawmilling
especially of veneer and wood-based panels (NACE 16.21) products (NACE 16.1) accounted for a share of 15.9% of exports
and packaging (NACE 16.24). and other wood products (NACE 16.2) for a share of 17.6%.
25
Figure 2.5: Extra-EU exports 2017 - Relative importance of the NACE sub-sectors
Source: Eurostat
If one does not take transit trade into consideration, the industries stricto sensu exported about 9.4% while the
28 Member States exports outside the EU amounted to furniture sector sold 22.6% of its production outside the EU.
15.4% of their overall production in 2017. The woodworking
2.5 Destination of Exports

In 2017, the EU woodworking industries exported primarily of the extra-EU exports. Turkey, Morocco, South Korea and
to China, Switzerland, the USA, Norway and Japan which Australia accounted for more than 2% each and completed
accounted for shares of 12.9%, 12.2%, 11.2%, 9.4% and 9.1% the top ten destinations of extra-EU exports.
of extra-EU exports respectively. Egypt followed with 4.6%
Figure 2.6: Extra-EU exports 2017 - Relative importance of main destinations
Source: Eurostat
26
2.6 Trade Balance

The trade balance for the woodworking industries is different furniture industry (NACE 31) registered a negative balance of
according to the products. In total, the EU trade balance 3.3 billion EUR. In 2017, all sub-sectors of the woodworking
increased from -1.6 billion EUR in 2016 to -918 billion EUR industries stricto sensu have positive trade balances except
in 2017. The woodworking industries stricto sensu (NACE other woodworking products (NACE 16.29) whose balance
16) ended 2017 with a surplus of 2.4 billion EUR while the remained, as usual, negative.
Table 2.8: Trade balance in million EUR, 2013-2017

NACE code 2013 2014 2015 2016 2017
16.1 1,920 1,984 1,624 1,468 2,230
16.2 1,095 391 -91 -16 146
16.21 1,166 794 624 639 670
16.22 61 26 9 76 77
16.23 925 854 786 774 874
16.24 323 255 192 217 265
16.29 -1,380 -1,538 -1,702 -1,722 -1,740
Subtotal 16 3,015 2,375 1,533 1,452 2,376
31 1,827 153 -2,030 -3,043 -3,294
Total 16 + 31 4,842 2,528 -497 -1,591 -918
Source: Eurostat
2.7 Apparent Consumption

Apparent consumption of wood products grew further by apparent consumption of furniture rose by 3.5%. The other
3.2% in 2017 compared to 2016 and exceeded 230 billion woodworking products (NACE 16.2) improved by 4.1% in
EUR. The consumption of products from the woodworking 2017 while the sawmill, planing and impregnation products
industries stricto sensu increased by 3.1%, while the (NACE 16.1) sector remained stable.
Table 2.9: Apparent consumption per sub-sector in million EUR, 2013-2017

NACE code 2013 2014 2015 2016 2017 17/13 17/16
16.1 31,061 33,337 33,866 33,710 33,817 8.9% 0.3%
16.2 78,127 82,758 86,789 86,372 89,929 15.1% 4.1%
Subtotal 16 109,188 116,095 120,655 120,082 123,746 13.3% 3.1%
31 85,906 91,965 99,347 103,497 107,080 24.6% 3.5%
Total 16 + 31 195,093 208,061 220,002 223,579 230,826 18.3% 3.2%
Source: Eurostat
In this analysis, the consumption of sawmill products (NACE almost reached 90 billion EUR and represented 39% of the
16.1) amounted to 33.8 billion EUR and accounted for 14.7% total consumption of wood products while the consumption
of the total consumption of wood products in 2017. The of furniture (NACE 31) exceeded 107 billion EUR, meaning a
consumption of other woodworking products (NACE 16.2) relative consumption of 46.4%.
27
Figure 2.7: Apparent consumption 2017 - Breakdown per NACE sub-sector
Source: Eurostat
2.8 Employment
The figures on employment in the woodworking sector employment in small and medium-sized industrial sectors.
provide an indication of the overall employment, although Given the SME structure of the woodworking industries,
it should be borne in mind that some countries do not the actual total number of employees in the EU-28 wood
take into account firms with less than 20 employees. Thus, industries should be estimated at substantially more than
the global figures tend to substantially underestimate the 2 million in 2017.
Table 2.10: Employment in the EU woodworking industries, 2013-2017

NACE code 2013 2014 2015 2016 2017 17/13 17/16
16.1 244,649 249,178 248,062 244,526 238,677 -2.4% -2.4%
16.2 722,215 732,080 726,810 726,997 731,417 1.3% 0.6%
Subtotal 16 966,864 981,258 974,872 971,523 970,094 0.3% -0.1%
31 972,649 954,857 974,931 1,006,386 1,018,896 4.8% 1.2%
Total 16 & 31 1,939,513 1,936,115 1,949,803 1,977,909 1,988,990 2.6% 0.6%
Source: Eurostat
According to the Eurostat data, employment in the in the furniture sector (+4.8%). Within the woodworking
woodworking industries rose by 0.6% in 2017 but remained industries stricto sensu, decrease of employment was
below the 2 million threshold. Employment increased both observed in the sawmill sector (-2.4%) while employment
in the woodworking industries stricto sensu (+0.3%) and increased by 0.6% in the other woodworking industries.
© Shutterstock
28
Table 2.11: Employment in the EU woodworking and furniture industries per EU Member State, 2013-2017
number of 2013 2014 2015 2016 2017 17/13 17/16
employees
Austria 62,009 61,013 60,433 59,997 60,673 -2.2% 1.1%
Belgium 24,573 25,002 23,785 23,492 24,711 0.6% 5.2%
Bulgaria 38,376 38,787 39,041 39,347 39,505 2.9% 0.4%
Croatia 26,635 26,121 26,486 27,750 28,833 8.3% 3.9%
Cyprus 2,942 2,690 2,619 2,715 2,885 -1.9% 6.3%
Czech Republic 81,707 80,338 80,431 80,469 80,209 -1.8% -0.3%
Denmark 20,053 20,298 20,476 17,505 17,521 -12.6% 0.1%
Estonia 23,118 24,290 25,126 25,373 25,794 11.6% 1.7%
Finland 30,030 28,776 27,957 27,838 26,787 -10.8% -3.8%
France 121,815 116,883 109,228 104,758 104,500 -14.2% -0.2%
Germany 279,440 274,914 282,699 278,867 277,205 -0.8% -0.6%
Greece 14,874 15,325 15,669 18,026 17,593 18.3% -2.4%
Hungary 33,402 34,024 35,899 36,745 37,101 11.1% 1.0%
Ireland 8,208 8,644 8,984 9,445 9,528 16.1% 0.9%
Italy 263,847 249,913 239,251 237,872 240,846 -8.7% 1.3%
Latvia 30,825 32,390 32,113 32,225 31,712 2.9% -1.6%
Lithuania 46,264 49,856 50,610 51,485 50,821 9.8% -1.3%
Luxembourg 169 159 163 166 173 2.4% 4.2%
Malta 1,203 1,277 1,314 1,282 1,558 29.5% 21.5%
Poland 264,642 282,015 297,638 310,779 316,457 19.6% 1.8%
Portugal 57,000 57,140 58,476 59,985 61,569 8.0% 2.6%
Romania 119,796 118,471 120,613 120,606 116,531 -2.7% -3.4%
Slovakia 33,828 37,659 39,122 35,835 37,799 11.7% 5.5%
Slovenia 14,306 14,262 14,259 14,541 14,736 3.0% 1.3%
Spain 108,634 102,839 102,491 105,724 111,140 2.3% 5.1%
Sweden 47,121 47,390 49,077 48,257 48,886 3.7% 1.3%
The Netherlands 37,327 35,828 36,540 38,057 39,693 6.3% 4.3%
United Kingdom 147,369 149,811 149,303 168,768 164,224 11.4% -2.7%
EU 28 1,939,513 1,936,115 1,949,803 1,977,909 1,988,990 2.6% 0.6%
Source: Eurostat
Among the 28 Member States, and thanks to a further Belgium (+5.2%) and Spain (+5.1%) showed the most
increase of 1.8%, Poland consolidated its leading position significant increases while Finland (-3.8%) and Romania
in the employment ranking in the woodworking industries (-3.4%) experienced the largest decreases in employment
(NACE 16 + 31). Poland is above the 300,000 jobs threshold in 2017.
since 2016. Malta (+21.5%), Cyprus (+6.3%), Slovakia (+5.5%),
29
Table 2.12: Employment in the EU woodworking and furniture industries per EU Member State, 2017
number of employees 16 16.1 16.2 31 16 + 31
Austria 33,433 10,701 22,732 27,240 60,673
Belgium 12,155 1,774 10,381 12,556 24,711
Bulgaria 16,775 6,492 10,283 22,730 39,505
Croatia 17,998 7,677 10,321 10,835 28,833
Cyprus 1,951 10 1,941 934 2,885
Czech Republic 54,303 7,813 46,490 25,906 80,209
Denmark 8,246 1,038 7,208 9,275 17,521
Estonia 17,982 5,421 12,561 7,812 25,794
Finland 20,101 5,696 14,405 6,686 26,787
France 59,100 17,800 41,300 45,400 104,500
Germany 131,652 24,956 106,696 145,553 277,205
Greece 6,820 1,008 5,812 10,773 17,593
Hungary 18,264 4,210 14,054 18,837 37,101
Ireland 5,200 1,111 4,089 4,328 9,528
Italy 104,277 13,507 90,770 136,569 240,846
Latvia 24,748 12,885 11,863 6,964 31,712
Lithuania 21,471 7,215 14,256 29,350 50,821
Luxembourg 0 0 0 173 173
Malta 285 0 285 1,273 1,558
Poland 127,382 37,029 90,353 189,075 316,457
Portugal 29,075 4,983 24,092 32,494 61,569
Romania 51,537 26,254 25,283 64,994 116,531
Slovakia 23,741 9,772 13,969 14,058 37,799
Slovenia 8,708 2,455 6,253 6,028 14,736
Spain 52,319 7,126 45,193 58,821 111,140
Sweden 34,015 11,627 22,388 14,871 48,886
The Netherlands 14,526 1,592 12,934 25,167 39,693
United Kingdom 74,030 8,525 65,505 90,194 164,224
EU 28 970,094 238,677 731,417 1,018,896 1,988,990
Source: Eurostat
In terms of employment, the furniture industry represented (NACE 16.1) and the furniture sector (NACE 31), most people
half of the jobs (51%), the sawmill industry accounted were employed in Poland. Germany continues to dominate
for 12% of the employment while the other sub-sectors the other sub-sectors (NACE 16.2).
accounted for 37%. Again this year, in the sawmill industry
30
2.9 Number of Enterprises

According to Eurostat, the woodworking industries counted respectively. These figures remain underestimations since
almost 300,567 companies in 2017, meaning an increase of small companies are not necessarily taken into account
about 11,991 companies compared to 2016. Among these given the Member States’ reporting. In the furniture and
300,567 companies, 120,000 were active in the furniture the construction elements sectors, the number of small
business (NACE 31) while the sawmill industry (NACE 16.1) companies is considerable and therefore, the real number of
and the other sub-sectors of woodworking products (NACE firms could be estimated at more than 350,000 companies.
16.2) accounted for roughly 33,721 and 134,855 companies
Figure 2.8: Number of enterprises 2017 - Breakdown per NACE sub-sector
Source: Eurostat
© Shutterstock
31
3. Economic overview of the wood

markets
3.1 Wood raw materials
In the UNECE Region (Europe, Commonwealth of Independent from forests for fuel are highly unreliable because few
State Countries and North America) in 2017 total removals countries have consistent methods for collecting relevant
of wood in the rough reached 1.35 billion m3. This figure was data for this increasingly important end use; nevertheless,
projected to rise to 1.367 billion m3 in 2018 and 1.37 billion m3 it is clear that a fairly large share of forest removals are used
in 2019. for energy purposes.” (UNECE/FAO Forest Products Annual
Market Review 2016-2017). Overall, “data on woodfuel
Wood fuel represents overall 16.7% of total removals of wood removals from forests are underreported in many countries”
in the rough in the UNECE region. This figure was expected (UNECE/FAO Forest Products Annual Market Review 2017-
to slightly increase to 16.8% in 2018. There are however 2018).
significant differences at regional and country level.
Forestry accounts for more than 60% of all EU domestic
In Europe, up to 23.5% of wood removed in the rough was used biomass supplied for energy purposes: in 2016, direct
for fuel. Such figure was expected to slightly decline to 23.4% in supply of woody biomass from forests and other wooded
2018 and remain stable in 2019. At country level, the variance land contributed 32.5% (44 Mtoe), and indirect supply of
is considerable: wood fuel represents a remarkable 93% of wood contributed another 28.2% (38 Mtoe) (Source: JRC,
total wood removed in Albania, 85% in North Macedonia, Brief on biomass for energy in the European Union).
83% in Serbia, while in Western Europe the wood fuel share
is especially high in Italy (a remarkable 83%), Denmark (58%), As regards industrial roundwood, it makes up slightly more
and France (51%). Conversely, in countries such as the UK than 83% of total removals of wood in the rough in the
(19%), Germany (also 19%), Finland (12%), Sweden (10%), and UNECE region, with significant differences across the region.
Slovakia (6%) the wood fuel share is much lower. Indeed, in Europe its share is 76.5%, while in the CIS region
is 85% and in North America 88%. Of the total industrial
In the CIS region in 2017 the wood fuel share was 14.7%, a roundwood removals of 1.129 billion m3 in the UNECE in
figure which might slightly decline, while in North America 2017 (+1% vs 2016, a further increase of around 1% was
the wood fuel share is at around 11.7%, a figure which is expected in 2018), 60% was accounted for by logs (the rest is
projected to remain stable in 2018 and 2019. Differences mainly accounted for by pulpwood). This figure is expected
within North America are significant, as Canada’s share is to remain stable over the next couple of years. At regional
just 1.3% while the US share is 15.3%. level there are differences: the logs share in Europe is around
56% (projected to remain stable), in the CIS Countries 67%
However, UNECE/FAO recommends taking these data with (also projected to remain stable) and in North America 60%
a pinch of salt: “Estimates of roundwood volumes removed (expected to somewhat increase in 2019).
Table 3.1: Industrial Roundwood main indicators, UNECE Region, 2013-2018 (1,000 m3)
UNECE region 2013 2014 2015 2016 2017 2018 17/16 18/17
Removals 1,069,277 1,097,135 1,104,744 1,126,639 1,129,471 1,138,775 0.3 0.8
Imports 62,098 61,696 59,774 62,137 60,261 55,043 -3.0 -8.7
Exports 90,012 91,840 83,760 87,383 89,740 85,964 2.7 -4.2
Net trade 27,914 30,144 23,986 25,247 29,479 30,921
Consumption 1,041,364 1,066,991 1,080,758 1,101,392 1,099,992 1,107,853 -0.1 0.7
Source: FAO 2018 and EOS re-elaboration, 2018 data are estimates
31
In general, the demand for wood (both industrial The consumption of industrial roundwood in the UNECE
roundwood and wood fuel) is growing across the Eurasian region has followed a similar trend to that of production in
landmass, though in 2019 the pace of growth is expected the last five years, with consumption increasing steadily for
to significantly slow down in Europe. Total log use rose softwood logs and remaining fairly flat for hardwood logs.
in Europe and the CIS region, but in North America it was The global trade of softwood logs increased in 2016 and 2017
expected to fall in 2018 and slightly rebound in 2019. to reach its second-highest level in ten years. An estimated
84 million m3 of softwood logs were traded internationally
Table 3.1 shows the main market indicators in the last 6 in 2017, of which the UNECE region exported 75%. However,
years in the UNECE region (2018 forecasts, data are shown in preliminary results for 2018 show that UNECE countries
000 m3). Apparent consumption has stagnated in 2017 but seem to have traded less logs than in 2017.
was expected to grow in 2018.
3.1.1. Europe – Industrial Roundwood
Table 3.2: Industrial Roundwood main indicators, Europe, 2013-2018 (1,000 m3)
Europe 2013 2014 2015 2016 2017 2018 17/16 18/17
Removals 366,929 383,446 388,422 396,055 400,973 403,277 1.2 0.6
Imports 55,729 55,972 53,424 54,240 52,136 46,918 -3.9 -10.0
Exports 43,132 44,399 40,782 41,707 44,297 41,045 6.2 -7.3
Net trade -12,598 -11,573 -12,643 -12,533 -7,839 -5,874
Consumption 379,526 395,019 401,065 408,587 408,812 409,151 0.1 0.1
Industrial roundwood (which includes mainly logs and increase in Poland (+19%) and Finland (+12%). Sweden’s
pulpwood, and a residual category made up of pitprops, removals were up 7% in the same period. Consumption
poles, posts) removals in 2017 in Europe reached 401 has been instead stable both in 2017 and was expected to
million m3, a figure somewhat higher than previously remain so also in 2018 at around 409 million m3, having
forecast, up 1.2% vs the previous year. A further growth was recorded significant growth in the years 2013-2016 and up
expected in 2018. From the sawmill industry point of view, by 68 million m3 from the trough of 341 million m3 observed
it is interesting to note that this increase is mainly due to a in 2009.
growth in softwood logs removals (+ 1% to 196 million m3 in
2018). Early projections for 2018 point to stable removals. When it comes to trade, Europe continues to be a net
Hardwood logs removals are instead steady, with the importer of industrial roundwood, though the deficit is
only significant growth taking place in Turkey. Pulpwood reducing. A higher and higher reliance on intra-European
softwood removals were also growing. materials is noticeable: in the six years to 2018 imports
decreased by more than 8 million m3, whereas exports
Sweden occupied the first place in the industrial roundwood were down by 2 million m3. Both imports and exports
removals ranking in 2017, accounting for 65.3 million m3 decreased in 2018. Regarding logs, UNECE/FAO reports that
(of which 36.7 million m3 of logs). A distant second came “Germany has become a major importer of softwood logs
Finland (55.5 million m3, of which 24.7 million m3 of logs), in the past ten years. It imported record-high log volumes
followed by Germany (43.5 million m3, of which 29.8 million in 2016 and 2017 to supply its expanding sawmilling sector.
m3 of logs), Poland (40 million m3, of which 17.8 million m3 The two major exporters of sawlogs to Germany are the
of logs) and France (25.3 million m3, of which 16.7 million Czech Republic and Norway, together supplying more than
m3 of logs). It is interesting to note that in the five years to 50% of the import volume in the last five years”. The most
2017 industrial roundwood removals were overall up 4% important intra-European trade flow remains the export of
in France and Germany, while there was a double digit Czech Republic softwood logs to Austria, which are part of
32
the same industrial region in the sawmill sector. Germany Europe, 2.5% of spruce logs were exported to China, 6% of
and Austria are the second and third largest logs importers pine logs, 30% of oak logs, 22% of beech logs. In 2018 data is
in the world after China. At 4.5 million m3 Czech exports still very tentative. But it looks like around 5% of spruce logs
of softwood logs are three times as much as the second were exported to China, 12% of pine logs, 31% of oak logs,
largest European exporter, Norway (1.5 million m3 in 2018). 23% of beech logs (Eurostat, 2019).
Finland’s logs imports have declined substantially in the last
decade, and the Finnish forest industry is now much less It is worth emphasizing the high amount of damaged wood
reliant than it once was on imported wood raw materials. in Europe in 2017-2018, when the continent started to be
Sweden’s softwood log imports increased for the second ravaged by a series of storms in between frequent drought.
consecutive year in 2017, to 5.6 million m3. Bug infestation also took a heavy toll on the forests. Overall,
from the summer of 2017 until the end of 2018 the amount
When it comes to hardwood logs, France and Germany of storm-damaged wood was about 57 million m3 (Germany
remain the largest exporters accounting for 44% of export 20 million m3, Italy 15, Poland 12, Austria 4, Czech Republic
logs. A significant chunk of these exports is directed to Asian 3). Drought and insect infestation caused a volume of
countries such as China, and over the last few years, some damaged wood equal to 20-25 million m3 in Czech Republic,
European countries have observed a rise in exports to China followed by Germany with 10-12 million m3. So, these
also of softwood logs. France, Belgium, and Germany are calamities resulted in more than 100 million m3 of damaged
the countries most affected. In 2017 of all traded logs (so wood in Europe in 2017-2018 (EUWID, 2019). Calamities
the ones processed within the borders of the country where look set to hit Europe hard once again in 2019.
they are harvested are not included in this calculation) in
3.1.2 CIS Region – Industrial Roundwood

The timber harvest in the CIS region – which includes, inter acknowledged the existence of undocumented removals.
alia, Russia, Ukraine, and Belarus – has been growing for a What is more, the amount of illegal harvesting remains
number of years. In the six years to 2018 production of the unclear and estimates of the illegal harvest vary substantially.
region rose by 25 million m3. The undocumented removals seem to particularly affect the
Russian Far East. However, according to the UNECE/FAO,
However, the figures below shall be taken with a pinch of “there is general consensus that non-documented harvest
salt as Ukraine did not provide any data since 2014, while is declining in the Russian Federation, the result of stricter
in Russia, in addition to official figures, the Government has controls”.
Table 3.3: Industrial Roundwood main indicators, CIS Region, 2013-2018 (1,000 m3)
CIS 2013 2014 2015 2016 2017 2018 17/16 18/17
Removals 199,660 208,051 210,286 219,304 220,219 224,894 0.4 2.1
Imports 571 553 542 464 479 479 3.3 0.0
Exports 25,158 26,782 25,357 25,457 23,876 23,353 -6.2 -2.2
Net trade 24,587 26,229 24,815 24,993 23,397 22,874
Consumption 175,074 181,822 185,471 194,311 196,822 202,020 1.3 2.6
Based on the available and official figures, removals of harvest to increase by 50% by 2050 (EUWID,2018). It is
both softwood and hardwood logs are increasing in Russia interesting to note that the increase in timber removals
– this is the trend the determines the overall growth in the was uneven across the Russian Federation: courtesy of a
region. Removals of softwood logs was set to reach 120.2 strong Chinese demand, log production and consumption
million m3 in 2018, up from 117.9 million m3. The Russian have particularly increased in the Far East. Also, most
timber harvest of 2017 set a 20-year record high volume. investments in industry capacity in recent years have been
The Russian government expects the country’s timber in the provinces of Siberia and Russia Far East. In the period
33
2013-2017, the harvest volume increased by 30% in Siberia development of a real private sector and wants to mend
and the Far East, was practically unchanged in the Russian fences with the United States. Mr Lukashenko has also
North West, and fell in the central provinces. However, turned to China, luring its investors and lenders. However,
Russia supplied in 2017 about 10 million m3 of softwood Russia remains Belarus’ largest trading partner, so the
sawlogs to the Chinese market compared with 25 million m3 delicate balancing act is expected to continue.
in 2007. According to preliminary statistics, Russian exports
of softwood sawlogs to China further decreased in 2018 to Data from Ukraine has not been updated for some years.
9.2 million m3 (EUWID, 2019). Overall, exports of softwood Removals of logs seem to be around 7 million m3 (softwood
logs are around 15 million m3. The Russian Federation is the 5.8 million m3, hardwood 1.3 million m3). Under the existing
world’s second-largest exporter of softwood logs after New Ukrainian legislation, log exports from the country are
Zealand and the largest exporter of hardwood logs. Russian banned for ten years as of 1 November 2015, with the
hardwood log exports trended upward in the eight years to exception of pine log exports, which were banned from
2017, to 7.5 million m3, with more than 90% going to Finland January 2017. It remains to be seen for how long the ban
and China (mainly birch). will be in force. The EU Commission and Ukraine are holding
talks, but with presidential and parliamentary elections in
Belarus, due to its geographical proximity, is an interesting Ukraine in 2019 the situation is unlike to change any soon.
country for Europe. Removals of industrial roundwood While the ban represents an infringement of the Deep and
look like being in the region of 14.5 million m3, making it a Comprehensive Free Trade Agreement between the EU
relatively large producer. Removals seem to be on the rise and Ukraine, Ukraine’s path toward democracy remains
and are projected to further increase. Logs’ production the key priority for the EU and the EU financial support
stands at 7.6 million m3. In 2015, the President of Belarus aims at helping Ukraine in implementing democratic
signed a law banning export sales of pulpwood, veneer mechanisms, the rule of law, and human rights in addition
and saw-logs, which has entered into force in 2016. The to reduce poverty and create jobs in Ukraine. Indeed, on
President himself, by decree, can make exceptions. While 30 November, the European Commission, on behalf of the
there is evidence that such decrees were issued (for a EU, approved the disbursement of the first €500 million of
certain species, diameter class, and quality) since the ban the new Macro-Financial Assistance (MFA) programme to
is in place, there is obviously a lack of predictability that Ukraine. With this disbursement, the total Macro-Financial
discourages aspiring purchasers of Belarusian unprocessed Assistance extended to Ukraine by the EU since 2014 will
logs. Politically, it looks like Belarus is tentatively opening to reach €3.3 billion, the largest amount of such assistance
Western Europe. According to an article of The Economist directed at any non-EU country.
(January 2019), President Lukashenko is allowing the
3.1.3 North America – Industrial roundwood

Table 3.4: Industrial Roundwood main indicators, North America, 2013-2018 (1,000 m3)
North 2013 2014 2015 2016 2017 2018 17/16 18/17
America
Removals 502,688 505,637 506,036 511,280 508,279 510,604 -0.6 0.5
Imports 5,798 5,171 5,807 7,433 7,646 7,646 2.9 0.0
Exports 21,723 20,658 17,621 20,219 21,567 21,567 6.7 0.0
Net trade 15,925 15,487 11,814 12,786 13,921 13,921
Consumption 486,764 490,150 494,222 498,494 494,358 496,683 -0.8 0.5
In North America industrial roundwood removals over the exporters in the world of industrial roundwood.
last few years peaked in 2016. Overall in 2018 they were set
to remain stable. Relatively to their huge harvest, imports The US accounts for more than 69% of total North America’
and exports do no account for a big percentage, though removals; the US share has been somewhat declining over
the US and Canada do remain the third and fourth largest the last couple of years.
34
In a similar fashion to Europe, pest infestations have been in the previous four years. This appears to be too low given
taking a heavy toll on Canadian forests. The UNECE/FAO the high log demand in the US forest industry; it might also
reports that “About 50% of Canada’s timber harvest is in be expected that the timber harvest in 2017 would be higher
the province of British Columbia (BC). According to the than in 2013 because forest industry production increased
British Columbian Ministry of Forest’s 2015 assessment, significantly over the period. In contrast to the official data,
the more-than-decade-long pine beetle infestation there expert analysis based on derived log consumption by
has killed more than 730 million m3 of merchantable pine the forest industry and net log trade indicates that actual
volume (about 54% of the province’s total merchantable removals of industrial roundwood in 2017 were closer to 396
pine timber inventory). In the Central Interior, the worst-hit million m3, 4.2% higher than in 2013”.
region, beetles have destroyed 80-90% of the pine forests.”
Overall, BC sawlog harvests in 2020 will be 20% below 2000 Regarding trade, Canada’s exports of softwood logs declined
levels. Canada’s roundwood harvest peaked in the 2000s in 2017 to 7.4 million m3, down from 7.6 million m3 in 2016.
and is now shrinking. The long-term sustainable harvest is Deliveries to Japan and to the US dropped (in the latter case,
expected to somewhat decline. As a result, lumber output to their lowest level in six years). China continued to be the
is expected to be relatively flat in the coming years (Russ major market for Canadian logs, with shipments reaching
Taylor, 2018). 3.6 million m3, the second-highest volume on record. China
remains the main market even for US logs. Overall, softwood
As far as the US is concerned, “the UNECE/FAO (2018) data log exports from the US increased by 11.5% in 2017, to 10.8
on US timber harvest (removals of industrial roundwood) million m3. The US South is becoming a more and more
was about 355 million m3 in 2017, practically the same as important region in the export of pine logs.
3.1.4 Global Focus and Extra Unece region – Industrial Roundwood

Table 3.5: World largest producers, exporters and importers of roundwood, 2017, m3
Removals Exports Imports
United States of America 355,208,132 Russian Federation 19,422,941 China 55,259,750
Russian Federation 197,610,892 New Zealand 19,246,931 Germany 8,680,584
China 161,711,200 United States of America 13,483,453 Austria 8,649,038
Canada 153,070,600 Canada 8,083,247 Sweden 7,695,283
Brazil 145,102,000 Czechia 6,583,336 Canada 6,491,400
Indonesia 74,041,000 Australia 4,322,698 India 4,898,178
Sweden 68,469,599 France 4,084,920 Finland 4,830,686
Finland 55,330,267 Germany 3,963,309 Republic of Korea 3,715,161
India 49,517,000 Norway 3,544,337 Belgium 3,636,878
Chile 45,987,000 Papua New Guinea 3,261,294 Japan 3,265,702
Germany 43,561,600 Solomon Islands 3,156,000 Italy 2,357,077
Poland 40,099,400 Poland 2,821,842 Portugal 2,000,368
Australia 33,143,094 Latvia 2,651,872 Czechia 1,898,137
New Zealand 29,097,000 Malaysia 2,571,843 Poland 1,703,972
France 25,324,000 Estonia 2,556,752 Viet Nam 1,504,097
Japan 22,645,000 Slovenia 2,536,010 Romania 1,477,512
Viet Nam 20,153,820 Belarus 1,975,700 Latvia 1,228,879
Turkey 19,462,000 Slovakia 1,955,283 France 1,223,712
Czechia 17,011,000 Lithuania 1,558,693 Indonesia 1,172,765
Spain 14,642,343 Cameroon 1,420,371 United States of America 1,154,212
Source: FAO 2018 and EOS re-elaboration
35
Outside the UNECE region, China, Brazil, and Indonesia are Regional Economic Development underlines that processing
major producers. It is interesting to notice that at around in New Zealand needs to increase and that New Zealand is
162 million m3 in 2017 Chinese removals slightly declined “the last major supplier to allow unfettered exports of logs”
compared to 2016. Conversely imports increased by more (Source: https://www.newsroom.co.nz/2018/11/01/302618/
than 5% in 2016 and further rose in 2017 (more information oram-feeding-chinas-insatiable-appetite-for-logs). In a
on this is provided below). similar fashion to New Zealand, even Australia has seen its
exports to China soar. Overall, Australia has rapidly become
Regarding exports, New Zealand is together with Russia the a major exporter of softwood logs and was the world’s sixth
world largest exporter (at 19.2 million m3). This increase has largest log exporter in 2017. In 2012, Australia’s annual
been driven by Chinese appetite for softwood logs. In 2017 exports totaled only 1.2 million m3. The table below is about
exports to China kept going up. Newsroom reports that the the Chinese imports of softwood logs in the 5 years to 2017.
New Zealand state is trying to find solutions to break free It is evident that the two Oceanian countries are the ones
from the commodity log trap. The Minister of Forests and which are supplying more and more logs to China.
Table 3.6: World’s largest exporters of softwood logs to China, 2013 and 2017, million m3
COUNTRY/YEAR 2013 2017 % Change
New Zealand 11.3 13.4 19
Russian Federation 9.3 8.7 -6
United States 5.3 4.8 -9
Australia 1.6 4.2 163
Canada 2.7 2.8 4
Other 2.8 3 7
Total 32.9 36.9 12
Source: UNECE/FAO, 2018
Other large non-UNECE exports include Papua New Guinea, Other relevant non-UNECE roundwood importers include
which is the tenth largest roundwood export country (in 2017 India (4.9 million m3 imported in 2017 vs 5.5 million m3 in
it exported 3.2 million m3, 600,000 m3 less than in 2016) while 2016), South Korea (3.7 million in 2017 vs more than 4 million
the Solomon Islands are the eleventh. Czech Republic remains in 2016), Japan (3.26 million m3 in 2017 vs 3.65 in 2016).
a very important exporter – the largest in Europe. In 2017 its
exports reached 6.6 million m3, much higher than in 2016.
Regarding imports, China remains by far the largest world

importer with 42% of total industrial roundwood imports;
it is impressive to notice that the countries ranked from
second to tenth (Germany, Austria, Sweden, Canada, India
Finland, South Korea, Belgium, Japan) imported overall 51
million m3 of industrial roundwood, less than China. Thus,
it is evident that the market dynamics of roundwood trade
are strongly influenced by China. One key factor leading to
this situation – along with the dynamism of the Chinese
economy – is the decision of the Chinese government to
completely stop commercial logging in natural forests (as
opposed to plantations), as reported by the Chinese State
Forestry Administration in March 2017. Chinese demand,
© Shutterstock
according to some observers, is expected to remain buoyant

over the next few years. Others are a bit warier.
36
3.2. Sawn Softwood

The table below shows the main market indicators of the 2018 the pace of growth was expected to slow down, but
last 6 years in the UNECE region (2018 data are estimates; that remains to be confirmed. It is interesting to notice the
data are shown in 1000 m3). Overall in the last few years progression of all indicators in the period 2013-2017 with
sawn softwood production has been constantly growing. In production gaining more than 34 million m3.
Table 3.7: Sawn softwood main indicators, UNECE Region, 2013-2018 (1,000 m3)
UNECE region 2013 2014 2015 2016 2017 2018 17/16 18/17
Production 225,784 234,172 241,591 252,127 259,502 261,221 2.9 0.7
Imports 56,957 60,936 63,274 68,816 70,259 70,161 2.1 -0.1
Exports 98,135 103,188 106,381 114,293 117,905 119,101 3.2 1.0
Net trade 41,178 42,252 43,107 45,478 47,646 48,940
Consumption 184,606 191,920 198,484 206,649 211,855 212,281 2.5 0.2
The construction industry traditionally plays an important positive implications for household income, corporate
role in determining the market trends of the sawn softwood profits and the state of public finances. Moreover, the low
industry. interest rate level, immigration and internal migration flows,
as well as the investment backlog that has accumulated
In the United States, the construction markets have been in areas like infrastructure since the financial crisis is
growing for some years and look set to rise even in the supporting the upswing. There are also clear constraints on
next couple of years, which bodes well for sawnwood the public sector’s scope to take action.”
consumption. On the other hand, while the economic cycle
is quite mature, US housing starts remain at relatively low Central-Eastern Europe grew faster (+13%) than Western
level compared with their historic average. Also, there is Europe (+2%). The pace of growth is expected to slightly slow
significant uncertainty on this forecast as in the first quarter down in the next few years. The latest news on the general
of 2019 US housing starts have been below expectations. economy side, however, points to a marked slowdown in
the pace of GDP growth which could have an effect also on
At their 86th Conference in Paris, Euroconstruct forecasted the construction market.
that total construction output in Europe in 2018 grow by
2.8% and slow down to a pace of 1.6% in 2019. As far as the construction industry in Russia is concerned,
“given the low base effect established after four consecutive
In issuing the new forecast, Euroconstruct noted that “In years of reductions, along with the increasing political
the very short term, confidence for households is reaching determination to carry out multi-billion initiatives to
a peak in 2018 fuelling the new-residential sector. On a modernise and expand the country’s civil engineering
more structural point of view, the 2021 construction market infrastructure, and to support the renovation and
volume would stay still 15 % behind 2007’s level for the EC construction of non-residential public buildings, an upward
19 countries, but when eliminating the extrema situations trend is expected to re-emerge in the construction industry
in Ireland, Spain and Portugal, the level of output would be in 2019, after an 11% cumulative reduction between 2014
recovered for the sum of the other countries.”. and 2017, followed by a predicted 3% fall in 2018” (Source:
https://www.pmrcr.com/en/russian-construction-industry-
Furthermore, “The favourable development in construction set-to-drop-3-in-2018/, December 2018).
demand is partly due to robust economic growth and its
37
3.2.1 Europe – Sawn Softwood

Table 3.8: Sawn softwood main indicators, Europe, 2013-2018 (1,000 m3)
Europe 2013 2014 2015 2016 2017 2018 17/16 18/17
Production 98,111 102,300 105,119 108,665 109,952 110,821 1.2 0.8
Imports 31,446 34,159 34,642 36,003 37,837 37,576 5.1 -0.7
Exports 45,269 47,302 47,816 49,781 51,470 51,940 3.4 0.9
Net trade 13,823 13,142 13,174 13,778 13,632 14,364
Consumption 84,287 89,158 91,945 94,887 96,320 96,458 1.5 0.1
This sub-chapter is focused on the European countries Regarding consumption, as mentioned above the UK remains a
which are not members of EOS. The EOS countries will be very relevant user in spite of Brexit-related turmoil. At this writing
thoroughly analysed subsequently. However, the largest (early April 2019), it is difficult to predict the effect of the Brexit
producers of sawn softwood are all members of EOS. negotiations on the European sawmill industry. The UK will
Therefore, in order to provide a full picture of the sawn at any rate remain one of the world’s largest importer of sawn
softwood markets in Europe, they need to be mentioned. softwood; long-established seller-customer relationships and
geographical proximity will ensure that European producers
Sawn softwood production in Europe has been growing in the will continue to have a prominent role in the market. However,
period 2012-2018. While there are some significant regional a decline of deliveries to the UK – at least in the short-term –
differences which will be analysed more in depth in the EOS cannot be ruled out. In Italy consumption reached 4.9 million m3
market survey, it is worth remarking that the sawn softwood but was expected to slow down in 2018-2019 to 4.7 million m3.
markets looked in a good shape in 2017 and for two thirds The five largest consumers of sawn softwood in Europe account
of 2018. Subsequently there was a noticeable slowdown. for 52% of total consumption in the sub-region – Germany, the
Exports have been doing well for many years but there was a UK, France, Austria, Sweden. The Nordic Countries and Austria
slowdown observed in many countries at the end of 2018. In have the highest per capita consumption of sawn softwood.
the five years to 2017 European producers were able to export
more than 6 million m3. Overall, the mood in the sector in 2018 As far as overseas exports are concerned, the main markets
was high due to a satisfactory level of sales prices: in some of European sawn softwood are China, Japan, Egypt and the
countries a slight decline in production and exports was more United States. In 2017 there was a huge increase in exports to
than made up for by an increase in sales expressed in value. China (from the Nordic countries mainly), which reached 3.4
million m3, and to the United States (Germany and Sweden,
Consumption has been on the rise in the observed period. but also other EU countries) which more than doubled to
Recovering European construction markets underpinned 1.3 million m3. Japan and Egypt also remain very important
an increase of over 12 million m3 in the period to 2017. markets with Japan absorbing more than 3 million m3 (slightly
Consumption was set to grow even in 2018. more than in 2016) and Egypt 2.8 million, down 2% vs 2016.
However, there was a marked drop of exports to China in 2018,
As said, the major European producers are all EOS countries: while the upward march of deliveries to the US continued in
Germany, Sweden, Finland, Austria, France. Relatively big the first part of 2018: in H1 2018 US imports of European sawn
non-EOS European producers also include Poland (where, softwood were twice as high as in H1 2017. Scandinavian
according to the UNECE/FAO, production was expected to exports to Japan decreased in 2018 compared with 2017 and
slightly grow to 4.5 million m3 in 2018), and Czech Republic, in the second part of 2018 the US market was weaker.
which has a stable production at 4 million m3.
Regarding European imports, flows are mainly intra sub-regional;
The UNECE/FAO reports that: “Sawmilling capacity in extra sub-regional imports account for about 20% of imports.
Europe is still capable of increasing production. Investment Sawn softwood to Europe is imported mainly from CIS countries.
continues to focus on upgrading existing sawmills rather Overseas imports to Europe remained marginal in 2017 and early
than initiating greenfield operations.” projections show that this trend has continued in 2018.
38
3.2.2 CIS Region – Sawn Softwood

Table 3.9: Sawn softwood main indicators, CIS Region, 2013-2018 (1,000 m3)
CIS 2013 2014 2015 2016 2017 2018 17/16 18/17
Production 35,198 36,178 37,318 39,674 43,790 45,048 10.4 2.9
Imports 5,224 4,981 4,621 4,781 4,985 4,985 4.3 0.0
Exports 22,186 23,902 26,048 29,099 32,470 33,740 11.6 3.9
Net trade 16,962 18,921 21,427 24,317 27,485 28,755
Consumption 18,236 17,256 15,891 15,357 16,305 16,293 6.2 -0.1
Russia accounts for around 87% of total sawn softwood Russian exports to Europe also increased in 2017 with
production in the CIS region. Over the period 2013-2018 deliveries to the three largest markets (Estonia, Finland and
the region added almost 10 million m3 to production. Germany) between 500,000 and 600,000 m3.
The region is clearly extremely export-oriented due to the
amount of forest resources and relatively low population. Regarding Belarus, investments to add capacity and
Exports have been growing throughout the last 5 years and efficiency have been taking place over the last couple of
the trade surplus keeps increasing. As a result of a stronger years. It seems that the strong limitations on export of
ruble, the sawmill industry margins in Russia shrank. logs have helped the local industry. According to EUWID,
Belarusian exports of softwood lumber keep increasing.
Russia is continuing to take advantage of the booming Having grown 55% in 2017 compared to 2016, for 2018 the
Chinese demand. According to the UNECE/FAO “the export Belarusian Ministry of Forestry forecasted a further 30%
volume of Russian sawn softwood set a new record in 2017 growth to around 3 million m3. Some consolidated data
of 28.0 million m3 (+10%, year-on-year). This was the highest until Q3 2018 are available: in the period Jan-Sep 2018,
growth rate in 12 years (export sales had increased by 17% Belarusian exports of softwood lumber increased by 56%
in 2005, year-on-year, to 14.78 million m3). Sales grew by an to 2.52 million m3 compared to the corresponding period
average of 5.6% per year in 2006-2016. Export growth was due of 2017. Of this, 2.1 million was exported to the EU with
largely to China, which was the largest consumer of Russian Germany, Latvia and Lithuania remaining the main markets:
sawn softwood in 2017, increasing purchases by 20% (year- they all imported slightly less than 500,000 million m3. The
on-year), to 16.1 million m3”. Growth in exports to China have increase was especially noticeable in Latvia and Lithuania.
been supported mostly by the establishment of new sawmills
and ramp up of existing production capacities. Russian Regarding Ukraine, production seems to be at around 2.9
exports were set to be on the rise also in 2018: Timber-online million m3 in 2017, an increase of 400,000 m3 compared with
reports that between in the period Jan-Aug 2018, Russia 2016, though the 2017 data are estimates. Ukraine, in spite
exported 20 million m3 of softwood lumber. Compared to the of a relatively large population of around 45 million people,
same period of last year, the growth rate is 7%. The largest consumes just around 300,000 m3, thus having one of the
increases were registered for neighbouring countries. Exports lowest sawn softwood consumption pro capita in Europe.
to China were up 6% to 11.5 million m3 (Source: https://www. The remainder of Ukraine production is exported to Europe
timber-online.net/schnittholz/2018/10/softwood-lumber- and, increasingly, to China.
exports-russia-january-till-august-2018.html).
39
3.2.3 North America – Sawn Softwood

Table 3.10: Sawn softwood main indicators, North America, 2013-2018 (1,000 m3)
North 2013 2014 2015 2016 2017 2018 17/16 18/17
America
Production 92,475 95,694 99,153 103,788 105,759 105,351 1.9 -0.4
Imports 20,287 21,796 24,011 28,031 27,436 27,600 -2.1 0.6
Exports 30,680 31,984 32,517 35,413 33,965 33,421 -4.1 -1.6
Net trade 10,393 10,189 8,506 7,382 6,529 5,821
Consumption 82,083 85,506 90,648 96,405 99,230 99,530 2.9 0.3
Production in North America has been healthily growing for the trade tensions with China and general uncertainty at
a number of years in the five years to 2017 on the back of the end of 2018 sent jitters down the spine of markets: the
strong consumption. 13 million m3 have been added over US stock exchange recorded a bad end of the year. Based
the period 2013-2017. Production is strong on the back of on all these elements, while growth in the lumber market
lively markets: consumption increased by around 20 million is expected also in 2019, there is much more uncertainty on
m3 over the least five years; net trade surplus has massively the positive outlook as there was for 2018.
shrunk with imports increasing faster than exports.
Regarding trade, US sawn softwood exports increased by
US sawn softwood output was 57.6 million m3 in 2017, up 4.0% in 2017, to 2.9 million m3, with the largest volumes
by 3.5% over 2016. Production gains were highest in the directed to Canada (502,000 m3) and Mexico (490,000 m3).
US South (+5.1%), followed by the Midwest and Northeast Imports to the US are predominantly from Canada (more
regions (+4.2%) and the US West (+3.0%). Output figures than 95%), but European countries such as Sweden and
were strong on the back of brisk demand. US softwood Germany have seen their deliveries to the US soar.
lumber consumption has been rising steadily since 2009
from increasing housing starts, repair & remodelling, and Canadian sawn softwood production was unchanged
overall strong demand (Russ Taylor, 2018). The UNECE/FAO in 2017, at 48.2 million m3. Canadian softwood lumber
reports that “Demand in North American sawn softwood production is not projected to increase in the medium-term
markets increased steadily in 2017 and the first half of 2018. as the supply of logs will not be increasing. A decades-long
US housing starts continued to improve but at a slower rate spat with the U.S. over lumber is starting to burn Canadian
than in previous years, reaching 1.2 million units in 2017 (up producers. While the first half of 2018 was marked by record
by 3.0% compared with 2016; US Census Bureau, 2018).” prices, the picture now seems less rosy. Prices have plunged
Single-family housing was on the rise (+9%) whereas multi- 47% from their highs in May, and could fall another 15%
family housing fell by 10%. Single-family housing consumes in 2019 amid tepid housing starts in the U.S. Meanwhile,
three times as much softwood lumber than multi-family Canadian producers are paying average tariffs of more than
housing. In 2018 housing starts were still strong, but there 20% on timber shipments to the U.S., their biggest customer.
was mixed news in the second part of the year. The National The end of the nine-year US–Canada Softwood Lumber
Association of Home Builders has estimated the full-year Agreement in mid-October 2015 resulted in an 18-month
total for single-family starts in 2018. The Washington-based window of duty-free Canadian lumber exports to the US.
lobby group projects last year’s starts came to 876,000, a 3% Preliminary countervailing duties on Canadian lumber came
increase over 2017. While there are signs of slowdown in the into effect in late April 2017 and antidumping duties in late
market, production is still expected to grow by around 3% in June 2017. The ruling on injury from the U.S. International
2019, thanks once again to the US South (Marc Brinkmeyer, Trade Commission came into effect in December 2017,
International Softwood Conference 2018). A major which means that final countervailing (CVD) and anti-
hindrance is housing construction labour shortages. The dumping duties (AD) on Canadian lumber shipments to
broader economic context is difficult to gauge. While the the US are in effect as of that date. The combined CVD/AD
economy still looks strong and jobs are still being created, duty paid by most Canadian exporters is 20.23% (Random
40
Lengths, January 2018). A new softwood lumber agreement huge, despite recent trade tensions, B.C. forestry executives
has yet to be negotiated but at present Canadian producers say (Random Lenghts, January 2019). However, in 2018
are looking at other export markets with growing interest, Canada exports of softwood lumber to China declined by
particularly in the Western state of British Columbia (B.C.). 15% (Forest Executive Advisors, February 2019), which is
B.C. lumber producers are bracing for a tough 2019 amid partly due to strong competition from Russia. Canadian
concerns over Canada-China trade, the U.S. housing market exports of softwood lumber slightly declined in 2017 and in
and American tariffs on Canadian softwood. The long-term early 2018 they were expected to decline by 1-2%.
opportunity for boosting lumber exports to China remains
3.2.4 Global Focus and Extra Unece region – Sawn Softwood
Table 3.11: World largest producers, exporters and importers of sawn softwood, 2017, m3
Production Exports Imports
United States of America 57,600,000 Canada 31,075,582 United States of America 26,695,038
Canada 48,159,258 Russian Federation 27,971,388 China 25,054,522
China 38,328,000 Sweden 13,110,654 United Kingdom 7,079,193
Russian Federation 37,819,636 Finland 9,357,517 Japan 6,124,313
Germany 22,050,255 Germany 7,519,050 Germany 4,738,011
Sweden 18,310,000 Austria 5,449,450 Italy 4,201,914
Finland 11,700,000 Chile 3,099,737 Egypt 4,005,326
Austria 9,439,000 United States of America 2,889,844 Netherlands 2,825,200
Japan 8,606,000 Latvia 2,878,126 Republic of Korea 2,495,578
Brazil 8,600,000 Ukraine 2,611,000 France 2,445,403
Chile 8,025,300 Brazil 2,299,373 Uzbekistan 2,164,215
France 6,604,000 Belarus 2,295,700 Algeria 2,148,000
Turkey 5,604,800 Czechia 1,827,295 Austria 1,751,480
Australia 4,577,568 New Zealand 1,824,060 Mexico 1,588,000
Poland 4,570,000 Romania 1,259,464 Denmark 1,535,000
New Zealand 4,234,000 Belgium 1,078,000 Saudi Arabia 1,532,000
Czechia 4,070,000 Estonia 976,997 Belgium 1,481,000
Romania 4,043,000 France 886,857 Estonia 1,221,940
United Kingdom 3,728,180 Ireland 803,025 Turkey 1,081,000
Latvia 3,283,766 Poland 730,151 Morocco 1,060,000
Source: FAO 2018 and EOS re-elaboration
Outside the UNECE area, the largest producer remains China. which is expected to push up consumption of wood
China’s production sharply increased in 2017 compared products. The Chinese consumption market remains strong,
with 2016 (38.5 million m3 vs 34 million in 2016) on the back but observers believe that China will attempt to become
of a strong construction industry. The Chinese economy more and more independent from imports (International
is expected to somewhat slow down in the coming years: Softwood Conference, 2018). Imports soared again in 2017
growth rates of GDP are set to hover around 6-7%, while to 25 million m3 (vs 15 million m3 in 2015 and 21 in 2016). But
in the previous decade they reached double-digit figures. in 2018 there was a massive slowdown as figures presented
However, many observers reckon that government policies at the International Softwood Conference 2018 by Mathias
are more and more geared to foster domestic consumption, Fridholm show:
41
Table 3.12: China sawn softwood imports, seemed stable in 2017 at around 8.6 million m3. Japan
Jan-Jul 2018, million m3 imports of sawn softwood reached 6.1 million in 2017,
Rank Country Volume Market Share slightly above 2016. While Japanese long-term demographic
millions (m3)
prospects are not bright, in the short-term the Japanese
1 Russia 9.98 +6
market remains a reliable destination for many exporters all
2 Canada 2.64 -20%
3 Finland 0.69 -36%
over the world with a stable political context and traditional
4 Sweden 0.44 -19% passion for building with wood: wooden housing starts
5 U.S.A 0.43 +38% traditionally make up a relevant share – in 2017 their share
Other 0.68 +18% was expected to be around 57%.
Total 14.9 -3%
Source: International Softwood conference 2018 The Middle East North Africa (MENA) area, and especially
Egypt and Algeria, remain very relevant sawn softwood
China’s imports from Russia have consistently grown in the importers. Algerian imports were held back in 2017 because
first part of 2018 reaching almost 10 million m3 (+6%). An of a license system for importers which was in place in the
interesting development has been taking place in Ukraine second part of the year. The system was discontinued at the
which has seen its imports to China increase by 305% to beginning of 2018 and shipments sharply increased as a
235,000 m3 in Jan-Jul 2018. Scandinavian producers are result. Egypt was in 2017 the seventh largest world importer
instead struggling to keep up with 2017 record exports level of sawn softwood with 4 million m3 (vs 4.4 million in 2016).
to China. Currency difficulties, trade tensions and Chinese Ibrahim Elshal at the International Softwood Conference
legislation aiming at fostering development more inland 2018 showed that in the period Jan-Jul 2018 imports were
are some of the contributing factors which are holding back 4% up vs Jan-Jul 2017. The economic context was foreseen
European producers in China. Chinese imports of Finnish to be more stable at the beginning of 2019 – at least in the
softwood lumber declined by 36% and of Swedish softwood short-term – compared to the turmoil of the previous years,
lumber declined by 19%. while a young and dynamic population in need of housing
ensures that the long-term market potential of Egypt
Preliminary figures for the whole year 2018 regarding China remains impressive.
imports of sawn softwood are available. According to Forest
Economic Advisors, China’s total lumber imports in 2018 The only significant exporters of sawn softwoods outside
showed a small decrease of 2% as compared to 2017. China’s the UNECE region in 2017 were Chile, Brazil, New Zealand
total lumber imports (softwood and hardwood) in 2018 and Australia (in descending order, by volume). The UNECE/
were 36.7 million m3 - 24.9 million m3 were softwood (-1% FAO reports that: “Chile’s export markets are diversified, with
as compared to 2017) and 11.9 million m3 were hardwood significant volumes shipped to Asian, Latin American and
(-3%).The largest softwood lumber importing countries to Middle Eastern markets. Brazil’s exports of sawn softwoods
China were Russia (63% share), followed by Canada (17%), continued to increase strongly in 2017 in response to
Finland (5%), Sweden (3%) and Chile (3%). The largest sustained sawn softwood demand in the US. New Zealand’s
increases in softwood lumber imports in 2018 vs. 2017 were major markets in 2017 were predominantly in the Asia-
Russia (+10%), Brazil (+8%) and Chile (+4%). Conversely, Pacific region – China, the US, Australia, Viet Nam, Thailand
moderate declines were recorded, led by Finland (-32%), and the Republic of Korea (in descending order, by volume)”.
Germany (-24%), USA (-23%), Sweden (-22%) and Canada
(-15%). The three largest softwood importers - Russia,
Canada and New Zealand - accounted for 66% of China’s
softwood log imports and 81% of China’s softwood lumber
imports. For further information on China, see the Special
Focus dedicated to China and other East Asian markets
authored by Woodstat.
© Shutterstock
Japan is the second largest producer and importer outside

the UNECE region. Japanese sawn softwood production
42
3.3 Sawn Hardwood

The table below shows the main market indicators for the production is somewhat slowly increasing, with production
last six years in the UNECE region. Overall at UNECE level inching along by 0.5-0.6% a year over the last few years.
Table 3.13: Sawn hardwood main indicators, UNECE Region, 2013-2018 (1,000 m3)
UNECE region 2013 2014 2015 2016 2017 2018 17/16 18/17
Production 37,505 39,834 41,187 41,468 41,730 41,931 0.6 0.5
Imports 5,984 6,556 6,591 6,586 6,402 6,544 -2.8 2.2
Exports 9,755 11,421 11,917 12,504 13,708 13,857 9.6 1.1
Net trade 3,771 4,865 5,327 5,918 7,305 7,313
Consumption 33,734 34,969 35,861 35,550 34,424 34,618 -3.2 0.6
Consumption (which is always calculated as apparent softwood markets, relatively stagnating sawn hardwood
consumption: production + imports – exports) of sawn markets) are continuing, at least in the short-term.
hardwood in the UNECE region was 34.4 million m3 in 2017,
a 3% drop compared with 2016. In general, it looks like The UNECE region has a trade surplus which has increased
that trends apparent in the last few years (expanding sawn over the years to surpass 7 million m3 in 2017.
3.3.1 Europe – Sawn Hardwood

Table 3.14: Sawn hardwood main indicators, Europe, 2013-2018 (1,000 m3)
Europe 2013 2014 2015 2016 2017 2018 17/16 18/17
Production 12,953 13,043 13,631 13,986 13,952 13,979 -0.2 0.2
Imports 4,396 4,712 4,789 4,918 4,924 5,036 0.1 2.3
Exports 4,743 5,545 5,843 5,835 6,308 6,339 8.1 0.5
Net trade 347 833 1,054 917 1,383 1,303
Consumption 12,606 12,210 12,577 13,068 12,569 12,676 -3.8 0.9
European production of sawn hardwood has been quite flat A continuing shortage of hardwood supply caused by logs
over the last few years, at levels below the peak achieved in export outside the EU is exacerbated by heavy dependence on
2006-2007 before the global economic crisis. In the EU it did European oak. Belgium is another country which has suffered
grow by 0.9% in 2018. An interesting dynamic is taking place in from raw material exports. Thirty percent of hardwood sawmills
Croatia. Production in the Balkan country has increased by 42% in Belgium, France and Germany have shut down over the last
in the five years to 2017 to 1.3 million m3. Turkey remains the ten years (Indufor, 2017).
largest producer of the area with an increasing production in
2017 of 2.5 million m3. Romania is the second largest European Consumption of sawn hardwood is slowly growing. Turkey
producer, with production set to remain stable around 1.6 is by far the largest national market of the area, and it is
million m3 in 2018 and 2019. Romania has been confronted fed almost entirely by internal production. In the EU28
with limited availability of beech, its most important hardwood consumption has been growing at an unremarkable pace,
sector. France and Germany remain important producers though markets are definitely livelier than a few years back.
with around 1.5 and 1.1 million in 2018 though production is Overall in 2018 the spirit improved when compared to a few
being held back by a shortage of raw materials (particularly in years ago: demand dynamics are more positive and France
France in the oak sector and in Germany in the beech sector). reports investments in the modernization of sawmills.
43
Country by country reports also dealing with hardwood production are available in chapter 4.
The sawn hardwood markets are connected to the level of furniture manufacturing and wood-joinery activity. Below a brief
analysis of those is provided.
Figure 3.1: Index of Furniture Manufacturing activity, selected European countries (Index 2015=100)
120
115
110
105
2014
100
2015
95
2016
90
2017
85
2018
80
75
70
Belgium Germany France Italy Latvia Romania
Source: Eurostat 2019 and EOS re-elaboration
The figure above shows the Eurostat calendar adjusted index Belgium, Germany and France are relatively stagnating, with
of furniture manufacturing (index 2015=100). Overall, at EU a slight drop in 2018. Italy seems an exception, but it is mostly
level, the intensity of activity kept slowly getting higher until recovering ground from many years of decline after the global
2017 with 2018 showing a relative stagnation, albeit with economic crisis. The UK is doing relatively well. Scandinavian
significant local differences. In Central-Eastern European markets such as Sweden and Denmark are recovering,
countries the sector is growing, while in the core EU countries though they remain below the 2010 level.
Figure 3.2: Index of Wood-Joinery Activity, selected European countries (Index 2015=100)
108
106
104
102
Germany
100
98 France
96 Italy
94
92
90
2014 2015 2016 2017 2018
Source: Eurostat 2019 and EOS re-elaboration
44
The figure above, which is regretfully available only for a few increased, by 10% to €545 million. A significant amount of
countries, represents the wood-joinery activity over the last tropical sawnwood arrived into the EU from Cameroon in
few years. Germany is showing a steadier growth pattern the third quarter of 2018, taking the total import from that
over the years, whereas both France and Italy are spikier. country in the first nine months to 186,500 metric tonnes,
In 2018 the wood-joinery activity grew in Germany but almost exactly equivalent to the same period in 2017.
declined in 2018. Moreover, Germany suffered a much less Meanwhile tropical sawnwood imports from nearly all
significant decline in the aftermath of the global economic other leading suppliers were stronger in the first 9 months
crisis. of 2018 compared to the same period last year, including
from Malaysia (+14% to 81,600 metric tonnes), Brazil (+20%
Another important market for the sawn hardwood sector is to 73,700 metric tonnes), Gabon (+19% to 70,800 metric
the flooring market. After four years of growth, preliminary tonnes), Congo (+6% to 34,800 metric tonnes), Indonesia
figures point to a 2% decline of European parquet production (+82% to 12,700 metric tonnes), Ghana (+8% to 11,000
in 2018 compared to 2017. More information is available in metric tonnes), Democratic Republic of Congo (+7% to 9,700
the special focus on the European Parquet Market. metric tonnes) and Myanmar (+64% to 6,900 metric tonnes).
These gains offset declining imports from Côte d’Ivoire
As far as trade is concerned, the net trade surplus has been (-9% to 21,000 metric tonnes) and Suriname (-20% to 4,100
expanding over the last couple of years. Exports by Croatia, metric tonnes).
the leading exporter among the EU countries, have grown in
2017 to 1 million m3. Regarding EOS countries, difficulties in In the first nine months of 2018, tropical sawn hardwood
exports markets were observed in 2018, particularly in the imports increased 8% to 185,000 metric tonnes in Belgium,
Asian markets (mainly China). bolstered by strong growth in the third quarter of the year,
and also increased in the Netherlands (+14% to 81,600
Some recent data regarding sawn tropical hardwood are metric tonnes), France (+20% to 73,700 metric tonnes),
available: according to the International Tropical Timber Italy (+19% to 70,800 metric tonnes), and Germany (+6% to
Organization, latest available statistics (to September 2018) 22,100 metric tonnes). These gains offset a 20% decline to
show that tropical sawn hardwood imports rose this year 38,300 metric tonnes in the UK, a 15% fall to 25,800 metric
on the back of some years of significant decline. Despite tonnes in Spain and a 9% decline to 16,300 metric tonnes in
a slow start to the year, EU imports of tropical sawnwood Portugal. Export to Belgium are mainly redirected to other
were 539,000 metric tonnes in the first nine months of 2018, bigger consuming countries. (Itto Market Report, December
9% more than the same period in 2017. Import value also 2018).
© Shutterstock
45
3.3.2 CIS region – Sawn Hardwood

Table 3.15: Sawn hardwood main indicators, CIS region, 2013-2018 (1,000 m3)
CIS 2013 2014 2015 2016 2017 2018 17/16 18/17
Production 3,099 3,301 3,233 3,381 3,668 3,772 8.5 2.8
Imports 101 103 84 111 109 109 -2.2 0.0
Exports 1,080 1,413 1,988 2,176 2,314 2,314 6.4 0.0
Net trade 979 1,310 1,905 2,064 2,205 2,205
Consumption 2,120 1,991 1,328 1,317 1,463 1,567 11.1 7.1
CIS sawn hardwood production has been trending upward reach almost 3 million m3 while consumption should hover
over the last few years. It reached a figure just short of 3.7 around 1.1 million m3.
million m3 in 2017 and a further increase was on the cards for
2018. Of this almost 2.8 million m3 was produced in Russia The Ukrainian sawn hardwood sector and the general
(+10% vs 2016). The UNECE/FAO reports that “the Russian economy have been hampered by the ongoing conflict in the
Federation exported 1.7 million m3 of sawn hardwood in east of the country. Local consumption of sawn hardwood
2017, up by 11.7% over 2016. Exports to China were 1.27 remains very low, thus Ukraine exports abroad most of its
million m3, an increase of 10.2% over 2016 and the largest production, its main markets being Eastern Member States
quantity of Russian sawn hardwood ever shipped to China”. of the EU, such as Romania, Poland and Lithuania.
Birch is the dominant species, accounting for almost half of
Russian sawn hardwood exports. As per current projections In Belarus both production and exports of sawn hardwood
and forecasts, production and consumption of sawn are declining. In 2017 production was around 210,000
hardwood were set to grow in 2018, with the expansion set m3 down from 275,000 m3 in 2015. Exports stayed below
to continue even in 2019. In 2019 production is expected to 100,000 m3, down from 150,000 m3 in 2015.
3.3.3 North America – Sawn Hardwood

Table 3.16: Sawn hardwood main indicators, North America, 2013-2018 (1,000 m3)
North 2013 2014 2015 2016 2017 2018 17/16 18/17
America
Production 21,453 23,490 24,323 24,101 24,110 24,179 0.0 0.3
Imports 1,488 1,741 1,718 1,557 1,369 1,399 -12.1 2.2
Exports 3,933 4,463 4,086 4,493 5,086 5,204 13.2 2.3
Net trade 2,445 2,722 2,368 2,936 3,717 3,805
Consumption 19,008 20,768 21,955 21,165 20,393 20,374 -3.6 -0.1
In North America both production and consumption of production in North America has caused a large reduction
sawn hardwood have been trending upwards in the period in the number of sawmills and in production capacity. Most
2013-2018. Over the 5 years to 2017, US Production went of the mills built since the global financial crisis are for the
up by 13% to 22.8 million m3, while production in Canada manufacture of staves and industrial products. Indeed, with
declined 4% to 1.3 million m3. After plummeting as a result stronger competition from China and Viet Nam, the North
of the global economic crisis of one decade ago, North American furniture industry declined, and this took a heavy
American production has gone up steadily since 2009 but toll on hardwood production. The UNECE/FAO reports that
was still 3.6 million m3 less in 2017 than in 2006, the peak for “historically, North American sawn hardwood consumption
home construction in the US. The decline in sawn hardwood in appearance applications exceeded consumption in
46
industrial uses by a wide margin. Since 2007, however, Regarding trade, exports are the only component of the North
sawn hardwood consumption has been higher for industrial American sawn hardwood market that has exceeded levels
uses than for appearance applications […] North American achieved before the global financial crisis. In a similar fashion
consumption of sawn hardwood in appearance applications to imports, most Canadian and US exports before the global
will be influenced in the next decade by factors such as financial crisis were bilateral. Growth in exports since 2009,
growth in home construction and remodelling, substitute however, has been mainly in markets outside North America.
products, and disposable income. Home construction and Both Canadian and US exports have increased 29% in the five
remodelling is important, but a wide range of materials years to 2017, respectively to almost 600,000 m3 and 4.5 million
can be used in the production of flooring, millwork m3. While the US remains the largest market for Canada, China
and cabinets, with sawn hardwood generally the most is consistently gaining market share accounting for around
expensive”. Income growth and consumer preferences will 20% of Canadian exports in 2017. US exports to China and Viet
influence the consumption of sawn hardwood in the future. Nam in 2017 accounted for 64% of total exports, in value terms.
In 2017 Canadian sawn hardwood consumption declined The only relevant trade flow of sawn hardwood from Europe to
by 230,000 m3 (-14.1%) and in the US by 542,000 m3 (-2.8%). the US is German exports to the US, which in 2017 was around
70,000 and in 2018 looked set to slightly increase.
3.3.4 Global Focus and Extra Unece region – Sawn Hardwood

Table 3.17: World largest producers, exporters and importers of sawn hardwood, 2017, m3
China 47,696,000 United States of America 4,504,674 China 12,346,712
United States of America 22,774,000 Thailand 4,380,987 Viet Nam 1,618,099
Viet Nam 6,000,000 Malaysia 2,162,635 Thailand 914,039
Brazil 5,997,000 Russian Federation 1,678,327 United States of America 723,436
India 4,889,000 Croatia 1,022,079 Italy 712,912
Indonesia 4,169,000 Germany 795,405 Canada 645,353
Thailand 3,700,000 Ukraine 754,000 Egypt 562,553
Malaysia 3,228,000 Cameroon 670,000 United Kingdom 501,065
Russian Federation 2,764,421 Romania 645,211 India 459,907
Turkey 2,511,200 France 596,403 Belgium 430,374
Nigeria 2,000,000 Canada 581,234 Mexico 413,289
Romania 1,600,000 Gabon 549,169 Germany 406,172
Myanmar 1,530,400 Indonesia 523,000 Netherlands 345,600
France 1,503,000 Latvia 417,989 Poland 336,386
Argentina 1,502,000 Viet Nam 370,583 France 276,903
Croatia 1,390,566 Brazil 352,940 Philippines 271,672
Canada 1,336,000 Belgium 343,000 Taiwan 248,534
Germany 1,117,425 Philippines 330,133 Japan 208,272
Cameroon 1,000,000 Bosnia and Herzegovina 324,360 South Africa 185,940
Pakistan 919,000 Ghana 297,380 Spain 185,119
Source: FAO 2018 and EOS re-elaboration, data are estimates
47
China is by far the world’s largest hardwood producer. The by 25% in volume and by 32% in value. The UNECE/FAO
combined production of the second, third, fourth, and fifth reports that: “Viet Nam is an important emerging market
largest producers is smaller than China’s production. China for sawn hardwood, although imports declined in 2015
added in 2017 more than 4 million m3 and at almost 47.7 and 2016, with tropical sawnwood accounting for most of
million m3 its production was more than one third of the the decline (data on Viet Nam’s sawn hardwood imports
total global output. Chinese production mainly services for 2017 were unavailable at the time of publication). The
an internal market hungry for sawn hardwood. With Lao People’s Democratic Republic supplied 63% of Viet
the exception of the United States, the most important Nam’s tropical sawn hardwood imports in 2015, but that
hardwood producers are all mainly tropical hardwood country’s supply was affected by an export ban in May 2016.
producers, notably Vietnam, Brazil, India, Indonesia, In contrast to China, Viet Nam’s sawnwood imports are used
Thailand, and Malaysia. predominantly in products destined for export. Thailand is
the third-largest importer of sawn hardwood outside the
China is also – and by far – the world’s largest importer, UNECE region, importing mainly structural-grade material
accounting for a whopping 48% of the total hardwood from Malaysia.”
imports at global level. China’s sawn hardwood imports
rose by 15% in volume terms in the first quarter of 2018, Data taken from the FAO Database and the UNECE/FAO Forest
year-on-year, with tropical sawn hardwood imports up Products Annual Market Review, unless otherwise stated.
3.4 Overview of the wood energy markets

In many EU Member States, wood was the most important (23 million tonnes, of which 32.6% is consumed in the UK,
single source of energy from renewables. Wood and wood 9.1% in Italy, 8.7% in Germany, 8.7% in Denmark and 7.4% in
products accounted for 6.0 % of the total energy consumed Sweden). In some Member States, the consumption of wood
within the EU-28 in 2016 (source: Eurostat, Wood as a pellets relies mostly on imports, e.g. the UK (94.7%) and Italy
Source of Energy). The share of wood and wood products (81%). Wood pellets are mostly used in the residential sector
in gross inland energy consumption ranged from over 20 % for heating (in Italy, Austria, etc.) or for electricity production
in Latvia and Finland down to less than 1 % in Cyprus and (in the UK, Austria, etc.).” (Source: JRC, Brief on biomass for
Malta. Wood was the source for more than three quarters energy in the European Union). For more information please
of the renewable energy consumed in Estonia, Lithuania, see below.
Hungary, Latvia, Finland, and Poland. By contrast, the share
of wood in the mix of renewables was relatively low in Cyprus The table on the next page shows the 20 largest world
and Malta (where the lowest share was reported, 4.5 %); this producers, importers and exporters of pellets.
was also the case in Norway (6.4 %). Wood as a source of
energy in France, Italy and Germany stands around 2-3% in
all sources and over 30% in Germany and Italy in renewable
sources (France almost 50%).
The role of wood pellets in generating energy from wood is

important. According to the official UNECE/FAO data released
in January 2019, in 2017 global production of pellets grew
by 14% compared with 2016 to 33.3 million tonnes. Wood
pellets have become an important energy carrier traded on a
large scale and over long distances, due to their high energy
density and stable characteristics. Global production reached
© Shutterstock
29 million tonnes in 2016, of which more than 50% was

produced in the EU. The EU is also the main consumer globally
48
Table 3.18: World largest producers, exporters and importers of pellets, 2017, tonnes
United States of America 6,900,000 United States of America 5,203,981 United Kingdom 6,885,523
Canada 2,700,000 Canada 2,171,504 Denmark 3,089,123
Germany 2,250,000 Latvia 1,620,734 Republic of Korea 2,431,165
Sweden 1,741,000 Viet Nam 1,579,471 Italy 1,792,547
Viet Nam 1,600,000 Russian Federation 1,438,541 Belgium 1,090,921
Latvia 1,517,000 Estonia 1,250,596 Japan 442,517
Russian Federation 1,400,000 Austria 675,367 Austria 403,117
France 1,350,000 Malaysia 526,992 Germany 391,244
Estonia 1,250,000 Portugal 487,779 Sweden 268,948
Austria 1,225,000 Germany 450,741 France 263,863
Republic of Korea 980,000 Lithuania 403,230 Netherlands 244,700
Poland 900,000 Denmark 332,588 United States of America 211,617
China 873,000 Czechia 315,509 Latvia 195,802
Portugal 689,218 Poland 286,980 Slovenia 181,100
Belgium 550,000 Croatia 259,104 Lithuania 117,990
Malaysia 530,000 Ukraine 247,156 Switzerland 91,010
Romania 500,000 Belgium 218,762 Finland 86,787
Brazil 470,900 Belarus 204,700 Serbia 68,000
Brazil 460,875 Sweden 199,650 North Macedonia 66,635
Czechia 450,000 France 190,678 Poland 66,103
Source: UNECE/FAO 2018 and EOS re-elaboration
The US accounts for 21% of global production (6.9 million of global imports with 6.9 million metric tonnes. However, in
tonnes, +0.5 million tonnes vs 2016). Canada is the second 2016 the UK accounted for 43% of global imports. Other very
largest producer (-100,000 tonnes vs 2016). Germany was relevant importers remain Denmark, Italy, and the Republic
the third largest producer with 2.25 million tonnes (+300,000 of Korea. South Korean and Danish imports remarkably
tonnes vs 2016). Europe and North America remain the two increased (by a third in both countries) whereas deliveries
most important regions in terms of production; however, to Italy rose by almost 200,000 tonnes.
production in Vietnam grew again by 20% in 2017 to 1.6
million tonnes (on the back of a 30% rise both in 2016 and Preliminary data for 2018 are available. According to the
2015) Production in the Baltic States of Latvia and Estonia Canadian Biomass Magazine, wood pellet trade in 2018 is
remained high, somewhat rising in 2017 compared with estimated at 23.8 million tonnes, a whopping 26 per cent
2016. increase from 2017’s 18.9 million tonnes.
The US remained the largest exporter in 2017, accounting Industrial pellet demand is estimated at 17.5 million tonnes
for 26% of global exports (5.2 million tonnes, +10% vs 2016); in 2018. FutureMetrics projects that industrial demand will
US south-eastern states are the main export area and they climb to 29 million tonnes in 2023. Nearly 60 per cent of
send most of their shipments to large European importers, this new demand growth is projected to come from Asia,
particularly the UK. The second largest exporter remains with most of the remainder from increased demand in the
Canada, which, with 2.2 million tonnes exported, has seen UK and the re-emergence of a significant industrial pellet
its exports shrink by over 0.2 million tonnes compared with market in the Netherlands.
2016. Latvia remains the third largest exporter, followed by
Vietnam (which has seen a sharp rise of exports), Russia and While industrial pellet markets get the bulk of market
Estonia. As far as imports are concerned, the UK retains the analysts’ attention, heating markets make up a significant
lion share of pellets imports in 2017 as it accounts for 36% amount of total global demand and FutureMetrics forecasts
49
continued strong growth over the next five years. Warm The two figures below, taken from the above-mentioned
winters and low competing fuel prices, particularly for article, analyse, respectively, the global demand pellets
heating oil, slowed pellet heating demand growth in North imports from 2013-2018 and the global pellet demand since
America and Europe over the last few years. While a recent 2010 with projections up until 2023. Growth is impressive:
fall in oil prices raises some concern, for the most part analysts expect the global pellet demand to be more than
pellets still enjoy a significant cost savings over fossil-based three times as high as demand in 2010.
heating fuels in Europe and, with the notable exception of
natural gas in the U.S., North America as well (https://www.
canadianbiomassmagazine.ca/pellets/2019-wood-pellet-
markets-outlook-7190)
Figure 3.3: Global Pellet Imports, 2013-2018
Source: Historical, Argus; Forecast, Future Metrics
Figure 3.4: Global Pellet Demand, 2010-2023
Source: Historical, Argus, and European Pellet Council; Forecast by Future Metrics
50

Special Focus:
China’s
China’s
China’s importimport of softwood
import
of lumber
of lumber
softwood at a at a
softwood
high level at a high level
lumber
high level

China- -Softwood
China Softwood lumber
lumber
China - Softwood lumber
Once again, we can note that China as a softwood lumber importer ensured a balance in the
Once again, we can note that China as a softwood lumber importer ensured a balance in the
Once again, we can note that China as a softwood Softwood lumber import in China during 2018 amounted
market. In several countries the import of softwood lumber is still significantly below the
market. In several countries the import of softwood lumber is still significantly below the
lumber importer ensured a balance in the market. In to 24.4 million m3 which means a decrease by just 2%
pre-financial crisis level. The index of completed housing construction (residential, schools,
pre-financial crisis level. The index of completed housing construction (residential, schools,
several countries the import of softwood lumber is still (compared to 2017). It is worth mentioning that import
shops, etc.) in the EU increased by only 1% during 2018 compared to 2017 and as a result we
shops, etc.) in the EU increased by only 1% during 2018 compared to 2017 and as a result we
significantly below the pre-financial crisis level. The during 2007 amounted to only 2.8 million m3. During
noticed only a minor increase in softwood lumber imports. In the U.S. the import entered a
noticed only a minor increase in softwood lumber imports. In the U.S. the import entered a
index of completed housing construction (residential, January-February 2019, import increased by 16%
slower phase as a consequence of lower housing starts and in the Middle East low prices for
slower phase as a consequence of lower housing starts and in the Middle East low prices for
schools, shops, etc.) in the EU increased by only 1% compared to 2018 and the seasonally adjusted trend line
crude oil lowered import of softwood lumber to the lowest level since 2006.
crude oil lowered import of softwood lumber to the lowest level since 2006.
during 2018 compared to 2017 and as a result we noticed is running at a record high level (figure 1).
only a minor increase in softwood lumber imports. In the 3 3
Softwood lumber import in China during 2018 amounted to 24.4 million m
Softwood lumber import in China during 2018 amounted to 24.4 million m which means a which means a
U.S. the import entered a slower phase as a consequence The trend line for import
decrease by just 2% (compared to 2017). It is worth mentioning that import during 2007
decrease by just 2% (compared to 2017). It is worth mentioning that import during 2007 from Russia has stabilized at a
of lower housing starts and
3 in the Middle3 East low prices new top level, when we include the figures for February.
amounted to only 2.8 million m
amounted to only 2.8 million m . During January-February 2019, import increased by 16%
. During January-February 2019, import increased by 16%
for crude oil lowered import of softwood lumber to the The import from Canada during January-February 2019
compared to 2018 and the seasonally adjusted trend line is running at a record high level
compared to 2018 and the seasonally adjusted trend line is running at a record high level
lowest level since 2006.
(figure 1). (figure 1). increased by an impressive 65%, but the volume is still
Figure 1: Figure 1:
Figure 1:

The trend line for import from Russia has stabilized at a new top level, when we include the
figures for February. The import from Canada during January-February 2019 increased by an
The trend line for import from Russia has stabilized at a new top level, when we include the
impressive 65%, but the volume is still limited compared to previous years. Import from
figures for February. The import from Canada during January-February 2019 increased by an 51
impressive 65%, but the volume is still limited compared to previous years. Import from
As can be seen in figure 2 Russia totally dominates as a supplier with a monthly export of
about 1.3 million m3. Eight years ago, Canada was the main supplier. In April 2017 a
countervailing duty for Canadian sawmills was imposed by the U.S. Department of
Commerce. Leading Canadian producers have announced they will increase export to China,
and we can already see it in the trend line.

Figure 2:
Figure 2:

limited compared to previous years. Import from Europe A growing population and massive migration are still the
A growing population and massive migration are still the main factors for softwood lumber
increased by 4% during January-February 2019 and the main factors for softwood lumber consumption and will
seasonally adjusted trend has entered a clearly positive support a high demand for lumber. The furniture industry
consumption and will support a high demand for lumber. The furniture industry is also an
trend (figure 2). is also an important consumer of softwood lumber with
important consumer of softwood lumber with a positive forecast. We can also add a growing
interest in using lumber as a nature friendly material. a positive forecast. We can also add a growing interest in
As can be seen in figure 2 Russia totally dominates as a using lumber as a nature friendly material.
3
Russia was the main supplier and delivered 15.1 million m
supplier with a monthly export of about 1.3 million m .3 during 2018 (+7% compared to
2017). This means a market share of 62%. Second largest supplier was Canada with a total
Eight years ago, Canada was the main supplier. In April Russia was the main supplier and delivered 15.1 million
3
export of 4.2 million m
2017 a countervailing duty for (-17%) and a market share of 17%. The import from Europe (excl.
Canadian sawmills was m3 during 2018 (+7% compared to 2017). This means
Russia) decreased by 13% (table 1).
imposed by the U.S. Department of Commerce. Leading a market share of 62%. Second largest supplier was
Canadian producers have announced they will increase Canada with a total export of 4.2 million m3 (-17%) and
export to China, and we can already see it in the trend a market share of 17%. The import from Europe (excl.
line. Russia) decreased by 13% (table 1).

Table 1: China’s import of softwood lumber (1 000 m )
3
2018 2017 2018/2017

Russia 15 067 14 124 +7%
Canada 4 150 4 972 -17%
Europe (excl. Russia) 2 792 2 3 214 -13%
Chile 741 715 +4%
U.S. 531 697 -24%
New Zealand 367 441 -17%
Other 794 833 -5%
Total 24 442 24 996 -2%
Source: Chinese Customs
52
Table 2: China’s import of softwood lumber from main European exporters (1 000 m3)
2018 2017 2018/2017
Finland 1 142 1 683 -32%
Sweden 708 896 -21%
Ukraine 506 123 +311%
Germany 153 205 -25%
Baltics 133 187 -29%
Belarus 80 33 +142%
Austria 70 87 -20%
Total 2 792 3 214 -13%
Source: Chinese Customs
Figure 3:
Figure 3:

The very strong increase of shipments from Ukraine and Belarus have of course changed
Finnish export to China decreased by 32% to 1.1 million m3 European exporters (Russia excluded) dramatically
market shares for European exporters (Russia excluded) dramatically (smoothed time series)
during 2018 (compared to 2017). Shipments from (smoothed time series) (figure 4).
(figure 4).
Sweden and Germany decreased by 21% and 25%
respectively. However, other European exporters – The rapidly increasing import in China is of course closely
Ukraine and Belarus increased the export at a very high
Figure 4: linked to the construction sector where residential
rate. Ukraine was the top performer with an increase of building is the main sector, but there is also a strong
311% to 506,000 m3 during 2018. Just five years ago the demand for furniture and other further processed goods.
figure was approximately 20,000 m3. Import from Belarus In 2018, the amount of started housing surpassed the
increased by 142% to 80,000 m3 (table 2). The lowered amount of sold housing slightly (figure 5). Compared to
import from Finland and Sweden during 2018 are clearly the situation a few years ago the floorspace for sale is
shown in figure 3. much lower (figure 6). This stabilizes the building industry
long term and the ongoing urbanization is an important
The very strong increase of shipments from Ukraine factor. Credit is tighter and the government will certainly
and Belarus have of course changed market shares for closely monitor the housing market.
53

The very strong increase of shipments from Ukraine and Belarus have of course changed
market shares for European exporters (Russia excluded) dramatically (smoothed time series)
(figure 4).

Figure 4:
Figure 4:

The rapidly increasing import in China is of course closely linked to the construction sector

where residential building is the main sector, but there is also a strong demand for furniture
The rapidly increasing import in China is of course closely linked to the construction sector
and other further processed goods. In 2018, the amount of started housing surpassed the
where residential building is the main sector, but there is also a strong demand for furniture
amount of sold housing slightly (figure 5). Compared to the situation a few years ago the
and other further processed goods. In 2018, the amount of started housing surpassed the
floorspace for sale is much lower (figure 6). This stabilizes the building industry long term
amount of sold housing slightly (figure 5). Compared to the situation a few years ago the
and the ongoing urbanization is an important factor. Credit is tighter and the government
floorspace for sale is much lower (figure 6). This stabilizes the building industry long term
will certainly closely monitor the housing market.
and the ongoing urbanization is an important factor. Credit is tighter and the government

will certainly closely monitor the housing market.
Figure 5:

Figure 5:
Figure 5:
4

54


Figure 6:
Figure 6:
China – Softwood logs

Figure 7:
Figure 7:
China – Softwood logs
Total import of softwood logs in China has increased since 2009 and was during 2018 and
the beginning of 2019 running at just over 3 million m³ on a monthly basis (figure 7). The
import during 2018 was 39.7 million m³ (+9% compared to 2017).

Softwood log import from Russia has changed dramatically during the last few years with a
complete switch from logs to lumber which is produced at several newly built sawmills in 55
Asia (figure 8).

Softwood log import from Russia has changed dramatically during the last few years with a
complete switch from logs to lumber which is produced at several newly built sawmills in
Asia (figure 8).

Figure 8:
Figure 8:

As can be seen in figure 9 import of logs from Russia has a rapid falling trend but import
from New Zealand is running at a record high level. Over 50% of sawlog harvest in New
Zealand is exported and that is a serious problem for local sawmills. Log prices in New
Zealand are at a high level, but some reductions are reported in the first quarter 2019. The
trendlines for import from Canada and the U.S. are falling, but Australia has a quite stable
trend line.
7
Figure 9:
Figure 9:

56
Total import of softwood logs in China has increased As can be seen in figure 9 import of logs from Russia
since 2009 and was during 2018 and the beginning of has a rapid falling trend but import from New Zealand
2019 running at just over 3 million m3 on a monthly basis is running at a record high level. Over 50% of sawlog
(figure 7). The import during 2018 was 39.7 million m3 harvest in New Zealand is exported and that is a serious
(+9% compared to 2017). problem for local sawmills. Log prices in New Zealand
are at a high level, but some reductions are reported
Softwood log import from Russia has changed in the first quarter 2019. The trendlines for import from
dramatically during the last few years with a complete Canada and the U.S. are falling, but Australia has a quite
switch from logs to lumber which is produced at several stable trend line.
newly built sawmills in Asia (figure 8).
Southeast Asia (excl. China and Japan) – Softwood lumber

In Southeast Asia; China and Japan are the main As can be seen in figure 11, European exporters also gain
importers, but many other countries in the region are market shares in this region. The market share for Europe
increasing their import of softwood lumber rapidly. has increased from just over 20% to close to 60% and at
Import from main exporters were in the beginning of the same time the trend has been falling for Canada and
Southeast Asia (excl. China and Japan)
2019 running at a monthly average level of over 400,000
– Softwood lumber
New Zealand. The market share for U.S. is quite stable.
In Southeast Asia; China and Japan are the main importers, but many other countries in the
m3, compared to 140,000 m3 during 2007. The trend line
region are increasing their import of softwood lumber rapidly. Import from main exporters
for import in the region is increasing at a record high level A growing economy and high construction activity in
3
were in the beginning of 2019 running at a monthly average level of over 400,000 m
(figure 10). several countries support a steady increase , in import.
3
compared to 140,000 m during 2007. The trend line for import in the region is increasing at
Like in many other countries there is also a growing
a record high level (figure 10). interest in lumber as an eco-friendly material.

Figure 10:
Figure 10:

As can be seen in figure 11, European exporters also gain market shares in this region. The 57
market share for Europe has increased from just over 20% to close to 60% and at the same
Figure 11:
Figure 11:

A growing economy and high construction activity in several countries support a steady
increase in import. Like in many other countries there is also a growing interest in lumber as
Figure 12:
Figure 12:
an eco-friendly material.
In South Korea industrial investment is falling and many economists predict a continued
falling trend. Regarding housing tougher regulations were imposed in 2018, which have
lowered the activity.
In January 2019 the Minister of housing in India published a report “The global Housing
Technology Challenge” which include environmentally friendly and cost-effective
construction. Regarding construction technologies the report said “Typically, conventional
construction systems, such as the use of brick and mortar, are slow-paced, energy intensive,
dependent on natural resources, and have a large carbon footprint”. According to a new
study by McKenzie, 700 million Indians are getting in to process of urbanization by 2050. As
in China demand for housing is also supported by a rapid urbanization.
South Korea is the main importer when we analyze the softwood lumber import from main
exporters, but the trend entered a falling phase during the second half of 2018. Import in
Taiwan, India and the Philippines are reaching new top levels (figure 12).

58 Total import in the region increased by 5% during 2018 to 4,7 million m3 (compared to
2017). Increased import was seen in Taiwan, India, the Philippines and Thailand. Decreased
Table 3: The Southeast Asian (China and Japan excluded) import of softwood lumber (1 000 m3)
from main exporters
Importer 2018 2017 2018/2017
South Korea 1 520 1 657 -8%
Taiwan 943 787 +20%
India 653 540 +21%
Philippines 574 455 +26%
Pakistan 521 526 -1%
Vietnam 287 296 -3%
Thailand 234 230 +2%
Total 4 732 4 491 +5%
Sources: Eurostat, Russian Customs, USDA, Statistics Canada, Stats NZ, Ukraine Statistics, Beltstat
In South Korea industrial investment is falling and many South Korea is the main importer when we analyze the
economists predict a continued falling trend. Regarding softwood lumber import from main exporters, but the
housing tougher regulations were imposed in 2018, trend entered a falling phase during the second half of
which have lowered the activity. 2018. Import in Taiwan, India and the Philippines are
reaching new top levels (figure 12).
In January 2019 the Minister of housing in India published
a report “The global Housing Technology Challenge” Total import in the region increased by 5% during 2018
which include environmentally friendly and cost-effective to 4,7 million m3 (compared to 2017). Increased import
construction. Regarding construction technologies was seen in Taiwan, India, the Philippines and Thailand.
the report said “Typically, conventional construction Decreased import was noted in South Korea, Pakistan
systems, such as the use of brick and mortar, are slow- and Vietnam (table 3). If we analyze the figures for import
paced, energy intensive, dependent on natural resources, in the region during January 2019 (compared to January
and have a large carbon footprint”. According to a new 2018) imports are increasing in all countries except for
study by McKenzie, 700 million Indians are getting in to Thailand. The largest increase is noted for India (+60%).
process of urbanization by 2050. As in China demand for The import in the region in total during January 2019
housing is also supported by a rapid urbanization. increased by 19%.
Table 4: The Southeast Asian (China and Japan excluded) import of softwood lumber (1 000 m3)
from main exporters
Exporter 2018 2017 2018/2017
Canada 1 212 1 203 +1%
Germany 654 556 +18%
New Zealand 573 579 -1%
Russia 478 479 -
Ukraine 372 211 +76%
U.S. 319 358 -11%
Baltics 302 316 -4%
Austria-Slovenia 264 237 +11%
Sweden 260 262 -1%
Finland 203 213 -5%
Romania 92 76 +21%
Belarus 3 1 +200%
Total 4 732 4 491 +5%
Sources: Eurostat, Russian Customs, USDA, Statistics Canada, Stats NZ, Ukraine Statistics, Beltstat
59
© Shutterstock
Canada is the main supplier to the region and the import lumber is an environmentally friendly material that will
increased by 1% during 2018 (compared to 2017) while help solve the problem with carbon dioxide affecting
the import from Europe (incl. Russia) increased by 5%. countries worldwide. It is created by the nature for the
Germany is the second largest exporter and increased nature.
the volume by 18% during 2018. New Zealand is 3rd as
exporter and their volume decreased by 1% during 2018.
Russia is 4th as exporter and the volume was about the Jenny Wessung, CEO
same in 2018. Ukraine increased the export by 76% during Woodstat AB
2018. The import from U.S. decreased by 11% (table 4). [email protected]
www.woodstat.com
With a rapidly growing economy and heavy investments
in the construction sector, softwood lumber consumption EOS expresses gratitude to Mrs Wessung for her precious
in Asia will continue in a positive trend, even if duties and contribution to the EOS Annual Report 2018/2019
politics can have an influence for short period.
Woodstat helps you who work with softwood to know
The United Nations Secretary-General will convene what happens on the market worldwide. Our aim is to help
a climate Action Summit in 2019 to bring climate action you make better decisions for your company. To do this
to the top of the international agenda. To that we can we publish around 400 newsletters each year and offer a
add that in some countries, decisions have been taken charts collection online with the latest statistics covering
to increase the height limit for wood buildings. Softwood the softwood lumber market worldwide.
60
KNOW YOUR MARKET.
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make great decisions. Let us help you with the first part, the rest is up to you.
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4. Main results from the EOS market

survey – April 2019
4.1 General information about the timber markets
The table below provides a summary overview of the sawnwood markets over the last few years in the EOS countries (big
consumer countries such as Italy and the United Kingdom, which are not EOS members, are also included). For a more
detailed country-by-country analysis, see section 4.5.
Country Year Production Imports Exports Consumption

(1.000 m³) (1.000 m³) (1.000 m³) (1.000 m³)
softwood hardwood softwood hardwood softwood hardwood softwood hardwood
2013 8,385 149 1,736 166 4,932 113 5,189 202
2014 8,326 134 1,614 145 4,884 127 5,056 152
2015 8,605 126 1,641 155 5,059 124 5,268 158
Austria 2016 9,250 153 1,807 181 5,301 133 5,756 201
2017 9,650 172 1,750 174 5,450 157 5,780 190
2018 10,200 175 1,900 151 5,900 139 6,200 187
2019 10,200 180 1,800 160 5,800 150 6,200 190
2013 1,460 285 1,300 400 880 240 1,880 445
2014 1,520 285 1,330 380 920 230 1,930 435
2015 1,500 170 1,300 356 900 315 1,900 211
Belgium 2016 1,400 150 2,100 420 950 360 2,550 210
2017 1,350 150 2,400 420 1,200 360 2,550 210
2018 1,450 150 2,500 420 1,200 360 2,750 210
2019 1,450 150 2,500 420 1,200 360 2,750 210
2013 295 69 1,034 200 89 100 1,240 225

2014 290 73 1,285 200 105 100 1,470 225
2015 352 76 1,400 210 111 100 1,641 186
Denmark 2016 310 84 1,500 210 120 100 1,690 194
2017 304 78 1,400 200 120 100 1,600 185
2018 300 80 1,274 235 120 100 1,454 215
2019 310 80 1,300 230 120 100 1,490 210
2013 20,428 1,031 4,243 401 6,512 639 18,159 793
2014 20,757 1,015 4,348 418 6,935 692 18,170 741
2015 20,433 1,032 4,579 411 6,529 697 18,483 746
Germany 2016 21,109 1,064 4,915 396 7,295 685 18,729 755
2017 22,056 1,082 5,083 379 7,848 781 19,291 680
2018 23,000 1,100 5,340 350 8,523 745 19,817 705
2019 23,000 1,100 5,400 350 8,800 770 19,600 680
2013 10,400 50 300 27 6,700 13 3,700 63
2014 10,800 40 360 27 7,500 13 3,400 63
2015 10,500 40 440 27 7,900 13 3,300 54
Finland 2016 11,400 50 494 28 8,900 19 3,200 59
2017 11,700 45 537 23 9,700 19 2,900 49
2018 11,800 45 550 25 9,000 18 3,000 52
2019 11,900 45 560 25 9,200 18 3,000 52
62

(1.000 m³) (1.000 m³) (1.000 m³) (1.000 m³)
2013 6,800 1,380 2,200 243 600 380 8,400 1,243
2014 6,360 1,542 2,200 220 600 400 7,960 1,362
2015 6,230 1,479 2,100 200 760 430 7,570 1,249
France 2016 6,400 1,500 2,100 200 770 450 7,730 1,250
2017 6,596 1,578 2,100 200 743 480 7,917 1,270
2018 6,795 1,578 2,150 200 720 480 8,225 1,298
2019 6,900 1,578 2,200 200 720 480 8,380 1,298
2013 860 500 3,936 717 120 141 4,676 1,076
2014 910 520 3,904 754 140 185 4,674 1,089
2015 920 550 3,873 770 150 173 4,643 1,147
Italy * 2016 950 550 3,981 757 153 175 4,778 1,132
2017 970 550 4,203 713 201 215 4,972 1,048
2018 950 550 4,009 713 240 215 4,719 1,048
2019 950 550 4,009 713 240 215 4,719 1,048
2013 2,600 659 252 9 2,069 428 783 240
2014 2,620 717 439 21 2,258 498 801 240
2015 2,690 810 570 30 2,440 590 820 250
Latvia 2016 2,792 690 779 29 2,739 472 832 253
2017 2,662 596 934 28 2,746 417 850 250
2018 2,730 650 1,056 41 2,850 448 936 243
2019 2,660 600 1,000 20 2,720 395 940 225
2013 2,200 0 960 35 515 1 2,645 34
2014 2,400 0 970 23 512 0 2,858 23
2015 2,444 0 979 24 560 0 2,863 24
Norway 2016 2,533 0 991 28 600 0 2,924 28
2017 2,655 0 996 31 666 0 2,985 31
2018 2,675 0 924 31 667 0 2,932 31
2019 2,675 0 925 31 650 0 2,950 31
2013 3,762 1,756 16 68 2,607 968 1,171 856
2014 3,500 1,700 16 29 2,296 712 1,188 918
2015 4,317 1,795 29 29 1,759 726 2,529 1,179
Romania 2016 3,900 1,700 283 125 1,800 800 2,383 1,025
2017 3,600 1,600 450 25 1,600 800 2,450 825
2018 3,550 1,600 350 110 1,100 600 2,800 1,110
2019 3,500 1,600 360 130 1,150 650 2,800 1,080
2013 16,100 90 120 40 11,700 10 4,600 120
2014 17,660 100 150 28 12,300 9 4,800 120
2015 18,132 100 170 28 12,820 4 5,253 124
Sweden 2016 18,011 100 160 43 13,000 19 5,550 123
2017 18,309 97 180 47 13,110 43 5,780 101
2018 18,300 95 180 45 12,440 20 5,705 120
2019 18,600 95 180 45 13,000 20 5,600 120
63

(1.000 m³) (1.000 m³) (1.000 m³) (1.000 m³)
2013 986 58 320 35 175 15 1,131 78
2014 1,080 65 330 35 180 15 1,230 85
2015 1,089 76 345 50 176 15 1,258 111
Switzer-
2016 1,074 48 348 46 190 17 1,232 77
land
2017 1,037 48 342 37 198 25 1,181 60
2018 1,075 45 333 35 198 20 1,210 60
2019 1,065 47 340 35 196 21 1,209 61
2013 3,536 46 5,101 380 130 20 8,491 410
2014 3,716 47 5,352 400 140 20 8,870 430
2015 3,449 44 5,888 435 167 17 9,170 462
United
2016 3,624 47 6,219 427 167 21 9,676 453
Kingdom*
2017 3,728 42 7,079 501 166 25 10,641 518
2018 3,650 50 6,564 501 194 23 10,020 528
2019 3,800 50 6,675 501 203 23 10,272 528
2013 77,812 6,073 21,518 2,721 37,029 3,068 62,065 5,785
2014 79,939 6,238 22,298 2,680 38,770 3,001 62,407 5,883
2015 80,661 6,298 23,314 2,725 39,331 3,204 64,698 5,901
EOS TOTAL 2016 82,753 6,136 25,677 2,890 41,985 3,251 67,030 5,760
2017 84,617 6,038 27,454 2,778 43,748 3,422 68,897 5,417
2018 86,475 6,118 27,130 2,856 43,152 3,168 69,768 5,806
2019 87,010 6,075 27,249 2,860 43,999 3,202 69,910 5,733
*Italy and the UK are not EOS Countries, but will be analysed in this chapter
4.2 Sawn softwood

4.2.1 Overview of EOS Sawn Softwood Production
Table 4.1: Overview of the EOS sawn softwood production 2014-2019 in 1,000 m3
2014 2015 2016 2017 2018 2019 * 18/17 % 19/18 % Share %
var. var.* 2018
AT 8,326 8,605 9,250 9,650 10,200 10,200 5.7% 0.0% 11.8%
BE 1,520 1,500 1,400 1,350 1,450 1,450 7.4% 0.0% 1.7%
CH 1,080 1,089 1,074 1,037 1,075 1,065 3.7% -0.9% 1.2%
DE 20,757 20,433 21,109 22,056 23,000 23,000 4.3% 0.0% 26.6%
DK 290 352 310 304 300 310 -1.3% 3.3% 0.3%
FI 10,800 10,500 11,400 11,700 11,800 11,900 0.9% 0.8% 13.6%
FR 6,360 6,230 6,400 6,596 6,795 6,900 3.0% 1.5% 7.9%
IT 910 920 950 970 950 950 -2.1% 0.0% 1.1%
LV 2,620 2,690 2,792 2,662 2,730 2,660 2.6% -2.6% 3.2%
NO 2,400 2,444 2,533 2,655 2,675 2,675 0.8% 0.0% 3.1%
RO 3,500 4,317 3,900 3,600 3,550 3,500 -1.4% -1.4% 4.1%
SE 17,660 18,132 18,011 18,309 18,300 18,600 0.0% 1.6% 21.2%
UK 3,716 3,449 3,624 3,728 3,650 3,800 -2.1% 4.1% 4.2%
EOS 79,939 80,661 82,753 84,617 86,475 87,010 2.2% 0.6% 100%
*Estimates
64
© Shutterstock
Following some challenging years in the aftermath of the In this group of countries (EOS, plus Italy and the UK) total
global economic crisis, the recovery of sawn softwood production of sawn softwood increased by more than 2% in
production continues at a pleasing pace, on the back of 2018 reaching a volume of almost 86.5 million m3.
lively demand in Europe and a satisfactory price level.
Delivered volumes to East Asia (China and Japan) overall With a production of 23 million m3 in 2018 (+4.3% vs 2017)
went down but sales in values were up. The United States Germany remains the largest sawn softwood producer
market was very receptive in the first part of the year, less within the EOS community. Sweden ranks second with 18.3
so in the second half. Overall, there were different trends million m3 in 2018, with flat production. Finland remains the
across Europe when it comes to exported volumes: Sweden third largest producer with 11.8 million m3 (+1% vs 2017)
and Finland have seen their shipments shrink in volume ahead of Austria with 10.2 million m3 (+5.7% vs 2017). France
(but not in value, with Swedish exports doing particularly remains the fifth largest producer with 6.8 million m3 (+3%
a brighter note, many countries have emphasized that numerous investments are taking place,
well), whereas centralinEuropean
especially countries
facilities which such asvalue-added
will produce vs 2017).
Germany products such as (but not only) CLT.
and Austria have seen their exports increase.
2019 is set to be a more challenging year: production
The year was characterized by high availability of raw is expected to remain overall flat, with the exception of
materials due to the widespread weather-related calamities Sweden and France (where production might increase)
across Europe, particularly in Central Europe. Production among the largest producers. On a brighter note, many
has increased partly because of this. It seems that as a result countries have emphasized that numerous investments
of climate change beetle-damaged logs will be increasing in are taking place, especially in facilities which will produce
the next few years. How the industry will adjust is a major value-added products such as (but not only) CLT.
Figure 4.1: Sawn softwood production volumes in the EOS member countries 2009-2019 (000 m³) -
challenge for sawmills across Europe.
TOTAL
Figure 4.1: Sawn softwood production volumes in the EOS member countries 2009-2019 (000 m3) - TOTAL
90.000
80.000
70.000
60.000
50.000
40.000
30.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
65
Figure: 4.2 Sawn softwood production volumes in the EOS member countries 2014-2019 (000 m³) –
Figure: 4.2 Sawn softwood production volumes in the EOS member countries 2014-2019 (000 m3) –
COUNTRY BY COUNTRY
25.000
20.000
15.000
10.000
5.000
0
AT BE CH DE DK FI FR IT LV NO RO SE UK
2014 2015 2016 2017 2018 2019
4.2.2. Overview of the EOS Sawn Softwood Consumption

4.2.2. Overview
Table 4.2: Overview of theof EOS
the EOS Sawnsoftwood
sawn Softwood Consumption
consumption 2014-2019 in 1,000 m3
Table 4.2:
2014Overview2015
of the EOS sawn
2016 softwood2017
consumption2018
2014-20192019
in 1,000
* m³
18/17 % 19/18 % Share %
var. var.* 2018
AT 5,056 5,268 5,756 5,780 6,200 18/17
6,200 19/18
7.3% Share0.0% 8.9%
2014 2015 2016 2017 2018 2019*
BE 1,930 1,900 2,550 2,550 2,750 % var.
2,750 % var.*
7.8% % 20180.0% 3.9%
AT 5,056 5,268 5,756 5,780 6,200 6,200 7.3% 0.0% 8.9%
CH 1,230 1,258 1,232 1,181 1,210 1,209 2.5% -0.1% 1.7%
BE 1,930 1,900 2,550 2,550 2,750 2,750 7.8% 0.0% 3.9%
DE
CH18,170 1,230 18,4831,258 18,729
1,232 19,291
1,181 1,21019,817 1,209 19,600
2.5% 2.7%
-0.1% -1.1%
1.7% 28.4%
DK DE 1,470 18,170 1,641

18,483 18,729
1,690 19,291
1,600 19,8171,45419,600 2.7%
1,490 -1.1%
-9.1% 28.4% 2.5% 2.1%
FI DK 3,400 1,470 3,3001,641 1,690

3,200 1,600
2,900 1,4543,000 1,490 -9.1%
3,000 2.5%
3.4% 2.1%0.0% 4.3%
FI 3,400 3,300 3,200 2,900 3,000 3,000 3.4% 0.0% 4.3%
FR 7,960 7,570 7,730 7,917 8,225 8,380 3.9% 1.9% 11.8%
FR 7,960 7,570 7,730 7,917 8,225 8,380 3.9% 1.9% 11.8%
IT IT 4,674 4,674 4,6434,643 4,778
4,778 4,972
4,972 4,7194,719 4,719 4,719
-5.1% -5.1%
0.0% 6.8%0.0% 6.8%
LV LV 801 801 820 820 832

832 850
850 936 936 940 10.1%
940 0.5%
10.1% 1.3%0.5% 1.3%
NO
NO 2,858 2,858 2,8632,863 2,924
2,924
2,985
2,985
2,9322,932 2,950 -1.8%
2,950
0.6%
-1.8%
4.2%0.6% 4.2%
RO 1,188 2,529 2,383 2,450 2,800 2,800 14.3% 0.0% 4.0%
RO 1,188 2,529 2,383 2,450 2,800 2,800 14.3% 0.0% 4.0%
SE 4,800 5,253 5,550 5,780 5,705 5,600 -1.3% -1.8% 8.2%
SE UK 4,800 8,870 5,2539,170 9,676
5,550 10,641
5,780 10,0205,70510,272 -5.8%
5,600 2.5%
-1.3% 14.4%-1.8% 8.2%
UK EOS 8,870 62,407 9,170

64,698 67,030
9,676 68,897
10,641 69,76810,02069,910 1.3%
10,272 0.2%
-5.8% 100% 2.5% 14.4%
*Estimates
EOS 62,407 64,698 67,030 68,897 69,768 69,910 1.3% 0.2% 100%
*Estimates In 2018, demand was lively across Europe with the largest Central European producers all signaling
satisfactory levels. Wood as a construction material is gaining ground, especially across Nordic
In 2018, demand was lively across Europe with the largest seems to be gaining momentum. The packaging sector
Central European producers all signaling satisfactory also positively contributed to brisk consumption of sawn
levels. Wood as a construction material is gaining ground, softwood as underlined by France and Germany. For more
especially across Nordic countries. Sweden, Norway, information on single countries, see country-by-country
Germany, and Austria emphasized an increase of the section below.
utilization of wood as a building material. Engineered wood
66
countries. Sweden, Norway, Germany, and Austria emphasized an increase of the utilization of wood
as a building material. Engineered wood seems to be gaining momentum. The packaging sector also
positively
EOS ANNUAL REPORT 2018contributed
- 2019 to brisk consumption of sawn softwood as underlined by France and Germany.
For more information on single countries, see country-by-country section below.
In 2018, total demand for sawn softwood grew in this group of countries (EOS, Italy, UK) by 1.3% to
69.8 million m3, growing for the seventh year in a row. As anticipated in the production section, 2019
In 2018, total demand
looksfor
setsawn
to besoftwood grew year.
a more difficult in thisFinland could statement
groupin its market have beenstressed
a cyclical peak,could
that 2018 whereas
have Germany and
been a cyclical peak, whereas Germany
of countries (EOS, Italy, UK) by 1.3% to 69.8 million m , and 3Latvia emphasized that there is high uncertainty. There
Latvia emphasized that there is high uncertainty. There are
are many
growing for the sixth year downside
in a row.risks including the in
As anticipated outcome
the ofmanyBrexit,downside
trade tensions
risksbetween thethe
including United Statesof Brexit, trade
outcome
and China, geopolitical risks. As a result, consumption is expected to be flat or slightly decrease.
production section, 2019 looks set to be a more difficult tensions between the United States and China, geopolitical
year. Finland in its market statement stressed that 2018 risks. As a result, consumption is expected to be flat.
Figure 4.3: Sawn softwood consumption volumes in the EOS member countries 2009-2019 (000 m³)
- TOTAL
Figure 4.3: Sawn softwood consumption volumes in the EOS member countries 2009-2019 (000 m3) – TOTAL
75.000
70.000
65.000
60.000
55.000
50.000
45.000
40.000
35.000
30.000
25.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Figure: 4.4 SawnFigure:

softwood consumption
4.4 Sawn volumes
softwood consumption in the
volumes EOS
in the member
EOS countries
member countries 2014-2019
2014-2019 (000 m3) –
(000 m³)
– COUNTRY BY COUNTRY
COUNTRY BY COUNTRY
20.000
15.000
10.000
5.000
0
2014 2015 2016 2017 2018 2019
4.3 Sawn hardwood
4.3.1 Overview of EOS Sawn Hardwood Production
Table 4.3: Overview of the EOS sawn hardwood production 2014-2019 in 1,000 m³
18/17 19/18
2014 2015 2016 2017 2018 2019*
% var. % var.*
AT 134 126 153 172 175 180 1.7% 2.9%
BE 285 170 150 150 150 150 0.0% 0.0% 67
CH 65 76 48 48 45 47 -6.3% 4.4%
4.3 Sawn hardwood

4.3.1 Overview of EOS Sawn Hardwood Production
Table 4.3: Overview of the EOS sawn hardwood production 2014-2019 in 1,000 m3
2014 2015 2016 2017 2018 2019 * 18/17 % var. 19/18 %
var.*
AT 134 126 153 172 175 180 1.7% 2.9%
BE 285 170 150 150 150 150 0.0% 0.0%
CH 65 76 48 48 45 47 -6.3% 4.4%
DE 1,015 1,032 1,064 1,082 1,100 1,100 1.7% 0.0%
DK 73 76 84 78 80 80 2.6% 0.0%
FI 40 40 50 45 45 45 0.0% 0.0%
FR 1,542 1,479 1,500 1,578 1,578 1,578 0.0% 0.0%
IT 520 550 550 550 550 550 0.0% 0.0%
LV 717 810 690 596 650 600 9.1% -7.7%
NO 0 0 0 0 0 0 - -
RO 1,700 1,795 1,700 1,600 1,600 1,600 0.0% 0.0%
SE 100 100 100 97 95 95 -2.1% 0.0%
UK 47 44 47 42 50 50 19.0% 0.0%
EOS 6,238 6,298 6,136 6,038 6,118 6,075 1.3% -0.7%
*Estimates
Production in the sawn hardwood sector has not been showing

any significant trends over the last few years. Demand is on the
way up in Europe and the mood was upbeat in 2018 but both
France and Germany signaled a difficulty in export to Asian
markets. However, some countries are experiencing problems
in raw materials’ supply for some years, which is keeping
production below potential. Countries such as France, Belgium
(mainly oak) and Germany (mainly beech) are experiencing
significant exports of raw materials to countries like China.
Romania signalled unsatisfactory availability of beech logs.
On the brighter side, limitations on the exports of oak from
Croatia have been lifted, which were one of the reasons why
the Austrian hardwood sector had a good year.
Overall production in this group of countries exceeded 6.1

million m3 in 2018, 1.3% higher than in 2017. Production
in 2019 is expected to be flat. In 2018, Romania and France
remain the biggest sawn hardwood producers within the
EOS community, with a production of 1.6 and 1.58 million
© Shutterstock
m3 respectively. The third largest producer remains Germany,

with 1.1 million m3, a small increase compared to 2017.
68
respectively. The third largest producer remains Germany, with 1.1 million m3, a small increase
compared to 2017.
Figure 4.5: Sawn hardwood production volumes in the EOS member countries 2009-2019 (000 m³) -
TOTAL 2018 - 2019
EOS ANNUAL REPORT
Figure 4.5: Sawn hardwood production volumes in the EOS member countries 2009-2019 (000 m3) - TOTAL
7.000
6.000
5.000
4.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Figure: 4.6 Sawn hardwood production volumes in the EOS member countries 2014-2019 (000 m3) –
COUNTRY BY COUNTRY
2.000
Figure: 4.6 Sawn hardwood production volumes in the EOS member countries 2014-2019 (000 m³)
1.500 BY COUNTRY
– COUNTRY
1.000
500
0
2014 2015 2016 2017 2018 2019
4.3.2 Overview of EOS Sawn Hardwood consumption

Table 4.4: Overview of the EOS sawn hardwood consumption 2014-2019 in 1,000 m3
2014 2015 2016 2017 2018 2019 * 18/17 % var. 19/18 %
var.*
AT 4.3.2 Overview
152 of EOS158
Sawn Hardwood
201consumption190 187 190 -1.6% 1.6%
BE Table 4.4:
435 Overview of211
the EOS sawn hardwood
210 consumption
210 2014-2019
210 in 1,000 m³210 0.0% 0.0%
CH 85 111 77 60 60 61 0.0% 1.7%
DE 741 746 755 680 705 18/17 680

19/18 3.7% -3.5%
2014 2015 2016 2017 2018 2019*
DK 225 186 194 185 215 % var. %210
var.* 16.2% -2.3%
AT 152 158 201 190 187 190 -1.6% 1.6%
FI 63 54 59 49 52 52 6.1% 0.0%
BE 435 211 210 210 210 210 0.0% 0.0%
FR CH1,362 85 1,249 111 77
1,250 60 1,270 60 61
1,298 0.0% 1.7%
1,298 2.2% 0.0%
IT DE1,089 741 1,147 746 755

1,132 680 1,048 705 680
1,048 3.7% -3.5%
1,048 0.0% 0.0%
DK 225 186 194 185 215 210 16.2% -2.3%
LV 240 250 253 250 243 225 -3.0% -7.2%
FI 63 54 59 49 52 52 6.1% 0.0%
NO FR 23 1,362 1,249
24 1,25028 1,270 1,298
31 1,29831 2.2% 0.0%
31 0.0% 0.0%
RO IT 918 1,089 1,147

1,179 1,132
1,025 1,048 1,048
825 1,048
1,110 0.0% 0.0%
1,080 34.5% -2.7%
LV 240 250 253 250 243 225 -3.0% -7.2%
SE 120 124 123 101 120 120 18.8% 0.0%
NO 23 24 28 31 31 31 0.0% 0.0%
UK RO 430 918 1,179
462 1,025453 825 1,110
518 1,080528 34.5% -2.7%
528 1.9% 0.0%
EOS SE5,883 120 5,901 124 123

5,760 101 5,417 120 120
5,806 18.8% 5,7330.0% 7.2% -1.3%
UK 430 462 453 518 528 528 1.9% 0.0%
*Estimates
EOS 5,883 5,901 5,760 5,417 5,806 5,733 7.2% -1.3%
*Estimates
69
Demand in the sawn hardwood sector was deemed satisfactory in France and Austria, livelier
than in recent year, particularly thanks to internal markets. Even Germany stressed lively
demand, particularly in the oak sector, which in Germany is however limited in terms of
volume.
Demand in the sawn hardwood sector was deemed A noticeable increase can thus be observed comparing with
satisfactory in France
In 2017,and Austria,
sawn livelier
hardwood than in recent
consumption 2017.ofFor
in this group 2019 a slight
countries decline
increased seems
to 5.8 to bem3
million on the cards.
year, particularly(2017:
thanks5.4to million
internalm3). A noticeable
markets. increase can thus be observed comparing with 2017. For
Even Germany
2019 a slight
stressed lively demand, declinein
particularly seems to be
the oak on the
sector, cards. France remains the largest consumer within the EOS
which
France remains the largest consumer within the EOS community with almost 1.3 million m3, followed
in Germany is however limited in terms of volume. community with almost 1.3 million m3, followed by Romania
by Romania with 1.1 million m3 and Germany with slightly more than 700,000 m3.
with 1.1 million m3 and Germany with slightly more than
In 2018, sawn hardwood consumption in this group of 700,000 m3.
Figure 4.7: Sawn hardwood consumption volumes in the EOS member countries 2009-2019 (000
countries increased
m³) -to 5.8 million m (2017: 5.4 million m ).
TOTAL
3 3
Figure 4.7: Sawn hardwood consumption volumes in the EOS member countries 2009-2019 (000 m3) - TOTAL
7.000
6.000
5.000
4.000
3.000
2.000
1.000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Figure: 4.8 Sawn hardwood consumption volumes in the EOS member countries 2014-2019 (000 m3) –
COUNTRY BY Figure:
COUNTRY
4.8 Sawn hardwood consumption volumes in the EOS member countries 2014-2019 (000
m³) – COUNTRY BY COUNTRY
1.500
1.000
500
0
2014 2015 2016 2017 2018 2019
70
4.4 Focus on by-products

Most EOS countries have shared data on sawmill by-products, which are reported below.
Figure: 4.9 Sawdust production volumes in the EOS member countries 2016-2019 (000 m3)
2016 2017 2018 2019* 18/17 % var. 19/18 % var.*
AT 2,724 3,000 3,100 3,100 3.3 0.0
BE 207 191 221 221 15.7 0.0
CH 207 196 211 204 7.7 -3.3
DE 4,697 4,901 5,106 5,106 4.2 0.0
FI 3,420 3,510 3,540 3,570 0.9 0.8
LV 558 521 534 521 2.6 -2.6
NO 250 260 265 265 1.9 0.0
RO 195 200 200 200 0.0 0.0
SE 5,300 5,300 5,300 UP 0.0 0.0
TOTAL 17,558 18,079 18,477 18,487°° 2.2 0.1
*Estimates °° Sweden has estimated the 2019 value to go up but did not specify by how much. So, the total has been calculated by assuming the Swedish figure remains constant,
but this is an underestimation
Figure: 4.10 Chips production volumes in the EOS member countries 2016-2019 (000 m³)
2016 2017 2018 2019* 18/17 % var. 19/18 % var.*
AT 3,500 3,550 3,600 3,600 1.4 0.0
BE 809 778 839 839 7.8 0.0
CH 518 490 513 510 4.7 -0.6
DE 9,799 10,232 10,663 10,663 4.2 0.0
FI 7,600 7,800 7,900 7,900 1.3 0.0
LV 3,145 2,997 3,085 3,006 2.9 -2.6
NO 1,500 1,500 1,250 1,250 -16.7 0.0
RO 350 350 350 350 0.0 0.0
SE 11,300 11,400 11,400 UP 0.0 0.0
TOTAL 38,521 39,097 39,599 39,517°° 1.3 -0.2
Figure: 4.11 Bark production volumes in the EOS member countries 2016-2019 (000 m3)
2016 2017 2018 2019* 18/17 % var. 19/18 % var.*
AT 1,100 1,000 1,100 1,100 10.0 0.0
BE 276 267 285 285 6.7 0.0
CH 226 214 223 222 4.2 -0.4
DE unav. unav. unav. unav.
FI 2,300 2,400 2,400 2,400 0.0 0.0
LV 429 400 400 395 0.0 -1.3
NO 500 500 500 500 0.0 0.0
RO 1,992 1,700 1,650 1,650 -2.9 0.0
SE 3,600 3,600 3,600 UP 0.0 0.0
TOTAL 10,423 10,081 10,158 10,152°° 0.8 -0.1
71
4.5 Country Reports

AUSTRIA
Source: Fachverband der Holzindustrie Österreichs
General economic information

2016 2017 2018 2019
Population (million) 8.7 8.7 8.8 8.8
GDP (%) 1.5 2.9 2.7 1.7
Inflation rate (%) 1.0 2.1 2.0 1.7
Unemployment rate (%) 6.0 5.5 4.9 4.6
Construction industry
Buildings permits (units) 58 000 62 600 61 500 61 700
Housing starts (units) 51 700 57 300 59 000 58 500
Housing completions (units) 48 200 52 000 56 500 58 800
Wage Development (%) 0.3 0.3 0.6 0.6
Average working time in 38.5 38.5 38.5 38.5
sawmilling (h/week)
2019 data are estimates
Sawn Softwood (in 1,000 m3)

2016 2017 2018 2019
Production 9 250 9 650 10 200 10 200*
Imports 1 807 1 750 1 900 1 800
Exports 5 301 5 450 5 900 5 800
Consumption 5 756 5 780 6 200 6 200
2019 data are estimates. *Figure is underestimated
Sawn Hardwood (in 1,000 m3)

2016 2017 2018 2019
Production 153 172 175 180
Imports 181 174 151 160
Exports 133 157 139 150
Consumption 201 190 187 190
Availability of logs
2016 2017 2018 2019
Softwood 2 4 4 4
Hardwood 3 2 3 3
(1 = low; 2 = medium low; 3 = normal; 4 = medium high; 5 = high)
72
Market statement
2018 was again a record-breaking year for the Austrian The positive trend of recent years continued in 2018. A
sawmilling industry. Production increased for the fourth year in total of 17.5 million m3 of sawlogs were processed. The
a row and for the first time since 2008, more than 10 million m3 sawnwood production (softwood and hardwood) reached
of sawnwood were produced. The Austrian sawmills benefited 2016 10.4 2017
million m3 and thus returned
2018 to the level of before
2019
from the good economic situation and further improvements the global economic crisis of 2008. The first month of 2019
Softwood 2 4 4 4
across almost all sales markets. The sawmills were able to reveals a slight positive development in production, so
expand theirHardwood
international market share. Compared to 2017, 3 2
we calculate 3
a flat production 3 for 2019. However,
figure
there was another increase in exports of around 8.6% in 2018. according to the latest projections , production in 2019
in Austria will most probably turn out to be higher than
The summer of 2018 was marked by extensive forest damage in initially foreseen.
MARKET
Central Europe. Big STATEMENT
forest areas in northern areas of Austria are
under threat from a beetle plague and the increased frequency The Austrian sawmilling industry is a large and very successful
2018 was again a record-breaking year
of extreme events such as storms and heavy winter snow. Thefor the Austrian sawmilling
sector, industry. Production
with approximately increased
1,000 companies forclose to
and
the fourth
biggest challenge is toyear in the
select a row and trees
infected for the
and first
save time
them since8,400
2008, more thanThe
employees. 10 sawmilling
million m3industry
of sawnwood
is the biggest
were produced. The Austrian sawmills benefited
as part of special forest stocks as soon as possible. The large from the good economic situation and further
processor of wood in the entire wood industry, handling
improvements across almost all sales
quantities of damaged wood led to high supply pressures onmarkets. The sawmills
70% of allwere able to
processed expand
solid their
biomass. international
The industry contributes
the localmarket
sawmillsshare. Compared
at a regional to 2017,
level. The there was
big Austrian another substantially
sawmills increase in exports of around
to Austria’s foreign8.6%
tradeinbalance
2018. and consists
were able to handle these substantial amounts of logs thanks almost exclusively of small and medium-sized enterprises.
The summer of 2018 was marked by extensive forest damage in Central Europe. Big forest areas in
to their extensive production capabilities and also to the The 40 biggest sawmills generate approximately 90% of the
northern areas of Austria are under threat from a beetle plague and the increased frequency of
good sales situation particularly in the well-developed timber total production volume; the remaining 10% of production
extreme events such as storms and heavy winter snow. The biggest challenge is to select the infected
industries (GLT, CLT,…) Germany was the most important is carried out by 960 small and medium-sized enterprises
trees and save them as part of special forest stocks as soon as possible. The large quantities of
‘driving force’ for the European market in 2018. Italy remains which are important for the regional value creation and play
damaged wood led to high supply pressures on the local sawmills at a regional level. The big Austrian
the largest export destination, even though the export figures a major role in rural regions.
sawmills were able to handle these substantial amounts of logs thanks to their extensive production
stagnated, while almost all other major markets increased.
capabilities and also to the good sales situation particularly in the well-developed timber industries
Glued and prefabricated timber (GLT and CLT) recorded Softwood
(GLT, CLT,…) Germany was the most important ‘driving force’ for the European market in 2018. Italy
significant growth rates. The domestic market revealed a In 2018, 7.2 million m3 of softwood sawlogs were imported
remains the largest export destination, even though the export figures stagnated, while almost all
positive development for almost all products. from our neighbouring EU countries (2017: 6.1 million m3).
other major markets increased. Glued and prefabricated timber (GLT and CLT) recorded significant
growth rates. The domestic market revealed a positive development for almost all products.
Fig. 1: Production of sawnwood in Austria
12.000
10.000
8.000
1,000 m³
6.000
4.000
2.000
0
2007
2018 vorl.
2000
2001
2002
2003
2004
2005
2006
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Fig. 1: Production of sawnwood in Austria

73
Fig. 2: Austrian sawn softwood exports 2017/2018
Fig. 2: Austrian sawn softwood exports 2017/2018

The roundwood flow from the Czech Republic, the largest Unfortunately, the main market of Italy has not developed
importing country, increased
Unfortunately, the mainby 24% (3.8 of
market million
Italy mhas3
). The as well asas
not developed expected.
well asAbout 45% ofAbout
expected. sawn softwood
45% of sawn exports go
other softwood
two significant import
exports gocountries
to Italy,are
ourGermany +19.5% keytoexport
long-standing Italy, our long-standing
market. With an keyoverall
export market. With an overall
sawn softwood
(2.0 million
export of 2.6 million m3, the Italian market was up by only +0.2%. All other main markets Italian
m 3
) and Slovenia +15.7% (1.1 million m 3
). Lower sawn softwood export of 2.6 million m 3
, the showed market
gradeshigh
are mainly
growthaffected
rates. by the forest
Exports damage in increased
to Germany these was
by up7.4by%onlyto +0.2%. All otherm3
1.0 million mainandmarkets
to allshowed
other high
countries.
European countries by 10.9% (2018: 0.7 million m3).growth The USA rates.
hadExports to Germany
the largest growthincreased
in exportsby 7.4with
% to 1.0
million m3 and to all other European countries by 10.9%
+330% and a total increase of 142,934 m3. After a difficult year in3 2017, exports to the MENA
The Austrian sawmill industry was sufficiently supplied with (2018: 0.7 million m ). The USA had the largest growth in
significantly increased by 16% in 2018. Thus, the level of 2016 could be reached.
sawlogs but there are always some regional differences and exports with +330% and a total increase of 142,934 m3. After
bottlenecks.
Hardwood In some parts of Austria, there was a tendency a difficult year in 2017, exports to the MENA significantly
towards an undersupply of fresh sawlogs on the market increased by 16% in 2018. Thus, the level of 2016 could be
Once
special duringagain,
the 1stthe hardwood
quarter of 2018.industry
Domesticinwood
Austria
alwaysdeveloped very satisfactorily. Production increased to a
reached.
total
has the of 176,000
highest priority. Itm3. The supply
is important of aoak
to have logs is currently good. The temporary export ban from the
continuous
and predictable supply of all assortments
Croatian government on transportingthroughout
oak logs the andHardwood
sawnwood was lifted at a European level. In
year. addition, the demand for oak sawnwood has continued Oncetoagain,
rise. the
Thehardwood industry in sawmills
Austrian hardwood Austria developed
are
satisfied with the rising demand in 2018. Joint research and development projects should help 176,000
very satisfactorily. Production increased to a total of to
Together with by-products and further processed timber,
focus on the area of ‘living with wood’ and the interior use of wood. m 3
. The supply of oak logs is currently good. The temporary
the sawmilling industry was able to turn over almost EUR export ban from the Croatian government on transporting
2.4 billion, i.e. +7.6% compared with the previous year. oak logs and sawnwood was lifted at a European level. In
About 60% of the whole production in Austria is exported. In addition, the demand for oak sawnwood has continued to
2018, the total export of sawnwood was approximately 5.9 rise. The Austrian hardwood sawmills are satisfied with the
million m . That means an increase of about 2.4 % (2017: 5.5
3
rising demand in 2018. Joint research and development
million m3). projects should help to focus on the area of ‘living with
wood’ and the interior use of wood.
74
BELGIUM
Source: Fédération Nationale des Scieries

2016 2017 2018 2019
GDP (%) 1.4 1.7 1.5 1.4
Inflation rate (%) 1.8 2.2 2.4 2.0
Housing starts (units) 47 000 47 000 n.a. n.a.
Housing completions (units) 46 000 46 000 n.a. n.a.
Wage development (%) 1.1 2.7 1.6 1.7
Average working time in 38 38 38 38
sawmilling (h/week)

2016 2017 2018 2019
Production 1 400 1 350 1 450 1 450
Imports 2 100 2 400 2 500 2 500
Exports 950 1 200 1 200 1 200
Consumption 2 550 2 550 2 750 2 750

2016 2017 2018 2019
Production 150 150 150 150
Imports 420 420 420 420
Exports 360 360 360 360
2016 2017 2018 2019
Softwood 1 1 5 5
Hardwood 1 1 1 1
Oak 1 1 1 1
Beech 3 3 3 3
75
Market statement
Hardwood: supply difficulties due to significant competition Softwood: significant impact of bark beetle attacks on
with the export of logs to Asia. spruce on the timber market. The availability of spruce logs
is important. This situation will have a negative impact on
future log availability.
© Shutterstock
76
DENMARK
Source: Dansk Traeindustrier

2016 2017 2018 2019
GDP (%) 1.7 2.3 1.1 1.6
Inflation rate (%) 0.3 1.1 0.7 0.7
sawmilling (h/week)
2018 and 2019 data are estimates

2016 2017 2018 2019
Production 310 304 300 310
Imports 1 500 1 400 1 274 1 300
Exports 120 120 120 120
Consumption 1 690 1 600 1 454 1 490

2016 2017 2018 2019
Production 84 78 80 80
Imports 210 200 235 230
Exports 100 100 100 100
2016 2017 2018 2019
Softwood 3 2 3 3
Hardwood 3 3 3 3
77
FINLAND
Source: Sahateollisuus ry and UNECE/FAO

2016 2017 2018 2019
GDP (%) 1.9 2.8 2.4 1.9
Inflation rate (%) 0.4 0.8 1.1 1.1
sawmilling (h/week)

2016 2017 2018 2019
Production 11 400 11 700 11 800 11 900
Imports 494 537 550 560
Exports 8 900 9 700 9 000 9 200
Consumption 3 200 2 900 3 000 3 000

2016 2017 2018 2019
Imports 28 23 25 25
Exports 19 19 18 18
2016 2017 2018 2019
Softwood 3 3 4 4
Hardwood - - - -
78
Market statement
Finland from a comprehensive positive credit registry. The growth

Finland is enjoying its third consecutive year of economic in consumer credit raises the question of whether some
recovery, and the unemployment rate declined to its lowest borrowers are sufficiently informed about the conditions of
level since 2011. Growth in 2018 reached 2.4%, clearly their loans—extra consumer protection measures should be
below earlier estimates of 2.8%. However, the volume of considered. (Source: IMF/Bank of Finland)
GDP exceeded, for the first time, the 2008 pre-financial crisis
level. The growth it is likely to slow further in 2019 as global Forest industry
demand slows and financial conditions tighten. There are Year 2018 was a major economic peak in the Finnish forest
downside risks to this outlook, such as an increase in trade sector. Forest industries’ production and export volumes
protectionism and, over the long term, growth is likely to were growing, industrial roundwood fellings were increasing,
be lower than what has been recently, unless productivity stumpage prices were rising and, operating profit in non-
growth permanently increases. The growth fundamentals industrial private forestry was improving. The cyclical peak
changed in 2018 towards a less favorable direction while was driven by the growing world economy, which increased
exports decline, and growth leaned more and more on the demand for forest products. Brisk demand from China
domestic consumption. This direction is expected to contributed to the development of Finnish forest exports.
continue in 2019, too. The current uncertainty in exports is related to e.g. the
Brexit, looming trade war, geopolitics and the sustainability
Hence, the challenge is to make the economy more of the financing sector in selected countries. In 2019, the
dynamic. Recent reforms have made Finnish exports more growth in production and export volumes will slow down
cost competitive and helped to boost employment. But the for most products and the upward trend in export prices will
job is not yet done: unemployment rates remain persistently level off. With regard to market pulp, the export price will
high in some regions despite ample vacancies in others, decrease from the record high level of 2018. The pulp and
and productivity growth is still below what was seen before paper industries scored excellent results, while the sawmills
the crisis, despite the strength of the recovery. The focus of reached only satisfactory level.
reforms should be on increasing labor market dynamism
while maintaining a strong safety net. This means more Sawmills
flexibility about setting wages at the firm level and changing During the 1st half, the Finnish mills enjoyed increasing
unemployment benefits to increase job search soon after export demand and prices. Also, the domestic market
losing employment. Other policies may be needed to aid picked up somewhat. The mills produced 11.8 million m3
regional labor mobility. Because growth is likely to slow, of sawn timber (11.7 million m3 2017) and exported about 9
there is a need to continue to rebuild fiscal buffers. The million m3 (9.7 million m3 2017). The export prices increased
2019 budget implies a moderate tightening; going forward, by 9%. The mills suffered from the rapid collapse of exports
fiscal policy should concentrate on raising the effectiveness to China, increasing raw material costs. The revenues from
of public spending, alongside policies to boost potential by-products started to increase and, finally the market for
growth. dust and bark eased. The financial results were mostly
satisfactory, but far away from competitors.
The financial system is sound. The authorities should
continue to keep a close eye on banks’ exposures to The outlook for the pulp- and paper industries is still positive.
real estate. The size of the banking sector has increased The export prices are expected to soften somewhat. The
substantially with the recent redomicile of Nordea to outlook for sawn softwood is more pessimistic. The Finnish
Finland, which increases demands on supervision and mills are expected to suffer from high input costs and poor
heightens the importance of continued close regional international competitiveness under the tightening market
cooperation and preparedness for crises. Households’ conditions.
exposures are also important. To protect borrowers, it
would be good for the authorities to have more so-called The expansion of the Finnish forest cluster seems to continue
“macroprudential” tools and access to better data, such as its growth. Metsagroup published its commencing of a pre-
79
financial results were mostly satisfactory, but far away from competitors.
The outlook for the pulp- and paper industries is still positive. The export prices are expected to
soften somewhat. The outlook for sawn softwood is more pessimistic. The Finnish mills are expected
to suffer from high input costs and poor international competitiveness under the tightening market
conditions. EOS ANNUAL REPORT 2018 - 2019
The expansion of the Finnish forest cluster seems to continue its growth. Metsagroup published its
commencing of a pre-engineering projects related to building a new bioproduct mill in Kemi (Output
1.5 million tonnes of pulp) and a new sawmill in Rauma (output 750 000 m3 of sawn softwood).
engineering projects related to building a new bioproduct Below some relevant data about the Finnish sawn softwood
Below some relevant data about the Finnish
mill in Kemi (Output 1.5 million tonnes of pulp) and a new sawn softwood
marketmarket are available.
are available.
sawmill in Rauma (output 750 000 m of sawn softwood).
3
Fig. 1
Fig. 1: Export of Sawn Softwood from Finland

Export of Sawn Softwood from Finland
5
4.5
Million cbm/12 month
3.5
2.5
1.5
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Whitewood 12 month Redwood 12 month
Fig. 2
Production of Sawn Softwood in Finland
15
Fig. 2: Production of Sawn Softwood in Finland
Production of Sawn Softwood in Finland
14
15
13
14
12
13
m3/year
11
12
m3/year
10
million million
11
9
10
8
9
7
8
6
7
2000 2000
2004 2004
2005 2005
2006 2006
2010 2010
2011 2011
2015 2015
2016 2016
12
2001 2001
2002 2002
2003 2003
2007 2007
2008 2008
2009 2009
2012 2012
2013 2013
2014 2014
2017 2017
2018 2018
6
12
Fig. 3
Fig. 3
Fig. 3: Top 20 Exporting countries
TOP 20 for sawn timber
Exporting in 2018
countries for sawn timber in 2018
400
350 TOP 20 Exporting countries for sawn timber in 2018
400
300
350
250
Milj. € Milj. €
300
200
250
150
200
100
150
50
100
0
50
0
Whitewood Redwood Planed Gluelam
Whitewood Redwood Planed Gluelam
80
FRANCE
Source: Fédération Nationale du Bois

2016 2017 2018 2019
GDP (%) 1.3 2.3 1.5 1.3
Inflation rate (%) 0.2 1.0 1.8 1.4
sawmilling (h/week)

2016 2017 2018 2019
Production 6 400 6 596 6 795 6 900
Imports 2 100 2 100 2 150 2 200
Exports 770 743 720 720
Consumption 7 730 7 917 8 225 8 380

2016 2017 2018 2019
Production 1 500 1 578 1 578 1 578
Imports 200 200 200 200
Exports 450 480 480 480
Consumption 1 250 1 270 1 298 1 298
2016 2017 2018 2019
Softwood 3 4 4 5
Hardwood 1 1 1 2
81
Market statement
For softwood sawmills the year 2018 was positive with good Original Text
demand from the construction, packaging, and export Pour les scieries resineuses l’année 2018 a été positive avec
sectors. une bonne demande du secteur de la construction, de
The housing in France has recovered to a level quite l’emballage et de l’export.
satisfactory even if it strongly fluctuates, which is a source of Le nombre de logements en France s’est redressé à un
concern in the medium term. niveau tout à fait correct même si celui-ci fluctue fortement
The pulp and energy sectors also did well in 2018. et fait l’objet d’inquiétudes dans la durée.
Overall, the wood sector has therefore benefited from the Les secteurs de la pâte à papier et de l’énergie ont aussi bien
recovery in demand. This turnaround was expected after a fonctionné sur l’année 2018.
long period of difficulties in the construction sector. Globalement le bois a donc bien profité du redressement
In terms of forest harvesting, very contrasting situations are de la demande. Ce redressement était attendu après
observed according to the regions and species. une longue période de difficultés dans le secteur de la
The South-West (Aquitaine) is experiencing a very difficult construction.
situation with a doubling of the price of logs over 2 years. Sur le plan de la récolte forestière, des situations très
This area has suffered from storms and bark beetles and has contrastées sont observées selon les régions et essences.
to deal with a production hole while the new plantations are Le Sud-Ouest (Aquitaine) vit une conjoncture très difficile
growing. avec un doublement du prix des grumes sur 2 ans. Cette
Spruce trees are undergoing an important attack of beetles région a subi tempêtes et scolytes et doit faire face à un
and the winter weather announces a strong upsurge in the trou de production le temps que les nouvelles plantations
spring. produisent.
On a social level companies have had to raise wages to cope Le douglas fait l’objet d’une forte demande sur un plan
with the return of inflation following the rise in energy prices. général avec un beau potentiel de développement.
For hardwood sawmills, demand was generally positive, L’épicéa fait quant à lui l’objet d’une attaque de scolytes
with nevertheless considerable uncertainties in export importante et la météo de l’hiver annonce une forte
markets, particularly in Asia. The Asian market shows signs recrudescence au printemps.
of distress. Sur un plan social les entreprises ont dû augmenter les
Since autumn 2018, the oak sector has been affected by salaires pour faire face au retour de l’inflation suite à la
a slowdown in the price increases of logs following a limit hausse des prix de l’énergie.
imposed on log exports. Pour les scieries feuillus, la demande a été globalement
Regarding beech, sawmills suffer from very tight export positive avec néanmoins de fortes incertitudes sur les
prices in a context of rising costs for the raw material due to marchés exports, en particulier en Asie. Ce débouché
limited availability especially for the good qualities. montre des signes de fébrilité.
For the latter two species sawmills have made heavy En chêne on observe depuis l’automne 2018 un tassement de
modernization investments. Investment in hardwood la hausse du prix des grumes consécutif à un plafonnement
sawmills was higher in 2018 than sawmills, which had not des exportations de grumes.
happened for many, many years. En hêtre, les entreprises souffrent de prix export très tendus
dans un contexte de hausse de la matière première en
particulier pour les belles qualités.
Pour les 2 essences les scieries ont procédé à de lourds
investissements de modernisation. L’investissement
des scieries feuillus a été supérieur en 2018 à celui des
scieries résineuses, ce qui n’était pas arrivé depuis de très
nombreuses années.
82
GERMANY
Source: Deutsche Säge-und Holzindustrie (DeSH)

2016 2017 2018 2019
GDP (%) 2.2 2.5 1.5 0.8-1.0
Inflation rate (%) 0.4 1.7 1.9 1.4
Buildings permits (units) 316 550 300 695 302 753 n.a.
Housing starts (units) n.a. n.a n.a. n.a.
Housing completions (units) 235 658 245 300 n.a. n.a.
Wage Development (%) 2.3 2.5 3.0 Stable
sawmilling (h/week)

2016 2017 2018 2019
Production 21 109 22 056 23 000 23 000
Imports 4 915 5 083 5 340 5 400
Exports 7 295 7 848 8 523 8 800
Consumption 18 729 19 291 19 817 19 600

2016 2017 2018 2019
Production 1 064 1 082 1 100 1 100
Imports 396 379 350 350
Exports 685 781 745 770
2016 2017 2018 2019
Softwood 2 2 4 4
Hardwood 3 3 3 3
83
Market statement
Big challenges for 2019 Development of the sawmill industry in 2018

The expectations of the German sawmill industry for The past year 2018 was a very positive year for the German
2019 are subdued compared to 2018 due to a difficult sawmill industry as a whole. And this despite a very difficult
environment. On the one hand, the industry expects that commodity market, which was characterised by a large
the high level of sales and thus production achieved in the number of regional wind storms and, as a result, extensive
previous year can be reached again. On the other hand, the production of wood damaged by beetles.
weakening overall economic development in Germany and
the uncertainty in foreign sales are weighing on prices, and The rapid removal of the wood produced and its utilization
the further effects on the sawnwood market can hardly be was the challenge for the companies in the past year. Above
quantified at present. all, it was possible to successfully sell the timber via existing
sales channels and open up new sales markets.
Macroeconomic environment clouded over
The macroeconomic environment has clouded over The good sales situation for sawn timber led to a significant
considerably. Both the economic research institutes and increase in sales in the German sawmill industry in 2018.
the German government have significantly lowered their While domestic sales only showed a slight increase, foreign
forecasts for overall economic development in 2019. Gross sales, in particular distance sales, were strongly expanded in
domestic product GDP is expected to grow by only 1 to 0.8 some countries outside Europe.
% in 2019, after 1.5 % in 2018 and 2.5 % in 2017. The long-
term upswing has come to an end, according to the Spring
Report. However, growth of 1.8 % is already expected for
2020.
84
Sawing industry, planing and impregnation plants

Turnover, Enterprises, Employees
Change in % Change in %
in Mio. EURO Jan.-Dec. 2017 Jan.-Dec. 2018 Change in % Dec. 2018 vs. prev. Year vs. prev. Month
Turnover, total 4.025,1 4.482,2 11,4 253,5 1,2 -37,0
of it Domestic turnover 2.531,9 2.738,6 8,2 151,8 6,9 -39,3
of it Foreign turnover 1.493,2 1.743,6 16,8 101,8 -6,3 -33,2
Foreign turnover Euro zone 851,8 936,4 9,9 253,5 1,2 -37,0
Foreign turnover outside Euro zone 641,4 807,2 25,9 55,4 -4,1 -15,6
Share of foreign turnover in % 37,1 38,9 40,1
Enterprises 94 94 0,7 94 1,1 0,0

Employees 10.704 11.465 7,1 11.729 7,1 0,1
Enterprises with 50 and more employed
Jan.-Dec. 2018
Jan.-Dec. 2018
Change in % to prev. year
Share of Foreign turnover
11,4
Foreign turnover Dom estic turnover 8,2
16,8
0,7
38,9% 7,1
61,1%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Turnover, total of it Domestic turnover of it Foreign turnover
Enterprises Employees
Enterprises with 50 and more employed

Source: DeStatis, statistic of enterprises
Softwood The high volume of calamity wood that had to be produced

In 2018,
Softwood the demand for sawn timber from all important also had to be sold on foreign markets in addition to the
demand sectors remained largely constant, not least due to domestic market. Among the customer countries, the
the stable economy of the German economy. In
In 2018, the demand for sawn timber from all important particular, United Kingdom
demand and countries
sectors remained in remote
largelyexports proved to
constant,
the construction
not least due tosector was again
the stable economyable of
to the
assert itself economy.
German be particularly receptive.the
In particular, There was a significant
construction increase in
sector
as the most important customer for domestic softwood exports to the USA, which absorbed a third more softwood
was again able to assert itself as the most important customer for domestic softwood sawn timber.
sawn timber. In addition to high demand for strength- sawn timber in 2018 at 978.4 thousand m3. The course
In addition to high demand for strength-graded sawnwood, the increased demands of modern
graded sawnwood, the increased demands of modern was very dynamic, with a peak in Q2 and Q3 and a drastic
timber construction are increasingly leading
timber construction are increasingly leading to demand for
to demand for processed construction pre-products,
reduction in Q4.
which
processedareconstruction
produced in a broad range
pre-products, whichofare
solid structural timber, laminated beam timber and cross
produced
laminated timber.
in a broad range of solid structural timber, laminated beam Among the customer countries, the Netherlands has risen
timber and cross laminated timber. to the top of the list of customer countries due to the
In addition to demand from the construction sector, the packaginghigher
significantly sector also remained
purchase volume ofan 964 thousand m3,
important
In addition toand constant
demand fromcustomer for domestic
the construction sector, softwood
the sawnwood.
ahead of Austria. Recently, however,
Last year, the the its purchase
USA increased
Packaging Division
packaging sector tended to
also remained anbe slightlyand
important weaker.
constant by half and, with 917 thousand m , now ranks third among
3
customer for domestic softwood sawnwood. Recently, the customer countries. Exports to Great Britain and Spain
In both areas, the high supply in the 4th quarter
however, the Packaging Division tended to be slightly led to considerable
also increased, price
whilepressure.
the other customer countries in
weaker. Europe showed a constant or even slightly declining trend.
The high volume of calamity wood that had to be produced also had to be sold on foreign markets in
addition to the
In both areas, thedomestic market.
high supply in the Among the led
4th quarter customer
to countries,
In addition tothe
theUnited Kingdom
USA, India, and
Australia, countries
Pakistan and Saudi
in remote exports
considerable proved to be particularly receptive. There
price pressure. Arabia was a significant
are also increase
to be mentioned withinrising
exports to figures
export
the USA, which absorbed a third more softwood sawn timber in selling.
in distance 2018 atOn978.4 thousand
the other m³. The
hand, China and especially
the UAE saw some
course was very dynamic, with a peak in Q2 and Q3 and a drastic reduction in Q4. significant declines.
85
Export of sawn softwood

planed and unplaned timber
in m³
Country 1-12/2017 1-12/2018 Change
Netherlands 883.929 963.630 9,0
Austria 936.893 931.812 -0,5
USA 603.803 916.614 51,8
France 873.084 871.004 -0,2
Belqium 671.431 693.208 3,2
UK 418.018 493.439 18,0
Italy 474.953 486.213 2,4
India 262.148 289.986 10,6
Czech Rep. 279.465 249.367 -10,8
Schwitzerland 184.906 186.679 1,0
China 184.368 177.433 -3,8
Australia 53.941 174.440 223,4
Spain 121.223 158.077 30,4
Poland 200.693 156.157 -22,2
Pakistan 115.930 143.757 24,0
VAE 190.470 143.395 -24,7
Saudi Arabia 107.184 124.598 16,2
Romania 99.051 106.986 8,0
other countries 1.186.930 1.256.064 5,8
total 7.848.420 8.522.859 8,6 *VAE: United Arab Emirates
Source: DeStatis
86 *VAE: United Arab Emirates

With slightly higher imports at 5.3 million m³, exports at 8.5 million m³ enabled a significant increase
in domestic production. Domestic consumption will only increase by about 3 % to just under 20
million m³ in 2018.
The high level of exports achieved by German sawmills as a The raw timber market was already marked by a series
result of their export efforts made it possible to cut calamity of storms in 2017, but also in 2018, with a relatively high
woodraw
The quickly in Germany.
timber market was already marked by a series number of wind in
of storms storms
2017, andbut
in particular the subsequent
also in 2018, with a
accumulation of wood damaged by beetle infestation.
relatively high number of wind storms and in particular the subsequent accumulation of wood
The 3.9 % rise in the production index in 2018 indicates a The calamity wood is taken up by the sawmill industry
damaged by beetle infestation. The calamity
significant increase in domestic production in 2018.
wood is taken up by the sawmill industry according to
according to its possibilities, but requires high efforts by the
its possibilities, but requires high efforts by the domestic domesticsawmills
sawmillsto market
to market this
this wood
wood in terms
in terms of
of quantity
quantity
According andto thequality
quarterlyat home, but
production above
statistics all onupthe foreign
available markets.
and quality at home, but above all on the foreign markets.
to the third quarter of 2018, domestic production of sawn
Regionally,
softwood rosethe price
by 3.3 % todevelopment
17.3 million m3 for the
in the firstvarious
three softwood
Regionally,species and crude
the price wood assortments
development for the various was
quarters
very of 2018. The production
differentiated, of planed timber
also depending on theincreased softwood species
regional occurrence and crudewood
of calamity wood assortments was very
and the marketing
particularly strongly, by 11.4 % to 3.3 m . 3
differentiated, also depending on the regional occurrence of
possibilities. On the other hand, there is an increase in additional expenditure for the disposition and
calamity wood and the marketing possibilities. On the other
cutting of crude wood.
The production of unplaned timber increased by 1.6 % to 13.9 hand, there is an increase in additional expenditure for the
million m3. With the domestic market largely constant and disposition and cutting of crude wood.
exports rising sharply, the export ratio continued to rise in 2018.
Despite the high challenges in 2018, the earnings situation
The 2018 balance for softwood timber shows a further of the softwood sawmills should have improved again
increase in softwood timber production to just under 23 slightly, not least as a result of increased production and
million m , with another above-average increase in planed
3
thus improved capacity utilization and the good export
timber production. situation. At the turn of the year dark clouds gathered over
the horizon.
With slightly higher imports at 5.3 million m3, exports at
8.5 million m3 enabled a significant increase in domestic The industry is increasingly focusing on the diversification
production. Domestic consumption will only increase by of its softwood product range. The companies are
about 3 % to just under 20 million m3 in 2018. increasingly going into further processing and higher
87
The hardwood market continues to remain at a fixed level. Beech continues to record a stable
domestic market. Exports, which are decisive for hardwood companies, became much more difficult
last year, also due to the uncertainties arising from the US customs measures against China. Distance
sales, especially to China as by far the most important customer, fell by more than 20 thousand m³ or
- 12.9 % to 153 thousand m³ in 2018. The decline in exports to China and some other customer
countries led to a decline in total beechwood exports of 27 thousand m³ or - 4.8 % to 529.9 thousand
m³. product refinement. Further developed construction pre- Hardwood
products such as solid structural timber, laminated beam The hardwood market continues to remain at a fixed level.
timber and cross laminated timber. Increasing demands are Beech continues to record a stable domestic market.
also coming from the packaging sector. Exports, which are decisive for hardwood companies,
Export of sawn beech wood

Change
2018/2017
in m³ 2010 2015 2016 2017 2018 in %
VR China 97.414 138.112 129.117 176.059 153.330 -12,9
USA 37.282 63.058 65.875 69.575 71.251 2,4
Mexico 3.335 35.293 36.674 41.717 47.865 14,7
Poland 40.990 45.155 40.110 46.422 43.139 -7,1
India 16.831 14.303 16.034 15.356 16.473 7,3
France 11.173 13.149 13.532 15.907 16.009 0,6
Vietnam 4.173 8.245 10.037 14.470 15.771 9,0
Netherlands 20.554 11.792 11.652 11.931 14.150 18,6
Belqium 11.614 16.504 12.600 15.550 12.969 -16,6
UK 15.666 14.952 12.912 11.355 11.182 -1,5
Malaysia 6.940 9.968 7.777 7.146 10.751 50,4
Italy 16.718 11.550 9.852 10.777 10.297 -4,5
VAE 8.611 10.596 14.437 14.608 10.101 -30,9
Japan 4.252 8.041 9.287 9.664 7.876 -18,5
Morocco 2.657 5.860 6.490 8.806 6.268 -28,8
other countries 79.651 77.628 81.797 87.234 82.505 -5,4
total 377.861 484.206 478.183 556.577 529.937 -4,8
Source: Destatis, Foreign Trade
88 The market for sawn oak timber, which is however limited in terms of volume, is once again
characterised by lively demand.
© Shutterstock
became much more difficult last year, also due to the of the beech harvest. This resource is no longer available to
uncertainties arising from the US customs measures against the domestic sawmill industry.
China. Distance sales, especially to China as by far the most
important customer, fell by more than 20 thousand m3 or - 2019 with high uncertainty
12.9 % to 153 thousand m3 in 2018. The decline in exports to 2019 will be a difficult year for the German sawmill industry.
China and some other customer countries led to a decline The commodity material market continues to be burdened
in total beechwood exports of 27 thousand m3 or - 4.8 % to by a large amount of damaged wood from wind storms. It is
529.9 thousand m3. expected that the bark beetle will produce a large amount
of damaged wood, which must be harvested and processed
The market for sawn oak timber, which is however limited quickly in order to maintain its value. The management
in terms of volume, is once again characterised by lively of damaged wood is clearly at the centre of the sawmill
demand. industry’s efforts to limit damage.
Thanks to the solid market trend and exports, which are still Price pressure on sawn timber and residual timber prices
at a high level, it was possible to slightly expand production accelerated in Q1; the sales potential in Germany and other
of hardwood sawn timber in the first three quarters of 2018. European countries is low. The sawmill industry is dependent
on functioning sales markets for sales. The still unclear
The production of hardwood sawn timber rose by 4.0 % development of Brexit and the customs and foreign trade
to just under 890 thousand m3 with a strong increase in measures between the USA and China are placing a heavy
planed timber production of 10.3 % and at the same time burden on exports, especially the important long-distance
a slight decline in the production of unplaned timber (- 2.1 exports to the USA and the Far East. These uncertainties
%).The concerns of the hardwood sawmills about some make it particularly difficult to assess the course of 2019
negative market developments remained unchanged. For for both softwood and hardwood. In softwood, the good
example, there was a tendency for oak to increasingly offer foreign sales of 2018 will probably not be achieved.
logs through tenders. This deprives traditional regional
sawmills with knowledge of regional qualities and growth In hardwood, a slight increase in exports is expected in
characteristics of their raw materials. In the case of beech, 2019. On the other hand, a slight weakening of sales of sawn
it is the export of raw beech wood that removes a large part hardwoods is expected in Germany.
89
ITALY
Source: Federlegno, UNECE/FAO, European Commission and EUROCONSTRUCT

2016 2017 2018 2019
GDP (%) 1.1 1.6 1.0 0.2
Inflation rate (%) -0.1 1.3 1.0 1.2
Wage Development (%) 0.5 0.5 1.5 n.a.
sawmilling (h/week)

2016 2017 2018 2019
Production 950 970 950 950
Imports* 3 981 4 203 4 009 4 009
Exports 153 201 240 240
Consumption 4 778 4 972 4 719 4 719

2016 2017 2018 2019
Production 550 550 550 550
Imports 757 713 713 713
Exports 175 215 215 215
Consumption 1 132 1 048 1 048 1 048
2016 2017 2018 2019
Softwood 3 3 - -
Hardwood 2 3 - -
90
LATVIA
Source: Association of Latvian Timber Producers and Traders

2016 2017 2018 2019
GDP (%) 2.1 4.6 4.8 3.5
Inflation rate (%) 0.1 2.9 2.5 2.9
Unemployment rate (%) (15-64) 8.4 6.8 6.4 5.6
Buildings permits (units) 2376 3145 3338 3200
Housing starts (units) n.a. n.a. n.a. n.a.
Housing completions (units) n.a. n.a. n.a. n.a.
Average working time in n.a. n.a. n.a. n.a.
sawmilling (h/week)

2016 2017 2018 2019
Production 2 792 2 662 2 730 2 660
Imports 779 934 1 056 1 000
Exports 2 739 2 746 2 850 2 720

2016 2017 2018 2019
Production 690 596 650 600
Imports 29 28 41 20
Exports 472 417 448 395
2016 2017 2018 2019
Softwood 4 2 4 2
Hardwood 3 2 3 2
91
Market statement
Roundwood market in 2018 was highly influenced by (VMD), in 2018 those factors have brought additional 1
pulpwood price rally due to strong demand from Swedish/ million m3 logs on the market. Sawnwood global market
Finnish forest industry companies. Up to twice higher conditions have never been so unpredictable as today.
prices levels (compared with domestic market) for exported
pulpwood destroyed normal roundwood market conditions, Higher productivity in the hardwood sector was driven
leading to some shortages for mills which process smaller mainly by higher availability of low quality hardwood
logs. Overall, all types of small and average diameter logs sawlogs for packaging. 2018 was also characterized by
recorded an economically unreasonable price increase. strong export markets, but it looks like 2019 could be a
weaker year for exports.
In 2019 log availability will be lower comparing to last year.
During last year weather conditions with dry summer were In the middle term period forest land availability for forest
well above average for forestry works. Also, roundwood industry in Latvia and Lithuania could be strongly affected
high prices stimulated private forest owners’ higher activity. by biotope inventory. This process could reduce forest areas
According to latest statistics issued by State Forest Service available for harvesting, especially in Lithuania.
92
NORWAY
Source: Treindustrien, UNECE/FAO

2016 2017 2018 2019
GDP (%) 1.2 2.0 1.4 2.0
Inflation rate (%) 3.6 1.8 2.7 2.3
Housing starts (units) 36 203 35 273 31 647 n.a.
Housing completions (units) 29 394 31 557 32 884 n.a.
sawmilling (h/week)

2016 2017 2018 2019
Production 2 533 2 655 2 675 2 675
Imports 991 996 924 925
Exports 600 666 667 650
Consumption 2 924 2 985 2 932 2 950

2016 2017 2018 2019
Production - - - -
Imports 28 31 31 31
Exports - - - -
2016 2017 2018 2019
Softwood 2 2 2 2
Hardwood - - - -
93
Market statement
The upturn in Norwegian economy continues. Higher oil prices for upgrade and rehab of existing buildings. Changing
and low interest rates have contributed to this. Increased requirements for standards in office and public builings,
oil investments, digitization and high public investment demand for energy efficiency and public procurement
also contribute to lifting growth. The unemployment rate in contribute to this. The demand for building with wood is
Norway is still generally low compared to other European increasing in all markets, and wood is a preferred material
countries. Capacity utilisation is slightly above normal level. by many actors in the building sector. Through regulations
Consumer price inflation is just above the 2% target. The and public procurement authorites have pulled the market
key policy rate has been raised from 0.75 % to 1.0 %, and in the direction of using more wood. The government has
the forecast from Norway’s central bank is a slow increase, also made increased use of wood in buildings a part of the
reaching 1.75 % by the end of 2022. Annual wage growth in new political platform.
2018 was 2.8 %, in line with the wage settlement norm.
Specific market information
The housing market There has been record high production of sawn wood in
After years of house price growth, especially in Oslo, the 2018. The timber price is at a record high, and export is
price growth stabilized last year. House prices have risen increasing. This makes availability of sawlogs somewhat
slitghtly more than expected at the start of 2019. There has unstable. There is still some domestic pulpwood
been some concern that household debt growth in recent consumption, but export levels are high. Norwegian wood
years could affect the market, however household debt industry continue to perform well. We see investments
growth has slowed through 2018. The development relative being made both in sawmills and other parts of the wood
to housing starts is slowing down slightly, but is still at a high industry such as prefabrication, elements, CLT etc. The level
level compared to the level from 2009 – 2015. The market for of industrialisation and automation is highly increasing, and
new commercial buildings is still good, and so is the demand digitalization is high on the agenda.
© Shutterstock
94
ROMANIA
Source: Associatia Forestielor Din Romania (ASFOR)

2016 2017 2018 2019
GDP (%) 4.9 6.7 4.1 3.8
Inflation rate (%) -1.1 3.2 3.5 3.6
Buildings permits (units) n.a. 17 500 17 100 16 000
Housing starts (units) n.a. 12 500 12 500 12 000
Housing completions (units) n.a. n.a. n.a. n.a.
Wage development (%) 0.7 1.25 2.0 3.0
sawmilling (h/week)

2016 2017 2018 2019
Production 3 900 3 600 3 550 3 500
Imports 283 450 350 360
Exports 1 800 1 600 1 100 1 150
Consumption 2 383 2 450 2 800 2 800

2016 2017 2018 2019
Production 1 700 1 600 1 600 1 600
Imports 125 25 110 130
Exports 800 800 600 650
Consumption 1 025 825 1 110 1 080
2016 2017 2018 2019
Softwood 3 3 3 3
Hardwood 3 3 3 3
95
Market statement
• In 2018 beech lumber exports were lower than in 2017, • Exchange rates variations had major impacts on exports.
registering two different extremes: maximum prices in the Romanian Leu was -5% lower against Euro and Dollar
first half of the year and minimal prices in the second half; in 2019 and this depreciation has been felt by the entire
forest industry;
• During the previous year sawlogs imports reached 1.5
million m3 (wood in the rough stripped of its bark, shaped • The beechwood market has been dominated by exporters
or carved) which modified the standard commercial originating from China, Egypt and EU axis;
assessment;
• Difficulties during the process of firewood exploitation /
• The economical agents from the wood-processing the low demand from the industry have led to a decrease
industry were taken by surprise in 2018, as they were of the exploited wood volume and a limited availability of
either keeping wood stocks at high prices from spring, the beech logs resource.
suffering overall losses, or they confirmed decreased
wood stocks, registering smaller losses and therefore they
could reinitiate the production cycle in autumn;
© Shutterstock
96
SWEDEN
Source: Swedish Forest Industries Federation, UNECE/FAO

2016 2017 2018 2019
GDP (%) 3.0 2.4 2.4 1.5
Inflation rate (%) 1.9 1.8 2.0 2.0
Wage Development (%) 2.5 2.2 2.5 n.a.
sawmilling (h/week)

2016 2017 2018 2019
Production 18 011 18 309 18 300 18 600
Imports 160 180 180 180
Exports 13 000 13 110 12 440 13 000
Consumption 5 550 5 780 5 705 5 600

2016 2017 2018 2019
Imports 43 47 45 45
Exports 19 43 20 20
2016 2017 2018 2019
Softwood 3 3 3 4
Hardwood - - - -
97
Market statement
2018 was a good year for Swedish sawmills, with improved Our preliminary forecast is that the production will increase
profitability for most of the sawmills. only slightly or 2 per cent to 18.6 million m3 this year.
The European export markets, which stands for roughly Exports 2018: Decreasing volumes
60 per cent of the exported volume, were driven by high The table below shows the shipments from Swedish
activities in construction. The demand was stable, and sawmills to different markets last year. The total export
prices improved. The exchange rate of the Swedish krona volume was 12,4 million m3, which was five per cent less
has been favourable during the year. than in 2017.
The increasingly important non-European markets were Swedish softwood shipments 2018
Softwood (1000 m3) Change compared with
very active during the first half of the year. However, during last year
the second half of the year, the softwood price on the US- Sweden 5 705 -1%
market deteriorated from a record high level. The Chinese United Kingdom 2 587 0%
market, as well as the North African and the Middle East Germany 814 -8%
markets also worsened during the fall. The Netherlands 955 0%

Denmark 850 -1%
Norway 942 -6%
In this year 2019, the market balance for softwood has,
Other Europe 1 615
in general, changed in favour of buyers and prices have
Exports Europe 7 763 -2%
decreased from a relatively high level.
Egypt 917 -29%
Algeria 533 71%
Swedish Sawn Softwood Other Africa 608
2019 are estimates Middle East 468 -2%
Unit 2014 2015 2016 2017 2018 2019 Japan 724 -14%
Production 1.000 17 660 18 132 18 011 18 309 18 300 18 600 China 661 -28%
m3 Other Asia 291
Imports 1.000 150 170 160 180 180 180 USA 372 -8%
m3
Other 100
Exports 1.000 12 300 12 820 13 000 13 110 12 440 13 000
m3 Total exports 12 437 -5%
Consumption 1.000 4800 5253 5550 5780 5705 5600 Total shipments 18 300 0%
m3
Swedish softwood production 2018 The export to United Kingdom, the largest export market,
Despite the improving market conditions during 2018, remained unchanged during 2018.
Swedish softwood production remained unchanged at
18.3 million m3. Since 2015, the Swedish production has, in The European “quartet” Germany, Denmark, Norway and
fact, remained more or less unchanged, in contrast to the the Netherlands are all important markets for Swedish
relatively fast-growing global production and consumption. sawmills. All of them import each year 800.000 to one million
m3 of Swedish wood. In general, the European market has
However, during the first quarter of this year, the production been characterized by stable but moderate growth during
increased by seven per cent compared with the same last years. From now, the growth of softwood consumption
period last year. This year, the raw material supply and is forecasted to slow down somewhat.
sawmill operations have been favoured by better weather
conditions than last year. Exports to the North African and Middle East region
(mainly redwood markets for the Swedish sawmills) continued
Ongoing bark beetles’ infestations in southern Sweden is to decrease during last year. Exported volumes to Egypt
forecasted to kill 2-12 million m3 of spruce trees this year. decreased by no less than 29 per cent to 916.000 m3, the lowest
However, the impact on raw material supply is supposed to volume since 2008. On the other hand, exports to the Algeria
be relatively marginal. jumped back to 533.000 m3, an increase by 71 per cent.
98
© Shutterstock
Despite very good prices on the North American market during the first half year, exports to the USA
decreased marginally to 372.000 m3.
Last year the volumes to the East Asian markets decreased With a softwood consumption of 5.7 million m3, Sweden is
for the first time since 2014. Especially the volumes to China the single largest market for the Swedish sawmills. Up to last
With a softwood consumption of 5.7 million m3, Sweden is the single largest market for the Swedish
decreased (-28%), after a fantastic development during the year, demand has been driven by strong housing activity.
sawmills. Up to last year, demand has been driven by strong housing activity. However, the
previous six-year period. However, the construction activity is now decreasing from
construction activity is now decreasing from a high level. On the other hand, the share of multi storey
a high level. On the other hand, the share of multi storey
houses build with wood is now increasing. For example, several investments in CLT-production is now
Despite very good prices on the North American market houses build with wood is now increasing. For example,
under way in Sweden. The repair and maintenance activity, which consumes large volumes of wood,
during the first half year, exports to the USA decreased several investments in CLT-production is now under way
remains on a stable level.
marginally to 372.000 m3. in Sweden. The repair and maintenance activity, which
consumes large volumes of wood, remains on a stable level.
99
SWITZERLAND
Source: Holzindustrie Schweiz

2016 2017 2018 2019
GDP (%) 1.3 1.0 2.5 1.1
Inflation rate (%) -0.4 0.5 0.9 0.5
Housing starts (units) n.a. n.a. n.a. n.a.
sawmilling (h/week)

2016 2017 2018 2019
Production 1 074 1 037 1 075 1 065
Imports 348 342 333 340
Exports 190 198 198 196
Consumption 1 232 1 181 1 210 1 209

2016 2017 2018 2019
Imports 46 37 35 35
Exports 17 25 20 21
2016 2017 2018 2019
Softwood 4 4 5 3
Hardwood 3 3 3 3
100
Market statement
The Swiss economy benefited from an economically wood-based insulation boards. As a result, Switzerland
strong year in Europe and achieved GDP growth of 2.5% is losing an important client for residual wood. A stable
in 2018. volume development is expected for the current year 2019,
albeit at falling prices. The timber industry will continue to
The construction industry and its supplier industries be well supplied with a high proportion of beetle-infested
benefited greatly from this, as the high number of buildings wood.
constructed shows. Sawn timber production in sawmills
increased by 3.5% in 2018 compared with the previous The Swiss timber industry is still struggling with the strong
year, following a steady decline in the years before. The Swiss franc. Fortunately, however, efforts to position the
positive sales trend was favoured by the exceptionally Swiss timber origin mark “Herkunftszeichen Schweizer
high supply of raw materials following several windstorm Holz” on the market are increasingly noticeable. Swiss
events in 2018. customers are increasingly demanding Swiss timber.
These efforts will be continued. Various sawmills are
Demand for residual wood remains probably high in currently investing in processing technology (glulam, CLT),
2019. The situation on the Swiss residual wood market is which points to a positive market estimate for the coming
dampened by the closure of PAVATEX, a market leader in years.
© Shutterstock
101
UNITED KINGDOM
Source: UNECE/FAO, European Commission and EUROCONSTRUCT

2016 2017 2018 2019
GDP (%) 1.8 1.8 1.4 1.3
Inflation rate (%) 0.7 2.7 2.5 1.8
Buildings permits (units) n.a. n.a. n.a. n.a.
sawmilling (h/week)

2016 2017 2018 2019
Production 3 624 3 728 3 650 3 800
Imports 6 219 7 079 6 564 6 675
Exports 167 166 194 203
Consumption 9 676 10 641 10 020 10 272

2016 2017 2018 2019
Imports 427 501 501 501
Exports 21 25 23 23
102
Holzindustrie Schweighofer
Perfection in Timber
Did you know that...

Holzindustrie Schweighofer is one of Europe’s leading
wood processing companies, operating three modern ... Holzindustrie Schweighofer processes only 6.5% of
sawmills and two panel factories in Romania as well as a the entire wood harvested in Romania?
sawmill in Germany. The company produces high-quality ...around 50% of the wood Holzindustrie Schweighofer
timber products for industrial customers in more than 70 processes in Romania is imported?
countries worldwide. Currently, Holzindustrie Schweig- ... Holzindustrie Schweighofer does not have any
hofer employs around 3,100 people. harvesting operations, but focusses on processing?
...the company passed 12 EUTR (EU Timber Regula-
tion) controls without complaints since 2015?
Romania‘s forest is growing
Romania‘s forests are growing each year. Hardwoods are

increasing by 39 mn m³/year, of which only 12 mn m³ are
harvested. Softwoods are growing by 19 mn m³ per year, of
which only 7mn m³ are harvested. And only a minor fraction
(1.1 mn m³) is consumed by Holzindustrie Schweighofer‘s mills.
Source: Romanian National Forest Inventory 2018; all volumes are indicated according to the Romanian roundwood measurement standards
Unique security architecture: CSR at a glance:

GPS tracking system Timflow Planting Tomorrow‘s Forest in Romania
In Romania, Holzindustrie Schweighofer uses the GPS Holzindustrie Schweighofer has launched the afforestati-
tracking system Timflow which monitors each saw log on project Tomorrow’s Forest in cooperation with the As-
truck’s exact transport route, from the loading point to sociation of Forest Administrators (AAP) and the Stefan
the mill gate. This is a voluntary system, surpassing all cel Mare University of Suceava. With a budget of 1 million
legal requirements by far. All collected data, including Euros, the project aims at planting one million trees on
the GPS data of the transport routes and photos of the degraded forest land in Romania. For further information
loaded trucks, is public on www.timflow.com. please visit: https://padureademaine.ro/en/
www.schweighofer.at
Special Focus:
The European Parquet
Market - Challenges &
EOS Annual Report - Special Topic
EOS Annual Report - Special Topic
The European Parquet
The European Parquet Market - Challenges & Opportunities
Opportunities

by Mrs Isabelle Brose, FEP Managing Director
by Mrs Isabelle Brose, FEP Managing Dire
FEP is the European Federation of the P

FEP is the European Federation of the Parquet industry based in Brussels. It reunites 52 European Parquet Producers,
Parquet Producers, 17 major Suppliers t
17 major Suppliers to the industry and 8 National associations and represents their interests at all relevant levels.
their interests at all relevant levels.
by Mrs Isabelle Brose, FEP Managing Director
FEP European
is the European Federation of the The European Parquet Market in 2017
The Parquet Market inParquet
2017 industry based in Brussels. It reunites After several years of a challenging situa
52 European
Parquet Producers, 17 major Suppliers to the industry and 8 National associations and represents
turned positive in 2016 and progressed f
their interests at all relevant levels. although renovation should create additio
After several years of a challenging situation, the general national associations thus point to a slight growth of the

trends on the parquet market eventually turned positive global European market of 0,3% in 2017 In 2017, parquet consumption
compared to continue
economic context, especially from the gro
in 2016 and progressed further in 2017. Projects were the 2016, and a consumption which exceeds 79 million m . 3
shown by the construction sector. Regre
The European Parquet Market in 2017
main driver of the market although renovation should reported a significant decline in parqu
create additional activity. In terms of consumption per country, member
Germany companies
remains and affiliated nation
After several years of a challenging situation, the general trends on the parquet market eventually
European market of 0,3% in 2017 compa
in first position, despite its declining market,
turned positive in 2016 and progressed further in 2017. Projects were the main driver of the market m².
with 21,2%
In 2017, parquet consumption continued to increase
although renovation should create additional activity. and is followed by France at 10,7%. Sweden completes
in the EU benefiting from the encouraging economic the podium with 10%. The Nordic Cluster (Denmark,
In 2017, parquet consumption continued
context, especially from the growth of the European to increase in the
Finland, EU benefiting
Norway) at 8,4% keepsfrom
thethe encouraging
fourth seat. Austria
economic context, especially from the growth of the European consumption, and the positive trends
consumption, and the positive trends shown by the with 8,1% takes back its fifth position from Italy (8%)
shown by the construction sector. Regretfully, Germany, the biggest European market for parquet,
construction sector. Regretfully, Germany, the biggest while Switzerland (7,9%) comes in seventh position only.
reported a significant decline in parquet
European market for parquet, reported a significant consumption. The consolidated data provided by FEP
member
decline companies
in parquet and affiliated
consumption. The national associations
consolidated thus the
As regards point
perto a slight
capita growth
parquet of the global
consumption, Sweden
data provided by FEP member companies and affiliated keeps the first seat (0,78 m ) before Austria (0,74 m3)
European market of 0,3% in 2017 compared to 2016, and a consumption which exceeds 79 million 2
m². Source: FEP
In terms of consumption per country, Ger

with 21,2% and is followed by France at 1
Cluster (Denmark, Finland, Norway) at 8
fifth position from Italy (8%) while Switze

Source: FEP
Source: FEP
In terms of consumption per country, Germany remains in first position, despite its declining market,
with 21,2% and is followed by France at 10,7%. Sweden completes the podium with 10%. The Nordic
104
Cluster (Denmark, Finland, Norway) at 8,4% keeps the fourth seat. Austria with 8,1% takes back its
Total FEP Consumption
Percentages for 2017
AT BE
8,13% 2,96%
DK/FIN/NO SE CH
RO 8,40% 9,98% 7,87%
3,28% Total FEP Consumption
Percentages for 2017 CZ
PT AT BE 1,30%
0,66% 8,13% 2,96%
PL
5,30%
DK/FIN/NO CH
SE
RO 8,40% 9,98% 7,87%
3,28%
NL FR CZ DE
2,85% PT 10,70% 1,30%
21,21%
0,66% HR
IT PL
0,63%
8,02% 5,30% ES
HU 7,10% EE
NL 0,64% 0,99%
2,85%
FR DE
10,70% 21,21%
HR
Source: FEP IT 0,63%
8,02% ES
HU 2
As regards the per capita parquet consumption, Sweden keeps the first seat (0,78 m
7,10% EE ) before Austria
0,64%
2 0,99%
Source: FEP
(0,74 m²) and Switzerland (0.73 m
). In the total FEP area, the consumption per inhabitant remains
stable at 0,18 m² in 2017.
Source: FEP
As regards the per capita parquet consumption, Sweden keeps the first seat (0,78 m2) before Austria
(0,74 m²) and Switzerland (0.73 m2). In the total FEP area, the consumption per inhabitant remains
stable at 0,18 m² in 2017.
Source: FEP

Source: FEP

The production in FEP territory confirmed its growth by 2,6% and exceeded significantly the 72
Source: FEP Total FEP Production
million m2 threshold in 2017. In absolute production figures by country, Poland maintains its top
Percentages for 2017
DK/FIN/NO AT
The production in FEP territory confirmed its growth by 13,06%
2,6% and exceeded CH
significantly the 72
position at 19,2%. Sweden consolidates its second place on the podium with 15,5%. It is followed by
3,57% BE 2,56%
million m 2
threshold in 2017. In absolute production figures by 0,56% Poland maintains its top
country,
Austria at 13%, while Germany comes in as fourth (10,5%).
RO SE
CZ
position at 19,2%. Sweden consolidates its second place on the podium with 15,5%. It is followed by
15,50%
3,87% 1,87%
Austria at 13%, while Germany comes in as fourth (10,5%).
PT DE
1,17% 10,47%
EE
0,79%
PL ES
19,17% 6,43%
NL FR
3,20% IT HU HR 7,57%
3,28% 3,13% 3,80%
Source: FEP

Source: FEP
The European production outside FEP countries is at an estimated 14,5 million m2 – 9 million m2 105
produced in EU countries and 5,5 million m2 in European non-EU countries.
The 2017 total parquet production per type remains similar to the picture already presented from
2010 onwards, whereby multilayer comes in first with 81% (compared to 80% in 2016), being
followed by solid (including lamparquet) with 17% (compared to 18%) and mosaic at 2% of the total
cake. EOS ANNUAL REPORT 2018 - 2019

Production per type - 2017

Mosaic Solid
2% 17%
Multilayer
81%
Source: FEP
and Switzerland (0.73 m2). In the total FEP area, the The European production outside FEP countries is at
consumption per inhabitant remains stable at 0,18 m3 in

an estimated 14,5 million m2 – 9 million m2 produced
Source: FEP
2017. in EU countries and 5,5 million m2 in European non-EU
First results for 2018 countries.
The production in FEP territory confirmed its growth
After three years of moderate growth or stabilisation, and despite a generally good start of the year,
by 2,6% and exceeded significantly the 72 million m2 The 2017 total parquet production per type remains
the consumption figures of parquet in Europe downturned for 2018. A drop close to 2% is forecasted
threshold in 2017. In absolute production figures by similar to the picture already presented from 2010
for the whole year. FEP wishes to stress that
country, Poland maintains its top position at 19,2%.this is a first
onwards, prognosis
whereby subject
multilayer to invariations,
comes in
first with 81%
anticipation of the complete data to be communicated at FEP’s annual General Assembly mid-June
Sweden consolidates its second place on the podium (compared to 80% in 2016), being followed by solid
with 15,5%. It is followed by Austria at 13%, while
in Lisbon, Portugal. (including lamparquet) with 17% (compared to 18%) and
Germany comes in as fourth (10,5%). mosaic at 2% of the total cake.

First results for 2018
After three years of moderate growth or stabilisation, subject to variations, in anticipation of the complete data
and despite a generally good start of the year, the to be communicated at FEP’s annual General Assembly
consumption figures of parquet in Europe downturned mid-June in Lisbon, Portugal.
for 2018. A drop close to 2% is forecasted for the whole
year. FEP wishes to stress that this is a first prognosis
Use of wood species

The usage of wood species in 2017 as shown on the The export bans in place in Belarus, Russia or Ukraine
above graph indicates that the share of oak remains have impacts on the oak procurement as had the
stable and reaches 80,6%, compared to 80,8% in 2016. phytosanitary measures unilaterally taken by Croatia
Tropical wood species use continues to represent 4,0% within the EU Internal Market. Furthermore, as efficient
of used wood. Ash and beech remain the two other most harvesting has been demanded from forest-owners and
common chosen species with 6,2% and 2,4% (compared sawmillers, small formats are now unfortunately lacking.
to 5,7% and 2,5% in 2016) respectively.
Obviously, softwood and wood-based panels are also
As long as oak represents more than 80% of the wood used to produce other than the top-layer of engineered
used to produce parquet top-layer, any variation in flooring.
its availability can be problematic for the industry.
106

Use of wood species
parquet market share from 5 to 7%. The objective of the project is t

the messages already developed for the Real Wood initiative to
account the importance of Social Media. The project tries to focu
Source: FEP
communication stages, channels and contents to help driving the
Source: FEP flooring solutions.
Challenges & Opportunities
The usage of wood species in 2017 as shown on the above graph indicates that the share of oak
remains stable and reaches 80,6%, compared to 80,8% in 2016. Tropical wood species use continues
Besides the problem of oak availability, the parquet
to represent 4,0% of used wood. Ash and beech remain the two other most common chosen species
industry is confronted with the harsh competition from
with 6,2% and 2,4% (compared to 5,7% and 2,5% in 2016) respectively.
“wood look flooring substitutes” - laminate but also
and
As increasingly LVT represents
long as oak (Luxury Vinyl more
Tiles). than 80% of the wood used to produce parquet top-layer, any

variation in its availability can be problematic for the industry. The export bans in place in Belarus,
The widespread misuse of the “PARQUET” The principle is to convince the end-consumer that parquet remain
The principle is to convince the end-consumer that parquet
Russia or Ukraine have impacts on the oak procurement as had
flooring the made
solution phytosanitary measures
denomination, which causes a growing and unjust remains the genuine original, theof only
sustainable
flooring and renewable raw mate
solution
unilaterally taken by Croatia within the EU Internal Market. Furthermore, as efficient harvesting has
sustainably managed and expanding forests!
confusion at consumer level, is also gaining in importance. made of sustainable and renewable raw material Real Wood,
been demanded from forest-owners and sawmillers, small formats are now unfortunately lacking.
According to the norm EN 13756, “parquet is a wood While the parquet sector is facing numerous challenges, FEP welcom
coming from sustainably managed and expanding forests!
flooring systemsoftwood
Obviously, consistingand
of awood-based
face of solidpanels
wood of are also used the EU authorities of the positive contribution of wood products, in
to produce other than the top-layer of
minimum 2,5 mm and with or without additional layer(s)”. While theChange and to support Circular Economy, Circular Bioeconomy & sus
parquet sector is facing numerous challenges, FEP
engineered flooring.
welcomes the increasing
Parquet recognition
is and remains the by theReal
only EU authorities
Wood flooring which allow

Parquet remains at a 5% market share among all flooring of the positive contribution of wood products, including
building a better future!
solutions despite the fact that everybody wants parquet
Challenges & Opportunities parquet, to fight Climate Change and to support Circular
as stressed by the three studies FEP has conducted on Economy, Circular Bioeconomy & sustainability.
theBesides
“European the Consumers
problem Perceptions
of oak availability,
& Expectationsthe parquet industry is confronted with the harsh
competition from “wood look flooring substitutes” - laminate but also and increasingly LVT (Luxury
towards Parquet”. In order to sensitize the European Parquet is and remains the only Real Wood flooring
Vinyl Tiles).
consumer to opt for parquet as “THE” flooring solution, which allows bringing nature in home and building a
FEP is working on the 5-2-7 Project, aiming at increasing better future!
The widespread misuse of the “PARQUET” denomination, which causes a growing and unjust
the parquet market share from 5 to 7%. The objective
confusion at consumer level, is also gaining in importance. According to the norm EN 13756,
of the project is to communicate more efficiently More information is available on:
“parquet is a wood flooring system consisting of a face of solid wood of minimum 2,5 mm and with
the messages already developed for the Real Wood www.realwoodqualityfloors.com
or without additional layer(s)”.
initiative to the end-consumers, taking into account the www.realwood.eu
importance of Social Media. The project tries to focus www.parquet.net
Parquet remains at a 5% market share among all flooring solutions despite the fact that everybody
dedicated efforts on
wants parquet as the right communication
stressed stages, FEP has conducted on the “European Consumers
by the three studies
channels and contents to help driving the decision on More information is available on:
EOS expresses gratitude to Ms Isabelle Brose for her
Perceptions & Expectations towards Parquet”. In order to sensitize the European consumer to opt
parquet vs. other flooring solutions. preciouswww.realwoodqualityfloors.com
contribution to the EOS Annual Report 2018/2019
for parquet as “THE” flooring solution, FEP is working on the 5-2-7 Project, aiming at increasing the
www.realwood.eu
www.parquet.net
107
EOS expresses gratitude to Ms Isabelle Brose for her precious contrib
5. The Construction Industry

in Europe
EOS expresses gratitude to Mr Orifjon Abidov, Economic Adviser of EPF (European Panel Federation) for his kind contribution
to this EOS Annual Report Chapter.
5.1 The Construction Industry in Europe

In 2018, the European construction activity measured by the After increasing by a total of 11.8% between 2015 and 2018,
construction output according to Euroconstruct registered the construction output is expected to grow further by 4.9%
an increase for the fifth year in a row of 2.8% in comparison by 2021. However, there is still a lot to recover from the pre-
with 2017. The construction market was characterised by crisis level with the construction output in 2021 still forecast to
two major developments in 2018. Firstly, the growth in be 15% below the 2007 peak. However, when eliminating the
construction activity slowed down substantially last year extreme situations in Ireland, Spain and Portugal, the level of
from a growth peak of 4.5% (volume) registered in 2017. output would be recovered for the sum of the other countries.
Secondly, except in the UK the construction output increased
in all countries (members of Euroconstruct) in 2018. In Eastern Europe, all four countries, members of Euroconstruct,
registered an increase with Hungary registering the largest
The growth in Eastern Europe reached 13.4% partly thanks growth (+24.7%) followed by Poland (+12.9%). In Western
to the continued availability of EU funds in the majority Europe, construction activity increased significantly in Portugal
of countries which pulled up the non-residential and civil (+7.6%, though coming from a very low level), Netherlands
engineering construction activities. In Western Europe, (+6.3%), Ireland (+6.1%) and Spain (5.7%), the latter two also
the construction output moved up by 2.2% in 2018. The from a very low level. On the other hand, the construction
favourable construction output was driven by economic activity contracted in the UK (-0.8%) probably caused by
growth, which had positive implications for household uncertainty from the Brexit process. The other countries of
income, corporate profits and the state of public finances. the region registered a more stable situation with a moderate
growth of their construction output between 1% and 3.2%.
Figure 5.1: Growth rates of the different segments of the European construction market, 2018
108
109
Table 5.1: Overview of the construction industry in Western and Eastern Europe in million EUR in 2017 and 2018
total construction* new residential residential renovation new non-residential non-residential new civil engineering civil renovation
renovation
2017 2018 % 2017 2018 % 2017 2018 % 2017 2018 % 2017 2018 % 2017 2018 % 2017 2018 %
Austria 40.068 40.991 2,3% 12.009 12.333 2,7% 5.336 5.443 2,0% 11.102 11.368 2,4% 3.606 3.671 1,8% 6.412 6.553 2,2% 1.603 1.622 1,2%
Belgium 44.689 45.717 2,3% 8.956 9.529 6,4% 12.228 12.350 1,0% 9.618 9.099 -5,4% 6.744 6.852 1,6% 5.325 6.049 13,6% 1.818 1.838 1,1%
Denmark 31.191 32.018 2,7% 3.840 4.109 7,0% 11.366 11.593 2,0% 4.604 4.774 3,7% 3.854 3.931 2,0% 4.923 4.957 0,7% 2.604 2.653 1,9%
Finland 33.161 34.096 2,8% 6.719 7.371 9,7% 7.460 7.535 1,0% 7.195 7.389 2,7% 5.138 5.164 0,5% 4.865 4.850 -0,3% 1.784 1.788 0,2%
France 216.054 223.018 3,2% 45.538 47.132 3,5% 61.994 62.428 0,7% 29.401 32.076 9,1% 35.568 35.390 -0,5% 25.348 26.767 5,6% 18.205 19.224 5,6%
Germany 327.816 331.987 1,3% 60.901 64.555 6,0% 124.773 124.149 -0,5% 33.820 34.327 1,5% 51.154 51.410 0,5% 30.642 30.489 -0,5% 26.526 27.057 2,0%
Ireland 20.379 21.622 6,1% 4.116 5.561 35,1% 3.994 4.114 3,0% 7.679 7.226 -5,9% 1.310 1.275 -2,7% 2.530 2.662 5,2% 750 785 4,7%
Italy 165.587 168.382 1,7% 14.415 14.905 3,4% 67.685 68.226 0,8% 15.697 16.262 3,6% 33.569 34.106 1,6% 11.551 11.759 1,8% 22.670 23.123 2,0%
Netherlands 75.151 79.897 6,3% 12.965 14.132 9,0% 18.623 19.331 3,8% 10.979 11.956 8,9% 11.055 11.486 3,9% 14.164 15.325 8,2% 7.365 7.667 4,1%
Norway 46.286 46.731 1,0% 11.128 10.037 -9,8% 8.073 8.218 1,8% 7.334 7.121 -2,9% 8.769 8.901 1,5% 7.900 9.267 17,3% 3.082 3.187 3,4%
Portugal 17.019 18.319 7,6% 2.626 2.757 5,0% 5.489 6.312 15,0% 2.775 2.925 5,4% 1.176 1.247 6,0% 3.904 4.006 2,6% 1.049 1.072 2,2%
Spain 101.480 107.302 5,7% 31.230 34.665 11,0% 17.870 18.317 2,5% 18.940 19.698 4,0% 13.740 14.015 2,0% 12.780 13.100 2,5% 6.920 7.508 8,5%
Sweden 43.539 44.394 2,0% 11.685 12.036 3,0% 7.719 7.742 0,3% 6.611 6.234 -5,7% 6.875 7.068 2,8% 6.891 7.387 7,2% 3.758 3.927 4,5%
Switzerland 62.278 63.846 2,5% 21.752 21.839 0,4% 8.371 8.379 0,1% 8.858 9.044 2,1% 10.220 10.445 2,2% 4.639 4.908 5,8% 8.438 9.231 9,4%
UK 212.746 210.994 -0,8% 52.384 53.746 2,6% 39.991 39.351 -1,6% 63.111 59.829 -5,2% 24.144 24.192 0,2% 22.409 22.633 1,0% 10.707 11.242 5,0%
Total 1.437.444 1.469.315 2,2% 300.264 314.707 4,8% 400.972 403.489 0,6% 237.724 239.330 0,7% 216.922 219.151 1,0% 164.283 170.712 3,9% 117.279 121.926 4,0%
Western
Europe
Czech 17.684 19.456 10,0% 3.330 3.670 10,2% 939 1.096 16,7% 5.040 5.504 9,2% 3.802 4.323 13,7% 1.463 1.483 1,4% 3.110 3.381 8,7%
Republic
Hungary 10.828 13.502 24,7% 1.551 2.714 75,0% 1.379 1.448 5,0% 2.342 2.738 16,9% 2.129 2.342 10,0% 1.828 2.248 23,0% 1.599 2.012 25,8%
Poland 49.185 55.513 12,9% 10.091 11.342 12,4% 3.337 3.454 3,5% 13.070 14.965 14,5% 8.202 8.538 4,1% 9.205 11.690 27,0% 5.280 5.523 4,6%
Slovak 4.948 5.239 5,9% 760 879 15,7% 466 500 7,3% 1.405 1.370 -2,5% 696 640 -8,0% 1.393 1.589 14,1% 228 260 14,0%
Republic
Total 82.645 93.710 13,4% 15.732 18.606 18,3% 6.121 6.498 6,2% 21.857 24.577 12,4% 14.829 15.843 6,8% 13.889 17.012 22,5% 10.217 11.175 9,4%
Eastern
Europe
Total Europe 1.520.089 1.563.024 2,8% 315.996 333.313 5,5% 407.093 409.987 0,7% 259.581 263.906 1,7% 231.751 234.994 1,4% 178.172 187.724 5,4% 127.496 133.101 4,4%
Source: Euroconstruct
* total construction also includes services/construction by other sectors, DIY, black economy
The “new construction” sub-segments registered the progression with +5.5% followed by “civil engineering new”
largest increase of 4.1% when compared with “renovation” at +5.4%.
(+1.5%). The “new residential” segment showed the largest
Figure 5.2: Relative share of the different segments in the overall construction market in Europe, 2018
With a stable share of 47%, residential construction remains rank second, accounting for 32%, while civil engineering
the building sector’s main branch. Non-residential buildings projects account for the remaining 21%.
© Shutterstock
110
5.1.1 Residential Construction

Table 5.2: Total residential construction volume in Europe in million EUR and annual increases, 2017-2021
Total volume x million EUR % change
(current prices) 2017 2018* 2019** 2020** 2021**
Austria 17,345 2.5 1.5 1.3 0.6
Belgium 21,184 3.3 1.7 2.8 2.6
Denmark 15,206 3.3 3.5 2.9 2.5
Finland 14,179 5.1 -1.8 -2.4 -2.7
France 107,532 1.9 -2.1 -2.0 1.6
Germany 185,674 1.6 0.5 -0.3 -1.0
Ireland 8,110 19.3 15.7 9.9 9.5
Italy 82,100 1.3 1.5 1.4 1.4
Netherlands 31,588 6.0 3.4 3.6 2.9
Norway 19,201 -5.0 -4.0 1.3 2.5
Portugal 8,115 11.8 11.1 9.7 8.4
Spain 49,100 7.9 6.4 3.2 -1.2
Sweden 19,404 2.0 -12.3 -3.5 -6.1
Switzerland 30,123 0.3 -2.7 -2.4 -0.9
UK 92,375 0.8 2.7 3.9 0.7
Total Western Europe 701,236 2.4 0.9 1.0 0.6
Czech Republic 4,269 11.6 9.1 6.9 11.6
Hungary 2,930 42.1 9.3 -9.7 -2.1
Poland 13,428 10.2 6.8 4.5 5.2
Slovak Republic 1,226 12.5 5.1 -2.8 -2.5
Total Eastern Europe 21,853 14.9 7.6 2.2 5.0
Total Europe 723,089 2.8 1.1 1.0 0.7
* estimate
** forecast
Following the significant growth of 6.1% in 2017, the total in residential construction came from the Western area.
residential construction is estimated to have grown by a Although at a decelerating pace, the outlook is quite positive
further of 2.8% in 2018. Growth is considerably higher in with residential building activity projected to continue to
Eastern Europe (+14.9%) than in Western Europe (+2.4%), increase by +1.1% in 2019, +1% in 2020 and +0.7% in 2021,
but since the volume of construction in euro terms is much again with Eastern Europe registering the highest increases.
smaller in Eastern Europe, 93% of the total European growth
111
At a national level, in 2018, residential construction from 1.8% to 12.3% this year. In 2020, a similar trend is
contracted only in Norway (-5%), while except in Finland forecast for Hungary and Slovak Republic where respectively
(where it accelerated from 3.2% in 2017 to 5.1% in 2018) 9.3% and 5.1% growth in 2019 is forecast to turn into a
the growth slowed down in all countries. In 2019, housing contraction in 2020 (-9.7% for Hungary and -2.8% for Slovak
construction is forecast to contract again in Norway, Republic). Another significant change is a trend reversal in
while the positive growth in Finland, France, Sweden and Spain, where 3.2% growth of total residential construction
Switzerland in 2018 will likely turn into a contraction ranging in 2020 is predicted to turn into contraction in 2021 (-1.2%).
Table 5.3: Finished single and two-family dwellings forecasts for the Western and Eastern European
countries x 1,000 dwellings, 2017-2021
2017 2018* 2019** 2020** 2021**
Austria 17.1 17.2 17.2 17.2 17.4
Belgium 18.9 18.1 19.1 18.2 19.3
Denmark 6.5 7.0 8.0 8.0 8.5
Finland 7.4 7.3 7.4 7.6 7.8
France 162.7 164.0 172.0 159.0 145.0
Germany 178.9 195.0 205.0 215.0 220.0
Ireland 12.2 16.3 20.6 24.1 27.5
Italy 29.6 30.6 31.7 32.7 33.4
Netherlands 38.1 33.0 36.0 41.0 45.0
Norway 10.4 10.8 10.2 10.4 11.1
Portugal 5.0 6.3 7.2 8.3 8.7
Spain 13.5 17.0 20.0 23.0 25.0
Sweden 17.9 17.6 14.7 12.8 11.0
Switzerland 6.5 7.0 7.1 7.1 7.0
UK 144.5 152.3 154.5 156.9 155.6
Western Europe 669.2 699.5 730.7 741.3 742.3
Czech Republic 15.9 18.6 21.3 24.8 27.8
Hungary 7.0 12.0 13.0 10.0 10.0
Poland 82.4 85.0 90.0 95.0 95.0
Slovak Republic 11.5 12.7 13.5 13.0 13.0
Eastern Europe 116.8 128.3 137.8 142.8 145.8
Total Europe 786.0 827.8 868.5 884.1 888.1
* estimate
** forecast
112
The number of completions of new single and two-family 2021 in Germany. France is the second largest market in this
dwellings upturned strongly in 2018 with 5.3% growth. In segment with 20% of market share in 2018 or 164,000 units.
the following years, the upturn is expected to slow down In 2019, the completion of single and two-family dwellings
significantly from 4.9% in 2019 to 0.5% in 2021. The largest in France is likely to increase before contracting in 2019 and
market for finished one and two-family dwellings in Europe in 2020. Nonetheless, finished single and two-family homes
is Germany with 24% of market share in 2018 or 195,000 are expected to be substantial drivers for growth in wood-
units (see Table 5.4). The completion of one and two-family based panel consumption in the next years.
dwellings is expected to increase to peak at 220,000 units in
Table 5.4: Finished flats forecast for the Western and Eastern European countries x 1,000 dwellings,
2017-2021
2017 2018** 2019** 2020** 2021**
Austria 34.9 39.3 41.6 42.5 42.8
Belgium 29.2 29.6 31.9 30.4 32.2
Denmark 19.0 20.5 21.0 22.0 23.0
Finland 28.3 34.7 35.1 30.4 25.2
France 204.7 244.0 263.0 247.0 238.0
Germany 178.9 195.0 205.0 215.0 220.0
Ireland 2.2 2.7 3.4 3.9 4.5
Italy 51.0 52.9 55.2 56.8 58.1
Netherlands 24.9 34.0 32.0 31.0 31.0
Norway 21.1 24.6 24.0 19.6 18.4
Portugal 3.6 4.4 5.1 5.9 6.1
Spain 41.1 53.0 65.0 77.0 85.0
Sweden 46.0 52.9 48.7 41.8 40.5
Switzerland 49.3 49.8 48.2 46.8 46.6
UK 43.2 37.7 40.4 41.9 44.4
Western Europe 777.4 875.1 919.6 912.0 915.8
Czech Republic 12.7 12.5 14.1 15.8 17.0
Hungary 7.4 18.0 22.0 15.0 15.0
Poland 95.9 103.0 110.0 115.0 127.0
Slovak Republic 5.4 7.1 5.7 5.3 5.0
Eastern Europe 121.4 140.6 151.8 151.1 164.0
Total Europe 898.8 1,015.7 1,071.4 1,063.1 1,079.8
* estimate
** forecast
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The turnaround for completions of flats came already in million dwellings (+19%) in 2019 (see Table 5.5). However,
2014 after the very poor showing in the previous years. The the growth in 2020 is forecast to halt with both Western
number of finished flats continued to post a double-digit and Eastern Europe registering a mild contraction. In 2021,
growth in 2018 in both Eastern (+16%) and Western (+13%) completions of flats will likely increase in Eastern Europe
Europe. Despite declining growth rates in 2019, the total (+8.5%) with flat development in Western Europe, which
number of finished flats in Europe is projected to register an means that at the European level the number of finished
increase from nearly 900,000 units in 2017 up to over one flats is forecast to increase by 1.6%.
Figure 5.3: Relative share of the Western and Eastern European countries in the overall residential
construction market, 2018
Germany represents about 25.4% of the overall residential Housing renovation is not expected to grow as fast, but
construction market in Europe in 2018 according to records healthy production levels currently. An improvement
Euroconstruct (see Figure 5.3), followed by France (14.7%), of 0.7% for Europe is driven essentially by a positive trend
the United Kingdom (12.5%), Italy (11.2%) and Spain (7.1%). in Western Europe (+0.6%) in 2018 and a quite noticeable
Together those five countries represent 71% of the overall growth in Eastern Europe (+6.2%).
residential construction market in Europe in 2018. The other
European countries hold a share of maximum 4.5%. So far European households are enjoying better access
to credit and in some countries, they benefit from state
New residential construction has the strongest growth rate support in the form of various programmes to encourage
in 2018 with 5.5% (see Figure 5.1) but it is recovering from a access to housing. The recovery in house prices gives
deep recession. In Western Europe, except in Norway (-9.8%) positive signals to investments, but it also tends to overheat
the new residential construction increased in all the countries the market. Investors are becoming more active in new
with Ireland posting a significant double-digit growth (+35%, building developments.
though recovering from a deep recession). In Eastern Europe,
all countries continued to register the strongest growth in
2018 with Hungary showing an impressive 75% growth.
5.1.2. Non-Residential Construction

After posting the highest growth of 3.7% in 2017 since growth in euro term came from Western Europe. The new
2013, the non-residential construction segment increased sub-segment of the non-residential sector grew by 1.7%,
mildly in 2018 registering an estimated growth of 1.5%. while renovation posted just 1.4% growth in 2018. The
Western Europe posted a lower growth (+0.9%) compared new segment is in the very early stages of recovery and
to Eastern Europe (+10.2%), although 83% of European benefitted from improved economic conditions in Europe
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and the continued availability of EU funds in Eastern countries registered a growth in non-residential renovation
Europe. construction.
At a national level, except Belgium (-5.4%), Ireland (-5.9%), In a context where there is still plenty of concern about the
Norway (-2.9%), Sweden (-5.7%), the UK (-5.2%) and economy, and companies are not significantly expanding
Slovakia (-2.5%) all the countries posted a growth in new their staff and/or equipment, renovating their existing
non-residential construction in 2018, with a double-digit facilities remains a reasonable option. And from the point of
growth observed for Hungary (+17%) and Poland (+14.5%). view of property investors, the same atmosphere of caution
also hints at the idea that buying assets in newly developed
The non-residential renovation sector already rebounded in areas involves more risks than in consolidated areas, even
2014, two years before new non-residential, and is estimated if the latter are likely candidates to be renovated in order
to have grown by 1.4% in 2018. Again, for this sub-segment, to make them competitive. This explains largely a higher
Eastern Europe posted a higher growth (+6.8%) versus its growth rate registered in the renovation sub-segment over
Western counterpart (+1%). At national level, except France the new one in the non-residential construction in 2018.
(-0.5%), Ireland (-2.7%) and Slovakia (-8%), all the other
5.1.3. Civil Engineering Construction

After a contraction of 1% experienced in 2016, civil In Western Europe, the highest growth rate was registered
engineering posted a growth of 2.2% in 2017, which in Switzerland (+9.4%) Spain (+8.5%), the UK (+5%), France
accelerated to 5% in 2018. Like in 2017, the growth was (+5.6%), Ireland (+4.7%), Sweden (+4.5%) and Netherlands
again higher in Eastern Europe (+16.9%) over Western (+4.1%) with the rest of the countries posting a growth
Europe (3.9%). The new segment posted a higher growth between 0.2% and 3.4%. In Eastern Europe, Hungary (+26%)
of 5.4% compared to the 4.4% growth in the renovation and Slovakia (+14%) performed particularly well in 2018.
segment thanks to the increased investments in the private
sector and the availability of public funds. In the new sub-segment, except a minor drop in Finland
(-0.3%) and Germany (-0.5%), all the countries in Western
Thanks to the resilient nature of civil engineering renovation Europe posted a growth in activity with Belgium (13.6%)
segment, the activity increased in all the countries in 2018. and Norway (17.3%) registering a double-digit growth.
5.1.4. Country Analysis of the Construction Market in Europe

Austria growth (+2.4%) compared to the renovation (+1.8%) sub-
The construction activity in Austria slowed down from segment. From 2019 onwards, growth in non-residential
3.5% growth in 2017 to 2.3% in 2018 due to lower economic construction will likely slow down due to several factors.
growth and higher construction prices. All segments and In addition to lower economic growth, the phasing out
sub-segments developed positively but the main drivers major city development projects in the capital Vienna
of growth were housing and non-residential construction, by the end of 2018 and early 2019 (especially in office
driven by the vivid economic performance of Austria. Total construction) and market saturation in some areas (such
residential construction is estimated to have grown by as in commercial construction where the competition
2.5% in 2018 with the new sub-segment increasing by 2.7% has already reached a very high level) would be the
and renovation by 2%. For subsequent years, growth is main factors behind a lower growth in non-residential
expected to continue, however, at lower rates than before construction (1.4% annually during 2019-2021). As for civil
(+1.1% per annum during 2019-2021) due to the risk of an engineering, it is estimated to have expanded by 2.3% in
overheating market (due to increasing house prices). The 2018, with new civil engineering growing by 2.2% and civil
non-residential construction sector increased by 2.2% renovation by 1.2%, on the back of stronger investments
in 2018 in association with sustained economic activity in in rail construction works (+4.3%). Total construction
Austria. New non-residential construction showed a higher in Austria is expected to develop rather stable in the
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upcoming years from 2019 to 2021 at an average real by 10.2% thanks to high demand for new dwellings, while
growth rate of about 1.4% per annum. the renovation segment surged by 16.7%. Strong public
investments and sustained economic activity led the
Belgium non-residential construction sector to post a second
In Belgium, the total construction output increased by 2.3% consecutive year of double-digit growth in 2018 (+11.1%).
in 2018, with the major source of growth being residential The positive development is expected to continue in 2019-
and civil engineering. The residential construction sector 2021 thanks to strong public spending, especially from
is estimated to have registered a 3.3% increase with new EU funds and continued growth in private investments.
residential increasing by 6.4% and renovation by 1%. After huge negative developments in 2016-2017, civil
The further tightening of Belgian energy performance engineering is estimated to have rebounded (+6.3%) in
requirements in Flanders at the end of 2017 and the improved 2018 with the new sub-segment posting a mild growth
economic conditions (falling unemployment and rising of 1.4% and renovation growing by 8.7% reflecting the
disposable incomes in a context of very low mortgage rates) start of the EU funds programme. The Czech construction
were the primary factors explaining a solid performance of sector is expected to register a positive outlook from 2019
new housing construction in 2018. Although less strongly, onwards with all sectors contributing to the growth (+7%
these factors are expected to continue supporting demand per annum during 2019-2021). The renewal of financing
in the period 2019-2021. After a strong recovery in 2016 and a from EU funds will likely support a sustained growth in
moderate growth in 2017, the non-residential construction non-residential and civil engineering construction over the
declined in 2018 (-2.6%) driven by the contraction in new forecast period. The main downside risk to this outlook is
non-residential construction (-5.4%) and despite the growth the ability of Czech authorities to push enough shovel-
in the renovation segment (+1.6%). The contraction in new ready projects to capitalise the total of EU funds approved
non-residential construction in 2018 is largely explained by in Brussels.
the low volume of building permits issued in 2017 for certain
types of building (offices and industrial buildings). However, Denmark
from 2019 onwards the situation should start improving, Total Danish construction is estimated to have grown
which in combination with a steady growth in the renovation by 2.7% in 2018. The residential construction sector
segment, will likely help non-residential construction to increased by 3.3% thanks to a solid growth in new
renew with the growth (2.9% annually during 2019-2021). residential construction (+7%) and a relatively mild growth
Civil engineering construction experienced a significant in the renovation segment (+2%). Rising real estate prices in
growth of 10.4% in 2018, with new civil engineering surging association with increasing housing needs will likely lead to
by 13.6%, whereas renovation increased by just 1.1%. The a lower growth in new residential construction from 2019
four flagship projects (Oosterweel Link road, the extension onwards. Renovation in residential construction will likely
of the Brussels metro, expansion of the Liège tram network be promoted by a government scheme supporting energy
and to a lesser extent the RER regional express rail network) conservation, climate-related projects and broadband
should maintain the growth in civil engineering construction internet installation. Total housing construction is forecast
over the 2019-2021 period (+4.7% per annum). Even though to increase by 3% annually during 2019-2021. The non-
the total construction output in Belgium is expected to residential construction sector is estimated to have
grow by an average of 2.9% per annum over 2019-2021, increased by 2.9% in 2018. New non-residential construction
the construction market in Belgium can be identified as a grew by 3.7% driven mainly by a large governmental
mature market. programme of new hospitals and a renewed growth of
private sector construction. Renovation in non-residential
Czech Republic construction is estimated to have grown by 2% driven by
In 2018, the Czech construction sector posted an impressive incentives in energy savings linked to high energy costs.
growth of 10% driven by a continued growth in all In 2019-2021, non-residential construction is predicted to
segments (housing, non-residential and civil engineering maintain a stable growth thanks to continued economic
construction). After a mild growth in 2017, the residential growth and healthy public finance. Civil engineering is
construction sector renewed with a double-digit growth of estimated to have increased mildly by 1.1% in 2018 driven
11.6% in 2018. The new residential sub-segment increased mainly both by new (+0.7%) and renovation (+1.9%) sub-
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segments. Going forward, civil engineering construction estate market, the Finnish construction market is expected
is forecast to post a moderate growth of just 1% annually to post a mild growth in 2019 (+1.4%) before progressively
from 2019 to 2021. Total construction activity in Denmark is contracting during 2020-2021 by 1.8% annually.
predicted to post a stable growth of 2.3% annually thanks to
the building sector. France
The French total construction output is estimated to
Finland have grown by 3.2% in 2018. A strong upward trend from
In Finland, construction output is estimated to have 2016-2017 in residential construction weakened with an
increased by 2.8% in 2018, thanks to growing building increase of just 1.9%. The new and renovation sub-segments
activity. The residential construction sector is estimated to increased by 3.5% and 0.7% respectively, still highly
have continued a strong growth path in 2018 (+5.1%) driven supported by political measures for access to ownership
by the solid demand for new flats. The growth in new housing along with attractive housing loans. Despite the extension of
construction was particularly significant (+9.7%) thanks to supportive fiscal measures (the “Pinel” and PTZ loan (“Prêt
housing investors investing in new non-subsidised rental à taux zéro” – zero loan rate) for another four years and the
dwellings and increased urbanisation. For the next few dedication of these measures to tense areas (where home
years, however, the volumes of housing starts are expected prices are already high), the new housing starts are forecast
to decline sharply (-6.8% per year in 2019-2021) driven by to decrease from 2019 to 2020 before going up in 2021. The
oversupply of flats in many urban areas and declining rent expected mild growth in more resilient renovation segment
prices (especially in 2020-2021). The residential renovation will unlikely offset the future contraction in new housing
sub-segment, the largest of the Finnish construction sector, construction, which would result in residential construction
increased at a moderate rate of 1% in 2018 mainly driven by going down by 0.8% annually during 2019-2021. The
a professional renovation segment, but to a lesser extent by year 2016 witnessed the end of a 7-year long downward
consumer-driven DIY renovation. The outlook for renovation trend in non-residential construction buildings which
(+1.7% per annum in 2019-2021) is better than that for new continued to increase by another 3.9% in 2018 thanks to a
residential starts since a considerable number of flats and solid performance of the new (+9.1%) sub-segment. New
attached houses are reaching the age when renovation non-residential segment growth can be attributed to the
will be required. The non-residential construction sector improved economic visibility and steady economic growth.
increased mildly by 1.8% in 2018 after a strong growth in At the same time, output of buildings for education and
the previous year thanks to the general economic revival. healthcare improved significantly over the course of 2018.
New non-residential construction increased by 2.7% in 2018 The situation is expected to continue improving through
driven by construction of buildings for education, industry, 2021, thanks to positive macro-economic indicators in the
commerce and health-care. However, from 2019 onwards private sector and the ambitious public investment plan
new non-residential construction is forecast to contract due proposed by the French President. The overall activity in
to the declining office constructions. Renovation in non- non-residential construction is forecast to continue its
residential continued its stable growth of 0.5% in 2018. The upward trend from 2019 onwards with annual growth
need to renovate non-residential buildings increases more of 3.1%. Although from a very low level, growth in civil
steadily, especially in the public sector and is likely to grow engineering construction accelerated from 0.6% in 2017 to
even until 2030. After contracting in 2017, civil engineering 5.6% in 2018. Both the new and renovation sub-segments
construction remained stable in 2018. This could be contributed equally to this performance mainly thanks to a
explained by the strong growth in 2016 (+6.5%) thanks to further growth in public spending over the course of 2018.
the delays in the first phase of the metro project, which Civil engineering is expected to accelerate, since private
increased investments in 2016 considerably. At the same investment (telecom, energy, water) will keep pushing,
time, much of the funding for reducing the repair backlog and public investment will continue to recover (roads, high
was also spent that year. Going forward, the civil engineering speed train) hopefully with some support from EC initiatives.
construction volumes are likely to drop due to increasing Total construction output in France is forecast to increase
development and input costs as well as the decrease in mildly by 1.3% annually during 2019-2021 thanks to civil
state funding resulting from the growing government debt. engineering and non-residential constructions offsetting
In the light of the sluggish economy and a saturated real the lower output in the residential segment.
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Germany forecast to remain stable in 2019 (+0.1%) mostly because of

The German construction output is estimated to have grown a continued demand in the new housing segment. However,
mildly by 1.3% in 2018 boosted mainly by new housing. The as soon as the first symptoms of fatigue appear in 2020-
residential construction sector increased by 1.6% with all 2021, the whole German construction sector is forecast to
of the impetus coming from the new construction segment contract slightly (-0.7%) with not a single segment expected
(+6%), while renovation registered a mild contraction to grow during this period. The stagnation in the building
(-0.5%). Higher refugee immigration, as well as pull-forward renovation segment, representing about 55% of the German
effects in single and two-family house construction due construction market, can pose a problem in the future.
to tougher energy regulations as of the beginning of 2016,
are giving a temporary boost to residential construction. Hungary
Main constraining factors include the limited supply of After a disastrous 2016 due to the slump in non-residential
construction areas and the sharp increase in construction construction and civil engineering sectors, the construction
and development costs exacerbated by tougher energy output in Hungary continued its double-digit growth in
regulations. Concerning renovation construction in 2018 (+24.7%). All sectors of the construction industry
residential, renovation measures have been at an equally contributed to last year’s performance. Thanks to
exorbitantly high level for a decade, significantly reducing the state support (tax relief, easier grants for young families)
need for refurbishment in the years ahead. Also, a number to turn the negative demographic trends, the residential
of constraints (such as often little additional potential for construction sector saw an impressive growth (+48%) in
energy savings, unclear usage horizons, buildings with 2018. The lion share of this growth came from the new
complex ownership structures, complex state funding residential sub-sector, which increased by 75%. Renovation
combined with ambitious target) point to a cool-down in the in residential construction grew more moderately by 5%
renovation market. Still, renovation in residential housing as the government’s housing policy prioritises young
is predicted to remain by far the largest sub-segment by couples’ home purchase. Additional growth in the 2019
volume in the German construction industry. Although the period should be the result of the current permit numbers
non-residential construction sector increased by 0.9% and the number of announcements of intention to build
with new increasing by 1.5% and renovation by 0.5%, the a home within the simplified permit procedure. However,
segment is suffering from companies’ cautious approach uncertainty surrounding the extension of the favourable VAT
to investment. There are nevertheless currently several scheme will likely reduce the housing starts (-20%) in 2020
indicators that companies will start reducing their funding with an expected stabilisation in 2021. In the renovation
on maintaining their buildings and/or on new construction sub-segment, the acceleration of growth is likely to be
in 2019-2021. At the same time, the lack of building lands will driven by a booming real estate market in 2019-2020 where
dampen any hopes for renewed growth in non-residential the growth will average 9% per annum before the market is
construction in Germany over the forecast period. In the expected to contract by 5% in 2021. The non-residential
renovation segment, given the size it has already achieved, construction sector increased by 13.6% in 2018 thanks to
it appears that little further expansion can be foreseen in various factors (solid economic fundamentals, on-going
near future. Civil engineering increased mildly by 0.7% absorption of EU funds, low interest rate and Hungary’s
in 2018 mainly driven by the renovation segment (+2%), upgrade by international rating credit agencies). Both new
which offset a minor contraction in new civil engineering and renovation segments performed particularly well where
construction (-0.5%). Civil engineering is mainly benefiting the output increased by respectively 16.9% and 10%. The
from far higher federal government funding for roads and combination of state support with EU transfers to support
railways and increased contribution to the expenditure SME’s investment, the increased state expenditure for
on refugees realised by “Länder” and municipalities. For public projects in culture, entertainment and sports, the
instance in the transport sector, the federal government non-residential construction (both new and renovation)
launched an investment offensive in 2015-2016 and the output is likely to post a steady growth of around 7.4%
level of funding reached in 2018-2019 will then be kept at the annually between 2019 and 2021. Following a huge drop in
same level going forward. This will likely affect the output in 2016, the civil engineering sector continued with a strong
civil engineering construction in 2019-2021, which will likely growth (+24.3%) in 2018 both in the new and renovation
drop by 0.6% per year. The German construction output is sub-segments thanks to the continued availability of
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EU funds. Four mega infrastructure projects called Paks Italy

II dominate the period between 2018-2022, which will Following an upturn in 2015, the Italian construction sector
provide a steady growth in both new and renovation civil experienced a continued growth in 2018 (+1.7%) thanks
engineering construction. The output growth in this sector to the performance of all sub-segments. The residential
is expected to average 10% per year. Due to bottlenecks construction sector increased by 1.3% with the new sub-
(higher development costs, labour shortages, emigration segment moving up by 3.4% while renovation increased
of expertise) created in association with the quick rebound by just 0.8%. New housing market is characterised by a
in construction demand, it will probably be challenging for poor demographic evolution, high real estate prices and a
Hungary to meet the abrupt growth in current construction relatively high level of unsold stock of houses. In the years
demand. This means that the growth in construction output to come, a moderate growth is forecast to be the main
will likely decrease significantly from 10.2% in 2019 to just characteristic of the market. With cumulative growth of
1.7% in 2020 before it accelerates to 5.6% in 2021. Despite 4.3% during 2019-2021 period, the residential construction
an expected growth in other sub-segments, a sharp drop in output will still be 25% below the peak reached in 2006
housing starts will particularly affect the whole construction by the end of 2021. The non-residential sector increased
industry in 2020. by 2.3% with new increasing by 3.6% and renovation by
1.6% in 2018. The recovery in non-residential construction
Ireland started in 2015 and is driven by the industrial, office and
The Irish construction sector commenced a strong recovery agricultural segments as well as the public sub-segments.
in 2013, albeit from an exceptionally low base, and is The demand for construction in these economic sectors will
estimated to have registered a further growth of 6.1% in likely register a stable growth of 2.2% per year in the 2019-
2018. The residential construction sector increased by 2021 period backed up by the continued economic growth
19.3% with new being the most expanding segment with and elevated business confidence indicators. After two
35.1% growth while renovation increased by just 3%. The consecutive years of decline (-2.7% annually during 2016-
level of housing supply in Ireland is substantially below 2017), civil engineering construction resumed its growth in
where it needs to be. Thanks to continued state support for 2018 (+2%) thanks to the recovery of investment by Central
the housing market, Irish residential construction is forecast Government and by some of the biggest national and local
to grow at double-digit rates in 2019-2021, albeit at a slower companies. From 2019 investment by Local Bodies is also
pace compared to performance in 2018 (+11.7%). After a expected to recover thanks to the availability of public funds
strong performance of 15.6% in 2017, the non-residential allocated to the sector in the three-year period as well as
construction sector declined by 5.5% in 2018 driven by that from road managing companies. These investments
the oversupply in the commercial (office), industrial and will likely help civil engineering construction to increase
agricultural building construction. It is very likely that it will by 3% annually during 2019-2021. The Italian market is
take many years for the demand side of the non-residential still wrapped up by the stabilising effects of a prominent
sector to absorb the high level of construction in 2015- renovation market, representing a share of 60% of the
2017. Therefore, non-residential construction is expected total construction market. Although the fiscal incentives
to contract further in 2019-2021 by 11.6 annually. The civil for different renovation and energy saving projects are
engineering sector is estimated to have rebounded in 2018 expected to slow down in the building sector, the stable
on the back of growth in the new (+5.2%) and renovation growth rate of renovation output in both residential and
(+4.7%) sub-segments. There is a commitment in the non-residential constructions should support a sustained
“Programme for Government” to leverage additional private growth rate of the Italian construction industry in 2019-2021
investment in sectors struggling with large infrastructure period. This, in combination with continued expansion in
deficits, including residential care, housing, regional new civil engineering construction, is expected to lead to an
transport and third level education. The overall volume of annual average growth of 2% per year over the same period.
construction output is forecast to grow at a declining rate
from 2019 onwards. The Irish construction industry is in a Netherlands
recovery phase and is on course to experience a positive Following an upturn in 2014 and strong growth in 2015-
outlook, provided Brexit does not adversely impact this 2017, the construction sector in the Netherlands continued
encouraging trajectory. its growth path in 2018 with an estimated rate of 6.3%. The
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residential construction sector growth slowed in 2018 housing prices since May 2017, a lack of production
but remained vigorous (+6%) with new increasing by 9% capacity (meaning that developers will find it difficult to
and renovation by 3.8%. The development of residential attract construction firms to their projects), as well as a
construction is boosted by high consumer confidence, low lower population growth were the main factors explaining
interest rates and the increasing need for housing in light lower output in new housing in 2018. The negative effects
of a demographic growth. A steady increase in output is of these factors will likely continue in 2019, which means
expected in the years further ahead (3.3% per year during that new housing construction is forecast to increase mildly
2019-2021). The non-residential construction sector again from 2020. The anticipated real wage growth along
increased by 6.4% in 2018 thanks to continued economic with a high level of housing stocks are forecast to provide
growth. New construction in 2018 expanded by 8.9% a steady growth (+1.8% per year) to the renovation and
boosted by the improvement of the economic situation and maintenance activities in the future. After growing by 3.7%
favourable export opportunities ensuring a steady demand in 2017, the non-residential construction sector posted
for industrial, and storage buildings. This is accompanied a mild drop in 2018 (-0.5%) due to the situation in new
also by a significant recovery of sectors relying on public sub-segment, which contracted by 2.9% offsetting growth
infrastructure (like for education and hospitals). The (+1.5%) in the renovation area. Higher demolishing rates for
Renovation & Maintenance segment is estimated to existing offices and commercial buildings, transformation of
have grown by 3.9% in 2018 thanks to the catching up on existing non-residential buildings to dwellings led to lower
postponed maintenance work and focused efforts to make output in new non-residential construction. Regarding the
existing buildings more efficient. Favourable economic renovation sub-segment, lower employment growth, in
conditions should boost the non-residential construction combination with companies being more cautious with
output in 2019-2021, which is forecast to grow by 4% non-essential expenditures lead to a modest growth.
annually. Civil engineering is gradually recovering from Going forward, most of the growth in the non-residential
the economic crisis and austerity measures in the past and construction market (2.2% per annum during 2019-2021)
registered a solid growth of 6.8% in 2018 with contribution is expected to come from increased public sector spending
of both new (+8.2%) and renovation (+4.1%) sub-segments. on health and education. Civil engineering output surged
Main drivers are economic growth, some large projects and by 13.4% with the new sub-segment expanding the most by
the increasing need for work to accompany new residential 17.3% and renovation by 3.4%. This market has experienced
construction. The devoted public budget by the Dutch strong growth since 2010 and there are no signs of weaker
government to beat the mobility problem should accelerate growth. In general, new investments are growing faster
growth in civil engineering, mainly in new construction and than maintenance. The Norwegian construction output is
renovation of roads and railways. The forecast reveals robust expected to continue growing by 3.9% per annum for 2019-
expectations of around 3.2% growth per annum for 2019- 2021. With new residential construction declining from
2021, which will also be driven by the continued investment high levels, growth comes from civil engineering (roads
by local government after several years of budget constraint. and energy) and building renovation segments. Opposite
The balanced growth in the building area and the extra to most European countries, in Norway public demand for
budget impetus from the Dutch government supporting construction is stronger than private demand.
higher growth in civil engineering will help the construction
industry to grow by 3.5% between 2019 and 2021. Poland
Following a slump in 2016, the rebound in the construction
Norway output in Poland continued in 2018 (12.9%) on the back of
The Norwegian construction sector has barely experienced a recovery of investments co-financed with EU funds. The
any significant recession, and yet still has some more residential construction sector increased by 10.2% with
room for growth. After a robust increase of 6.6% in 2017, the new sub-segment increasing by 12.4% and renovation
the construction sector in Norway is estimated to have by 3.5%. Like in previous years, the main driver of growth
grown by just 1% in 2018 due to the contraction of output in housing which are the investments in the construction
in new buildings. The residential construction sector of flats carried out mainly by developers remained in 2018.
contracted by 5% with the new sub-segment plunging by A simultaneous increase was observed in both dwellings
9.8% while renovation increased by just 1.8%. Decreasing completed and number of permits issued. In a context
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of stabilisation of flats prices, housing demand has been non-residential construction sector increased by 5.6% in
fuelled by the growing affordability of mortgages and 2018 in line with the recovery of the Portuguese economic
lower interest rates, supported by improving labour market situation and the increase observed in the economic
conditions and the extended government-subsidised agent’s confidence level. Both new non-residential building
housing programme “Flat for the Young”. Some slow-down construction and renovation contributed to this upturn with
is expected from 2019 onwards in connection with the a growth of 5.4% and 6% respectively. In the renovation and
fading out of “Flat for the Young” and the implementation of maintenance works segment the continued several years of
the “Flat Plus” programme easing access to ownership and growth is driven by the private investment, largely of foreign
rental to medium and low incomes. The non-residential origin, attracted to Portugal by the availability of liquidity
construction sector accelerated its growth from 6.2% in financial markets and low interest rates combined with
in 2017 to 10.5% in 2018 with a positive contribution of an undervaluation of real estate assets. From 2019 to 2021,
both new (14.5%) and renovation (4.1%) subsegments. the non-residential building segment is expected to register
Continued availability of EU funds and increased positive but declining growth rates from 4.3% in 2019 to
investment expenditure by local governments were the 2.8% in 2021. After contracting sharply in 2016 (-12.6%), civil
main factors explaining the strong growth in non-residential engineering construction continued its growth in 2018
construction. At the same time, continued improvement (+2.5%) driven by a stable recovery in public investment.
in the economy helped the private sector to increase their As by far the largest the sub-segment, new civil engineering
investments. From 2019 onwards, an increasing absorption construction contributed the most to this performance
of EU funds under the financial framework for 2014-2020 is thanks to 2.6% growth, which compares to 2.2% growth in
expected to provide impetus to the sector both for public the renovation sub-segment. Civil engineering is expected
and private constructions going forward. Civil engineering to continue a growth path thanks to the Structural Funds
increased by 19% with new surging (+27%) and renovation Programme “Portugal 2020” as well as healthy economic
continuing a stable growth of 4.6%. In 2019, many delayed prospects. Nevertheless, the case of Portugal has some
construction investments, related to the use of funds from similarities with Spain. It is also a market that has suffered
the EU financial framework 2014-2020, are expected to from a long and deep recession that the high forecast figures
start. This will likely support the growth in civil engineering (6.4% per annum for 2019-2021) are giving a false perception
construction at a double-digit rate. Total construction of recovery since it starts from very low levels. Like in Spain,
output is expected to rise again by another 10.1% in 2019 there are plenty of uncertainties in the non-residential
and slow down in 2020 (+4.7%) and 2021 (+5.4%). The segment, but some hope in new housing remains stirred by
biggest threat in the Polish construction sector may be property investors.
the further increase in labour costs and prices of building
materials, which reduce the growth in construction output. Slovakia
After a sharp recession in 2016 the Slovakia construction
Portugal sector renewed with growth in 2017, which continued at an
In 2018, the construction sector in Portugal is estimated estimated rate of 5.9% in 2018. The main factors that led to the
to have continued to grow by a solid rate (+7.6%) thanks 2016 recession were removed in 2017 such as the disruption
to the availability of public investment. The residential in the EU funds causing a huge drop in civil engineering and
construction sector is estimated to increase again at a new non-residential construction projects. The increasing
double-digit rate in 2018 (11.8%) after healthy growth in demand for housing and building permits helped the
2017 (+15.2%), with the renovation sub-segment being residential construction sector grow by 12.5% in 2018. The
the most dynamic segment of the construction sector new residential sub-segment accelerated its growth from
registering an increase of 15%. Still, the new construction 8.3% in 2017 to 15.7% in 2018 thanks to the demand for
segment also progressed well with a 5.4% increase. For housing, affordable mortgage lending and the purchase of
the near future, forecasts for the evolution of the housing apartments as investment. However, this growth is unlikely
market are positive, in a framework of economic recovery. to sustain due to the negative demographic evolution,
New housing construction is expected to perform positively limited land availability and tighter credit regulations.
until 2021, but the renovation and maintenance works After contracting by 3.4% in 2017, the renovation segment
segment is still expected to register a higher dynamism. The rebounded with a growth of 7.3% in 2018 thanks to the
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Slovak State support for thermal insulation of houses and steady growth of 2.5% in 2018 as a result of both large and
apartment buildings as well as construction of municipal small-scale renovations. The non-residential construction
housing. This programme, which is replaced by a tax bonus sector encounters more difficulties recovering than housing
in 2019 will still maintain a stable output in renovation and and is estimated to have increased by 3.2% in 2018 and both
maintenance construction before it starts contracting again new and renovation sub-segments registered a positive
through 2021 (-1%). The non-residential construction development during three consecutive year with new
sector, being the largest segment of the Slovak construction increasing by 4% and renovation by 2%. Non-residential
market, contracted in 2018 (-4.3%) after growing mildly the real estate activity continues to be intense, and there are
previous year (+0.9%) due to the decrease in the use of non- few signs of fatigue so far. But as demand was boosted by
residential buildings under construction permits. In 2019, speculating investment funds it cannot be interpreted as
the non-residential construction is expected to increase by a clear upturn in the development of new construction.
1.2% thanks to the public investment. However, this growth After two consecutive years of drop, the civil engineering
will likely fade away by the end of 2021 due to a declining construction finally rebounded by 4.6% in 2018 thanks to
investment from the private sector. While civil engineering growth in both the new (+2.5%) and renovation (+8.5%) sub-
was the driving force of the construction sector in 2015, segments. The local works that are making an appearance
the sector is estimated to have registered a drop of 25% in the run up to 2019 municipal elections favoured mostly
in 2016. 2017 was characterised by the return of public the renovation segment, while some cost curbing measures
investment and EU funds, which led to the growth of 8%, have reduced the number of new projects and slowed
which accelerated to 14% in 2018. The new sub-segment progress on works already underway. With no contribution
posted a growth of 14.1% in 2018 though with a declining from infrastructure construction, renovation production is
growth outlook in 2019-2021 (+2.1% per year). All of the expected to contract by 2% in 2019, but then grow again in
growth in the civil engineering construction is likely to come 2020-2021 (+4% per year) essentially driven by local works
from the new sub-segment going forward mainly thanks to from municipalities. For 2020-2021, Euroconstruct expects a
the infrastructure projects backed up by both the Slovakian steady growth in new civil engineering (after the elections),
government and EU funds. A continued recovery is expected while the strength in the development of stated developed
in 2019, with 3.7% growth in the total construction industry projects, especially railways manifest themselves once
in Slovakia thanks to the continued availability of funds for again. Total construction growth is forecast to average 2.8%
civil engineering and still growing housing market. However, per annum during 2019-2021 thanks to steady growth in the
uncertainty lies for the year 2020-2021 for which a stable building sectors and civil engineering. However, this will still
construction output is expected. generate very modest output compared to pre-crisis levels.
Spain Sweden
In 2018 the construction sector in Spain is estimated to Since 2014, Sweden has been experiencing substantial
have increased further by 5.7%, with segments moving growth thanks to the good performance of new building,
at very different speeds illustrating a gap between public and particularly new housing. After a robust growth of 6.6%
and private development. The recovery in residential in 2017, the Swedish construction sector is estimated to have
construction has remained steady, while civil engineering increased by just 2% in 2018 due to the contraction in the
began to benefit from the increased availability of both new non-residential sector. The residential construction
public and private funds. Non-residential construction sector increased by 2% driven essentially by activity in the
lies somewhere in between, improving moderately. new sub-segment (+3%). The increase in housing starts,
The residential construction sector is estimated to reaching levels not seen since the early 90-ties, can be
have increased by 7.9% in 2018 but to be still far from its explained by fundamentals like low interest rates, a huge
comfort zone. Construction of new buildings increased by demand, rising house prices, employment and income
11% thanks to the effects of the reappearance of owner growth. However, this growth comes from very low levels,
occupant buyers following a fall in housing prices and more although the output level was above the government’s goal
mortgages being granted. This is the third consecutive year of 70,000 new dwellings annually to 2025. New residential
after the crisis that there have been more housing starts than buildings are expected to flatten out and drop from 2019 as a
completions. The renovation sub-segment has registered a result of lower employment growth, uncertain house prices,
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rising taxes, shortages of labour and higher interest rates. room for investments into production facilities and new
The renovation sub-segment is expected to post a steady offices. Also, the health and educational sector will likely
growth of just under 1% per year from 2019 onwards. The support the non-residential construction on the back of
non-residential construction sector contracted by 1.4% in aging population and outdated infrastructure. Therefore,
2018. The new non-residential building activity dropped by the non-residential construction in Switzerland is predicted
5.7% due to the office and educational buildings segments. to post a stable output growth in 2019-2021, which will
The renovation sub-segment did much better with a growth average 2.7% per year. After two consecutive years of
of 2.8%. Based on building permits, project lists and the contraction, civil engineering construction rebounded in
expected slow-down in economic growth in general, the 2018 (+8.1%) with both new and renovation sub-segments
activity in new non-residential construction is forecast contributing to this growth. The civil engineering segment is
to decline further from 2019 onwards. Non-residential expected to continue benefitting from two new infrastructure
renovation will likely remain the most stable sector of the funds in the next few years: the railway infrastructure fund
Swedish construction industry with a growth projected at implemented on 1st January 2016 and the national road
1.2% per annum in 2019-2021. Historically low interest rates, and agglomeration transport fund from 2018 onwards. The
decreased vacancies and rising rents have made it a good renovation segment will particularly benefit from higher
opportunity to initiate renovation projects. The property a share of investments over the next three years. Despite
market is expected to cool down in the coming years positive fundamentals and high investments into hospitals
making investors increasingly selective. Civil engineering and infrastructure projects, the construction sector growth
increased by 6.2% in 2018 with new and renovation should decelerate from 2019 onwards (0.7% annually during
increasing by 7.2% and 4.5% respectively. Transport 2019-2021) due to contracting residential construction. This
infrastructure is taking a leap upwards as a consequence of more sedate growth rate and high production levels in the
the transport infrastructure plan from 2014. Many new and Swiss construction market indicate a situation of saturation.
large projects are reaching a more intensive phase. However,
the extensive need for renovation and maintenance will United Kingdom
continue to enforce priorities. The Swedish construction After a healthy growth in 2017 (+7%), the British construction
industry will likely be featured by contrasting trends in its sector is estimated to have contracted by 0.8% in 2018
sub-segments in 2019-2021. With the residential market driven by performance of residential renovation and
expected to contract from 2019, civil engineering keeping new non-residential sub segments. The residential
growing at moderate speeds, and a declining output in the construction sector increased by just 0.8% thanks to the
building sector driven by new sub-segment will lead the new residential sub-segment increasing by 2.6% as a result
construction sector contracting in 2019 (-3.8%), stabilising of positive developments of both private and public housing
in 2020 and contracting again in 2021 (-2.4%). construction. The forecast for private housing has remained
relatively buoyant as the underlying market dynamics of
Switzerland high latent demand and lack of supply have not changed.
In 2018 the Swiss construction output is estimated to have The prospects of the public house building market have
increased by 2.5%. The residential construction sector also improved with a goal of the UK government to build
revived in 2017 registering growth of 3.6%, but slowed down 250,000-270,0000 new homes a year. With a drop of 1.6%
significantly to 0.3% in 2018 due to rising interest rates, in 2018, the renovation activity was impacted negatively by
sluggish demand for housing and an increasing number pressures on disposable incomes and a modest pick-up in
of vacant flats. These factors are forecast to have a further unemployment. On the other hand, on the public side there
negative effect on the housing market, which means that it can be an increase in activity going forward linked to the
will likely contract by 2.4% per year during 2019-2021. The remedial work on high-rise apartment blocks. Despite the
non-residential construction sector increased by 2.2% with UK referendum vote to leave the EU, the non-residential
new increasing by 2.1% and renovation by 2.2%. Big projects construction sector experienced a growth of 4.9% annually
such as the “Circle” at the airport in Zurich or investments of during 2016-2017. However, the uncertainty about the Brexit
biotechnology and pharmaceutical companies support the process led to a contraction in non-residential construction
non-residential construction sector. At the same time, the in 2018 (-3.7%) with the new sub-segment declining by
better economic situation for manufacturing firms leaves 5.2% and renovation output remaining stable (+0.2%). The
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© Shutterstock
outlook becomes uncertain due to developments on the by 4.2% in 2016, civil engineering continued to recover
economic front and post Brexit effects. The most vulnerable with a 2.3% growth in 2018 driven more by renovation works
sectors are the industrial, offices and commercial ones, with (+5%) rather than the new sub-segment (+1%). While no
their heavy reliance on business investment. The outlook for change is expected in projects launched, in the future, the
construction in education is rather dull and depends heavily government may even boost capital spending to mitigate
on subsidies despite a number of projects in the pipeline. the impact of the referendum vote. Going forward, the road,
Office construction is especially vulnerable to post Brexit rail and energy sectors will likely create new works, which
uncertainties thus some decline is forecast in 2019-2020. will ensure a growth of 4.1% per year in civil engineering
The only sector to show a positive outlook over the forecast construction during 2019 and 2021. There is little doubt
period is the commercial one (retail, leisure), especially in that the vote in favour of leaving the European Union will
2020 and 2021. The capital’s office development cycle had have a significant impact on the UK’s economic and political
probably already peaked; thus the referendum result is likely landscape in the ensuing years.
to sharpen the downturn. The expected contraction in new
non-residential construction will likely be in contrast with a The resilience of the housing market and the state support
good performance of the renovation market (+1.4%) over for large infrastructure projects will likely compensate for
the period of 2019-2021. Indeed, a substantial number of an expected contraction in the hesitant non-residential
buildings stocks of more than 40 years old in the education segment, which will allow the UK construction industry to
sector will require renovation and maintenance, which register growth rates of 1.3% in 2019 and 2.7% in 2020 and
explains the outlook for the R&M segment. After contracting 1.1% in 2021.
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Special Focus:
Erasmus + Sector Skills
Alliances
“Skills for Baltic Wood industry - European Quality
in Vocational Education and Training” / Skilled-Up
The further advancing technical, digital and productivity Latvian Association of Wood Processing Entrepreneurs
developments in the wood sector have made an impact and Export (LKUEA), the Association of Wood Producers
on the Baltic States, Latvia, Estonia and Lithuania as well. and Exporters of West Lithuania (AWPEWL), Furniture
There is urgent need to stimulate cooperation between Cluster of South-East Estonia, Institute Rosenheim eV
employers and educational institutions providing first (LHK), Latvia University of Life Sciences and Technologies
level higher professional education (EQF Level 5) – in (LLU), the Kauno Kolegija (KK), Center of Competence for
order to prepare skilled work force (that companies Wood Processing and Furniture Manufacturing (unit of
already have stated as lacking) in the short and mid- Voru County Vocational Training Center) and AS “Latvijas
term perspective. Hence, the German-Baltic Chamber Finieris” - has initiated the project “Skills for Baltic Wood
of Commerce in Estonia, Latvia, Lithuania (AHK) as the industry - European Quality in Vocational Education and
project leader, together with 8 partners – namely the Training” within the Erasmus+ Sector Skills Alliances. To
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maximize possible positive impact of the project, project

partners have decided to focus on wood processing
sector as it is one of the highly important sectors in
national economies for all three Baltic states. Project
partners have identified that one of the most experienced
countries in developing and organizing a dual education
system is Germany, therefore it was decided to form
partnership from institutions and stakeholders in Baltic
states and Germany.
The project aims at the following goals:

• To strengthen cooperation between VET institutions
and industry;
• To improve the quality of VET providers through the
development and implementation of a Work-Based
Learning (WBL) program with an internationally
© Shutterstock
recognized qualification at EQF level 5, in line with EU
quality tools (EQF, ECVET, EQAVET);
• To promote economic development and innovation in
the wood sector by training and upskilling specialists descriptions and contents for the curriculum. The three
to meet the needs of the labor market; main fields that the curriculum will cover are Technology,
• To promote the understanding that digital Organization Processes and HR/Leadership. Within these
technologies, mobility and sustainable production are three fields, the following main modules (tentative) will
the drivers of change. be developed: Industrial Technology and Industrial
Design, Planning, control & communication systems,
The project “Skilled-Up” should bring about long- Operational Costs, Business Management, Workplace,
term changes and have positive effects on education Environment & Health Protection, People Management,
systems in the Baltic States. The transferability of the Communication Methods & Channels and Leadership
implemented approaches will provide tools for adopting & (Personal) Development. During the process of the
results in other countries and sectors. development, the project partners will also ask for
feedback by international sector experts, apart from the
The project partners have already held two meetings so ones from the Baltic states. The modular curriculum will
far: from 15 to 16 January 2019 to the kick-off meeting be published on the website www.skilled-up.eu once
in the German city of Rosenheim, as well as a follow-up developed and openly accessible to be adapted by other
meeting on 22 February in Riga, Latvia. countries.
During the meetings, representatives of all 9 partners If you have questions about the project or would like to
got to know each other and discussed first steps, get involved as a reviewing external expert, feel free to
administrative topics, concrete content and structure contact us under: [email protected].
for the development of the training program. Over the
next few months, local expert groups from the respective EOS expresses gratitude to Mr Tschoep for his precious
project partner countries will meet to develop the module contribution to this Annual Report.
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6. EOS Advocacy Actions

As per tradition, last December 2018 the EOS Secretariat forests, can play a key role in decarbonising the economy
prepared a season’s greetings letter to be sent to the - due to the low carbon footprint compared to other
European Commission, the Members of the Parliament and materials and the CO2 stored in it - while enhancing a
Member States emphasising the role of wood products in circular bio-economy.
tackling climate change. • Creating markets - within and outside Europe - for
The key messages of the letter are here summarised: traditional and innovative new wood products supports
• Need to engage in an environmentally friendly European sustainable forestry, helps to counteract green house gas
economic growth. emissions, and puts the timber industry in the forefront of
• Products entering in the European market should comply carbon free Europe.
with the high environmental and social standards which • Enhancing the competitiveness of the European sawmill
characterize the European Union. Industry and using more sustainable wood products
• Wood products, legally sourced from sustainable managed contributes to a sustainable growth.
Bruxelles, 19 December 2018
2019: TIME TO ACT

Christmas is a time for celebration and commitments, but also to look forward to
the New Year with new ambitions and expectations.
On this occasion the European Organisation of the Sawmill Industry invites the
European Commission, the Members of the Parliament and Member States to engage
in an environmentally friendly European economic growth.
To achieve this, it is important that European policies balance environmental, social and
economic aspects.
At the same time, it is imperative that products entering in the European market comply
with the high environmental and social standards which characterize the European Union.
Wood products, legally sourced from sustainable managed forests, can play a key role in
decarbonising the economy - due to their lower carbon footprint compared to other
materials and the CO2 stored in them - while boosting the circular bio-economy. Forests are
a major store of carbon and, when properly managed, significantly contribute to reducing
carbon dioxide in the atmosphere.
Wood naturally stores and locks away carbon. Recycling is an important way to prolong the
life of wood products and to keep the carbon stored in wood for longer. The longer a wood
product is used, the longer the carbon remains in the product.
Emerging engineered wood technologies, and other wood products, can be used in industrial and
residential building projects such as high-rise construction. A 3-5 story building, made from wood, has the
same emission reduction as taking up to 550 cars off the road for one year!
Wood-based solutions in buildings have also been demonstrated to improve energy efficiency, thereby
reducing energy consumption for heating and cooling.
Creating markets - within and outside Europe - for traditional and innovative new wood products supports
sustainable forestry, helps to counteract greenhouse gas emissions, and puts the timber industry at the
forefront of carbon free Europe.
Transitioning to a low-carbon economy presents both significant opportunities and challenges. The
European sawmill Industry has the potential to strengthen economic growth while - through the use of
wood products - tackling climate change. Enhancing the competitiveness of the European sawmill Industry
and using more sustainable wood products contributes to a sustainable growth.
ACT NOW, CHOOSE WOOD!

Season's Greetings
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6.1 The Club du Bois meeting on 17th October 2018

The European Panel Federation (EPF), the European
Organisation of the Sawmill Industry (EOS) and the
6.1 The Club du Bois meeting on 10 January 2018
European Confederation of Woodworking Industries (CEI-
Bois), organised the 7th Club du Bois meeting under the

chairwomanship of Mrs Maria Noichl, MEP, on 17th October
“We are living in a place, Europe, that the large majority of the world population envies” with these
at the European Parliament in Brussels.
words, aimed at emphasising the key role of Europe in providing welfare, the Chairwoman
Honourable Member of the European Parliament Mrs Maria Noichl opened this new edition of the
This edition focussed on “The European woodworking industry and its threats & opportunities”.
Club du Bois meeting wishing to all participants a positive 2018. She welcomed the woodworking
industry family to this event and she warmly thanked the Members of the EU Parliament present to
this meeting: Mr Eric Andrieu, Mr Paul Brannen, Mr José Inácio Faria, Mrs Marijana Petir, Mr Paul
Rübig, Mr Tom Vandenkendelaere, Mr Ricardo Serrão Santos and Mr Carlos Zorrinho.
The Club Du Bois is an event jointly organised by the three Brussels based organisations: CEI-Bois,
EPF and EOS representing the interests of the European Woodworking Industry. Since 2014, Mrs
Noichl, Honourable Member of the EU Parliament, is the Chairwoman of this dedicated Club.
The main focus of the meeting was the contribution of the woodworking chain to the European
Communication "Investing in a smart, innovative and sustainable Industry - A renewed EU Industrial
Policy Strategy".
The European wood Industries are very innovation-minded: through technical innovations, the
sector is now undeniably in a position to supply high-quality products all over the world providing
market oriented solutions and new systems to ensure the highest level of traceability of timber.
Establishing a Wood Industry 4.0 requires companies to rethink the way they do business and a long-
term effort is needed to successfully navigate the changing industrial environment of Industry 4.0.
Honourable Member of the European Parliament Paul Rübig (EPP) emphasized the importance of
Opening by Mr Paul Brannen, MEP
research and innovation: if the woodworking industries aspire to be competitive in an increasingly
challenging economic arena they need to devote enough resources to research and innovation. To
Paul Brannen MEP opened the event highlighting that the
this end, he called for all stakeholders to seize the opportunities provided by Horizon 2020 (FP8)
and focus of theprogramme
by the Bioeconomy which
Strategy will
fromsucceed
2012 seemedthe to
FP8, the new framework programme funding
be novel uses of biomaterials, in particular further down
research, technological development, and innovation (FP9, starting from 2021).
the value chain. The updated EU Bioeconomy Strategy
from earlier this month recognises the role biomaterials,
For further information & date of the next meeting, please visit www.clubdubois.eu.
namely wood used in construction, play in the EU priorities,
Brief report on the presentations:
one of them being building a carbon neutral future in line
with the climate objectives of the Paris Agreement. He
Innovative product
also underlined that approach - Mr
this recognition Bert aVandenkendelaere,
is likely result of the Sales & Marketing Director Unilin,
Division Panels, Belgium
successful lobbying and liaising with the Commission and
he thanked the Commission. While we always used to build
Mr inVandenkendelaere,
wood, engineered timber Sales
now & Marketing
allows us to buildDirector
at height at one of
EPF’s
andindustrial members
at scale, some here
of the best in Belgium,
examples of which Unilin,
we haveprovided a
presentation on the innovation in the Company.
in Europe, including the largest structure built in wood, in
Hackney in London.
As he stated, the wood based panels Industry needs innovation:
128 a large part of what is sold is a commodity product, in this sense
Driving the global bio-economy: market trends and

perspectives of the European wood construction
sector – Mrs Margherita Miceli, Policy Advisor, CEI-Bois
The presentation of Mrs Miceli (CEI-Bois) offered some

insights on the statistics of the woodworking sector as an
important contributor to the European Bioeconomy.
She started the presentation quoting the newly released
EU Bioeconomy Strategy (11.11.2018), which stresses the
importance of sustainability and circularity – two core
features of the woodworking industries – as key drivers for
EU economic development.
Mrs Miceli also highlighted how the Strategy recognises
the contribution of the woodworking industry to the fight
against global climate change thanks to its greenhouse gas
(GHG) emissions saving potential, with an average of 2.1
tons of CO2 saved per ton of wood used in construction as a
replacement for concrete.
Looking at the economic contribution, the woodworking and furniture sector are together the third largest sector of the
Bioeconomy in terms of employment and the fifth for turnover.
Construction market EU28
After presenting some statistics, including the positive outlook of the European construction sector, Mrs Miceli concluded
her presentation showing how Europe is already leading the way of sustainable construction with examples of existing and
planned high-rise timber building projects and expressing the wish that the Bioeconomy Strategy will further accelerate this
transition.
129
Source: Confederation of Timber Industries, UK
The European Sawmill Industry: global market

developments and trends – Mr Diego Benedetti, Economic
and Policy Advisor, EOS
Diego Benedetti, Economic and Policy Advisor of the

European Organization of the Sawmill Industry (EOS), gave
a presentation on the sawnwood’s market outlook titled:
The European Sawmill Industry: global market developments
and trends. A short macroeconomic overview set the scene:
Mr Benedetti explained that GDP in the EU is set to grow
by 2% both this year and probably in 2019, too. However,
many potential downside risks are accumulating, including
– but not limited to – a fully-fledged trade war between the
US and China, a hard Brexit, a steep rise in oil prices, and
last but not least, a hard landing of the Chinese economy –
however, over the last few years many observers predicted
a crisis in China. While this never materialised, there are there is a strong correlation between construction activity
presently many imbalances in the Chinese economy. growth and sawn softwood production growth) and lively
overseas exports. Deliveries to overseas countries have
Mr Benedetti then proceeded to analyse the sawnwood been growing over the last few years: the largest markets
markets. EOS represents both softwood and hardwood for European producers are Egypt, China, Japan, and the
producers, but he emphasised that the two sectors have United States. Mr Benedetti opined that in the medium-
different dynamics. Overall the sector’s production and and long-term overseas markets will be playing a more
exports rose by 2% in 2017 and even this year are expected and more important role for many European mills. Also, he
to grow. The softwood sector is doing well thanks to active argued that the UK is a very large importer of sawnwood so
construction markets in Europe (Mr Benedetti showed that he called for a Brexit outcome that keeps trade unhindered.
130
In the medium-long term Mr Benedetti argued that the market has a huge untapped potential: per capita sawn softwood
consumption in Europe is five times as high as in China and immensely higher than in India.
The sawn hardwood sector (despite a relatively strong Mr Benedetti wrapped up by summarising the main messages
demand) is stagnating due mainly to ongoing raw material in his presentation and by urging stakeholders to focus on
leakage to Asia, in particular to China. Mr Benedetti showed raw material availability: to secure the long-term vitality of the
the steep increase of oak roundwood exports to China over sawmill industry (and of the whole woodworking industry) a
the last few years (+240% in the period 2010-2017), which stable and secure supply of raw materials is fundamental. This
affects mainly France and Belgium. Mr Benedetti urged all summer was characterised by widespread heat across Europe,
stakeholders to consider that it is important for the European which, combined with a stormy early Autumn, damaged
economy to add value in Europe to its raw materials. Mr the quality of many logs, particularly, but not only, in Central
Benedetti also invited stakeholders to reflect on the effects Europe. Overall, the sector is doing well, and there is huge
of climate change on the European forests: there is evidence potential in many areas, but in some instances, production
that softwood species will shrink, and hardwood species cannot meet a relatively strong demand because it is difficult
will increase, particularly in Central Europe; this could play to source raw materials. Thus, actions aiming to improve the
an important role in the future availability of raw materials. mobilisation of sustainably sourced logs should be prioritised.
131
Wood-based panels – clear progress in 2017; regulatory

and market opportunities in 2018 and beyond – Mr Clive
Pinnington, Managing Director, EPF
Mr Pinnington began his presentation with the good news

that wood-based panels production has grown by an
average of 2.3% over the last 5 years (compared to 1.8% GDP
over the same period). This faster progress than GDP shows
rising demand for these ubiquitous products, increasingly
seen in furniture, construction and other applications.
Successful advocacy was commended by Mr Pinnington

in winning increased prominence for Harvested Wood
Products (HWPs) in the new Bioeconomy Strategy, as well
as the recent LULUCF Regulation. Putting HWPs and wood-
based panels at the heart of these, together with the Circular Firstly, the threat to a level playing field that comes
Economy, have been clear recent accomplishments. So from the desire of Member States to pass their own laws,
too was the final text of the Renewable Energy Directive surpassing European regulation. VOCs are a good example
Recast that should secure respect for the Waste Hierarchy of this. EPF supports a harmonised European single market
as well as a level playing field for raw materials, free from and opposes national developments that jeopardise it.
undue market distortions. MEPs were thanked for their great Secondly, Mr Pinnington recalled that in Europe’s drive
support in helping to secure these advances. towards renewable energy, existing businesses must not
Looking ahead, Mr Pinnington highlighted three developments be neglected. The European Environment Agency (EEA) has
to MEPs. stated that 72% of Europe’s Net Annual Increment (NAI) in
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forests is currently harvested, meaning that there is limited use of HWPs, such as wood-based panels that can extend
supply. It is essential that parliamentarians and regulators the carbon cycle. This will continue to bring technically
recall this when considering future bioenergy use. Lastly, EPF advanced products into our daily lives, improving them
applauded the recent IPCC report on climate change that whilst benefiting our planet at the same time.
highlights the need to plant more trees. Accepting a floor
recommendation to call also for timely sustainable forest Mr Brannen closed the session with thanks to all involved
management, Mr Pinnington closed by urging for greater and looked forward to the next meeting.
MEP Paul Brannen, MEP Maria Noichl, Mrs Margherita Micelli, Mr Diego Benedetti, Mr Clive Pinnington
6.2 Wood Dust: Revision of the Carcinogens and Mutagens

Directive (2004/37/EC)
On 13 May 2016, the European Commission proposed to Journal as Directive (EU) 2017/2398 and applies from
amend Directive 2004/37/EC by expanding its scope and by 16 January 2018.
including and/or revising occupational exposure limit values ➡ Hardwood dust: a limit is set at 3 mg/m3 for five
for a number of cancer-causing chemical agents. According years after the entry into force of the directive and
to the Commission, this would improve workers’ health is lowered to 2 mg/m3 thereafter.
protection, increase the effectiveness of the EU framework
and promote clarity for economic operators. On 16 May 2019, the European Commission scheduled a
Overall, the proposal received a broad welcome from “European Wood Dust Conference” in collaboration with the
stakeholders. After completion of the legislative procedure EU social partners of the “Woodworking” and “Furniture”
at first reading in the European Parliament and the Council, sectors (EFBWW, EFIC, UEA and CEI-Bois). The conference is
the presidents of the co-legislators signed the final act on intended to serve as a platform for exchange of information
12 December 2017. This was published in the Official and good practice on the implementation of the new limit
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value for hard wood dust, established by European Directive

On behalf of the European Hardwood sawmill, Mr Michel
2017/2398. Astier, responsible for the Social Affairs of the EOS
French Member FNB, gave an overview of the European
The conference was held in Brussels in the Steigenberger hardwood sawmill sector. The EOS Hardwood Member,
Hotel (avenue Louise 71 - 1050 Brussels). The participants Mr Michael Nied, General Manager of the hardwood
had the possibility to engage in discussions on subjects such sawmill plant “Karl Nied GmbH”, gave a technical
as measurement methodology, good prevention practices, presentation about the sawn machineries and the
and innovation in wood dust prevention. correlated hardwood wood dust implications.
6.3 Climate and Energy policies

The EU’s policies on climate and energy are based on Articles In 2017, GHG emissions in the EU had decreased by 22%
191-194 of the Treaty on the Functioning of the European according to preliminary data, which also covered emissions
Union. Under Article 191, combating climate change is from international air transport, but not emissions or
one of the objectives of the EU’s environment policy, while removals resulting from land use, land use change or
under Article 194 the EU promotes energy efficiency and forestry activities. (Source: Report from the Commission to
energy saving and the development of new and renewable the European Parliament and the Council, EU and the Paris
forms of energy. Climate Agreement: Taking stock of progress at Katowice
The EU remains on the right path to achieve the target of COP24, COM(2018)716, 26 October 2018.)
reducing GHG emissions by 20% below 1990 levels by 2020.
6.3.1 A “Strategic long-term vision for a prosperous, modern, competitive

and climate neutral economy by 2050 – A Clean Planet for all.”
On 28 November, the EU Commission published a “Strategic deployment of renewables; clean, safe and connected mobility;
long-term vision for a prosperous, modern, competitive and competitive industry and circular economy; infrastructure and
climate neutral economy by 2050 – A Clean Planet for all.” This interconnections; bio-economy and natural carbon sinks;
new EU document was officially presented to stakeholders carbon capture and storage to address remaining emissions.
- including EOS - on occasion of the meeting “Forestry and
Cork” organised on the same day by the EU Commission The most important statements of the Strategy
Directorate-general for agriculture and rural development. in a sawmill prospective:
The strategy presented ahead of the UN climate summit • New materials will play an important role as well,
(COP24) from 2 to 14 December in Katowice (Poland) whether rediscovering traditional uses such as wood
outlines the EU vision for a deep economic and societal in construction, or new composites replacing energy
transformations, engaging all sectors of the economy and intensive materials. Consumer choices will also matter for
society, in order to achieve the transition to a climate-neutral product demand”;
economy. The new document does not set targets or • Sustainable biomass has an important role to play in a
propose new initiatives to be taken. Instead it seeks to net-zero greenhouse gas emissions economy. Biomass
ensure that this transition is socially fair and enhances the can directly supply heat. When used in power generation,
competitiveness of EU economy and industry on global CO2 emitted can be captured creating negative emissions
markets, securing high quality jobs and sustainable growth when stored. And it can substitute for carbon intensive
in Europe. materials, particularly in the building sector but also
According to the Commission, in order to achieve a carbon through new and sustainable bio-based products such
neutral economy actions in seven strategic areas should be as biochemicals (e.g. textiles, bioplastic and composites);
envisaged. The concerned sectors are: energy efficiency; • A net-zero emissions economy will require increasing
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amounts of biomass compared to today’s consumption. on a negative emissions technology in the form of bioenergy
Depending on technologies and actions chosen, combined with carbon capture and storage to balance
significant differences exist, with highest projections remaining emissions,” the Commission’s communication
seeing an increase in bio-energy consumption by around states.
80% by 2050 compared to today. The eighth “assesses the impact of a highly circular economy
• A biomass-based transition is limited by the availability and the potential beneficial role of a change in consumer
of land. Depending on the biogenic material from which choices that are less carbon intensive” and looks at the
the biomass is produced, the impacts on land use, the EU potential to “strengthen the land use sink, to see by how much
natural sink, biodiversity and water resources can differ this reduces the need for negative emissions technologies”.
substantially. The transition of our economy will always
have to be careful how to make best use of scarce land Biodiversity and ecosystem services for climate
and other natural resources and ensure that biomass is mitigation and adaptation
only used in the most efficient and sustainable way. Terrestrial and marine ecosystems are an essential asset
for mitigating climate change. At global level, these natural
Comprehensive information on the Strategy “carbon sinks” absorb 50% of anthropogenic greenhouse
The European Commission’s plan to slash greenhouse gas gas emissions, including in particular through the oceans.
output by mid-century sets out eight scenarios, ranging
from an 80% cut, as agreed by EU leaders even before the Maintaining and further increasing the natural sink of
Paris Agreement, to a goal of net-zero emissions by 2050. forests, agricultural lands and wetlands in the EU is
important. It also helps to compensate any remaining
Five of the eight pathways outline different strategies to cut greenhouse gas emissions that cannot be avoided. In this
emissions by 80% compared to 1990 levels, which the EU context, preserving and restoring ecosystems and nature-
executive assumes would equate to an 85% net reduction based solutions have a key role to play and provide multiple
when the potential for land use and forestry as a carbon sink benefits for mitigating climate change and adapting to its
is factored in. consequences. They provide a set of services that protect us
from the effects of climate change, such as water retention,
All require large increases in the consumption of renewable flood control, air quality improvements and protection
electricity – an approach enthusiastically championed by against desertification and combat the heat island effect in
utilities and generators – with differences such as a six-fold cities while contributing to climate change mitigation.
increase in storage capacity, or conversion to hydrogen At the global level, land-based mitigation options, including
or synthetic liquid fuels. A sixth approach outlined by the afforestation and land restoration, represent a potentially
Commission would combine all of the above at lower levels, large share of the total cumulative abatement potential, and
which the executive estimates could lead to an emissions are therefore important elements in climate stabilisation.
cut of 90%, when carbon sinks are included. Mitigations in the land sector must keep pace with emission
Only the last two mooted pathways envisage achieving reductions in the fossil-fuel sector, not offset one against the
‘carbon neutrality’ by 2050. “The seventh scenario pushes all other.
zero-carbon energy carriers as well as efficiency, and relies
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Therefore, it is of a paramount importance to change systems and consumer behaviour will help to further
production processes, patterns of consumption, recycling moderate energy demand. As to the remaining energy
and disposal of biological resources drastically. Integrating needs, fuel switching will need to happen with almost all
the bioeconomy into the (semi)circular economy model homes using renewable heating (electricity, district heating
is the key element for the development of a sustainable (produced from renewable sources), renewable gas and
society, since the circular bioeconomy is a cornerstone solar thermal). Importantly, biogas, hydrogen (up to some
linking forestry, agriculture and fisheries to the industrial proportion) or e-methane produced from renewable
production of bio-based products that are functional for electricity are renewable gaseous fuels that could all play
both sustainable land use and societal services. a role in existing buildings without changing the current
transmission/distribution grid and type of appliances.
In a circular bioeconomy perspective, it is of paramount
importance that products originate from the development 80% of the 2050 buildings’ stock exists today. An integrated
of new local agroindustrial supply chains, creating new case approach and consistency across all relevant policies will be
studies and new regional standards and projects. The value necessary for the modernisation of the built environment
chain coming from the regenerative management of forest and mobilisation of all actors. This is a condition sine qua
products is another area of opportunity. non to engage citizens and businesses in the necessary
renovation activities.
The promotion of bioenergy production in Europe may
imply the conversion of natural ecosystems outside the Focus on the wood products competitors
EU boundaries through international trade. This so- The production of many industrial goods like glass, steel
called indirect effect has to be carefully accounted for in and plastics will see further significant reductions in energy
the environmental assessment of bioenergy production. needs and process emissions, particularly with increasing
Mitigation options may also imply trade-offs between local recycling rates.
and global pollution (e.g. a bioenergy plant using local
wood resources or large livestock facilities) and between Many industrial process-related emissions will be very
mitigation and adaptation. difficult to eliminate. Some options to mitigate them
nonetheless exist. CO2 can be captured and stored and
Partnerships with industries used. Instead of fossil fuels, both renewable hydrogen and
Partnerships with industries will be required to boost sustainable biomass can be a feedstock for a number of
carbon-neutral innovation at all stages, in particular for industrial processes, such as steel production and certain
those industries with process-based emissions. This will chemicals
lead to changes in feedstock (e.g. bio-refineries and green
chemistry) and alternative materials (e.g. using engineered Steel, cement and chemicals dominate industrial emissions.
wood instead of cement and steel in construction). In the next 10 to 15 years, technologies that are already
Partnerships with industries are also needed to develop the known will need to demonstrate that they can work at scale,
radical breakthroughs needed to fully decarbonise some and some of them are indeed already being tested at small
‘difficult’ transport means, such as aviation, shipping and scale, e.g. hydrogen-based primary steel production.
heavy-duty road transport.
First Reactions to the Strategy
Buildings The Greens/EFA group in the European Parliament already
Buildings, combining the residential and services sectors, yesterday reacted to the European Commission’s Climate
currently represent the largest share of final energy Strategy 2050 stating that the new Strategy “misses the
consumption in the EU – about 40% of the total in 2015. opportunity to set clear targets for EU governments to
Better building insulation and other measures to improve significantly reduce their greenhouse gas emissions and keep
the housing stock on a much higher scale than today will global temperature rises under 1.5c. While, it is welcome that
help reduce energy use for heating. This will play a key role the European Commission is matching its obligation as part
in decarbonisation. More efficient products and appliances, of the Paris Agreement to come out with a long-term strategy
deployment of “smart” buildings/appliances management before 2020, none of the eight scenarios documented reflect
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any sense of urgency. The Strategy shows all the benefits ➡ The reliance of the strategy on “unsustainable” quantities
more ambitious climate policy will bring to our society, but of imported biomass, concerned campaigners Transport
at the same time proposes business-as-usual for the next and Environment. “Shipping and aviation can’t continue
decade”. to freeride on other sectors’ efforts,” said executive
director William Todts. Forest campaign group Fern’s
Lobby groups in Brussels and across Europe have been Kelsey Perlman said that most of the strategy’s scenarios
reacting to the European Commission’s long term strategy envision a doubling of bioenergy consumption that
for slashing the EU’s greenhouse gas emissions. would “leave the EU dangerously reliant on burning trees
The International Association of Oil and Gas Producers’ that we need to suck more CO2 out of the atmosphere”.
director of EU affairs, François-Régis Mouton, said the
industry looked forward to giving carbon capture and Next steps:
storage and hydrogen the “place they need to support The European Commission invited the European Council,
reaching the EU’s objective under the Paris Agreement”. the European Parliament, the Committee of the Regions
Electricity sector represented by Eurelectric said the and the Economic and Social Committee to consider the
electrification required for decarbonisation would need EU vision for a climate neutral Europe by 2050. In order to
increased investment. “Clear long-term signals will therefore prepare EU Heads of State and Government for shaping the
be required to ensure investor confidence,” said secretary Future of Europe at the European Council on 9 May 2019 in
general Kristian Ruby. Sibiu, ministers in all relevant Council formations should
The wind power sector could help increase the share of hold extensive policy debates on the contribution of their
electricity in energy to cut energy-related emissions by 90% respective policy areas to the overall vision.
by 2050, said WindEurope CEO Giles Dickson. Member States were expected to submit to the European
But lobbying campaigners Corporate Europe Observatory Commission, by the end of 2018, their draft National Climate
(CEO) said the strategy relied on gas and “unproven” carbon and Energy Plans, which are central for the achievement of
capture technologies as a result of “heavy gas industry the 2030 climate and energy targets and which should be
lobbying”, instead of leading the EU away from fossil fuels. forward-looking and take into account in the EU long term
Brussels-based green umbrella group, the European strategy. In addition, an increasing number of regions,
Environmental Bureau, “cautiously” welcomed the strategy municipalities and business associations are drawing
but warned the bloc must reach net-zero emissions by 2040, up their own vision for 2050 which will enrich the debate
a decade earlier than envisioned by the Commission’s most and contribute to defining Europe’s answer to the global
ambitious scenario. “It’s now up to governments, industry challenge of climate change.
and people everywhere to accelerate the speed at which Internationally, over the coming year the EU should expand
we’re moving,” said EEB climate and energy policy officer its cooperation closely with its international partners, so
Roland Joebstl. that all parties to the Paris Agreement develop and submit a
long-term national mid-century strategy by 2020 in the light
of the recent IPCC Special report on 1.5̊ Celsius.
6.3.2 UN climate summits COP24
The UN climate summits, i.e. so called COP (Conference of to the Kyoto Protocol (CMP 14) and the Conference of
the Parties) are global conferences, in the course of which Signatories to the Paris Agreement (CMA 1).
action for climate policy is negotiated. Poland hosted On 12 Decmber 2018 the Polish presidency announced its
them twice - in 2008, in Poznań and in 2013, in Warsaw. In next initiative - the Katowice Ministerial Declaration “Forests
December 2018, for the first time, the climate summit took for Climate.” The meeting was attended by Minister of the
place in Katowice. Environment Henryk Kowalczyk and Paola Deda, OiC,
The 2018 year’s summit included: the Conference of the Forests, Land and Housing Division, UNECE, among others.
Parties to the United Nations Framework Convention on
Climate Change (COP24), and the Meeting of the Parties
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The role of forests in the Paris Agreement and there is no future without forests. For this reason, during
The Paris Agreement shows a general will to get involved COP24 a special event regarding the Parties’ support for
in a global effort aimed at achieving a balance between the Katowice Ministerial Declaration “Forests for Climate”
anthropogenic emissions of greenhouse gases deriving from was held for ministers and chairmen of delegations. The
sources and their absorption by scrubbers and absorbing document was adopted by acclamation. As emphasized by
agents. Responsibility for achieving this goal lies with all Minister of the Environment Henryk Kowalczyk, the forest
governments, because it can only be achieved through a cover of Poland’s territory is systematically expanding. “From
global effort. The fifth article of the Paris Agreement is one of 1995 to 2014, the area of forests in our country increased by
the most important articles because it indicates the way to 504,000 hectares. This has been achieved thanks to, among
implement the basic premise of this document, that is, the others, the State Forests supervised by the Ministry of the
balance between emissions and absorption in the second Environment,” he declared. Among the many Parties that
half of this century. The parties should take measures in declared their willingness to endorse the Declaration were
order to preserve and improve the state of absorbers and present ministers and representatives of delegations from
greenhouse gas reservoirs, including forests. Multifunctional countries such as Indonesia represented by minister of the
and sustainable forest management is fundamentally environment and forestry H.E. Siti Nurbaya Bakar, but also:
important for achieving climate neutrality. North Korea, Tanzania, Japan, Germany, Finland, Russia,
There is no future without counteracting climate change, France, Italy, as well as Austria.
In the picture: Lake Carezza, Western Dolomites, Italy.
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The Ministerial Katowice Declaration on Forests for the Climate
The Ministers / the Head of Delegations attending the twenty-fourth session of the Conference
of the Parties (COP24) of the United Nations Framework Convention on Climate Change (UNFCCC),
held in Katowice, Poland, from 2 to 14 December 2018,
Recalling that in order to achieve the long-term temperature goal, the Parties to the Paris
Agreement aim to reach global peaking of greenhouse gas emissions as soon as possible, recognizing
that peaking will take longer for developing country Parties, and to undertake rapid reductions
thereafter in accordance with best available science, so as to achieve a balance between
anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of
this century, on the basis of equity, and in the context of sustainable development and efforts to
eradicate poverty,
Further recalling that Parties should take action to conserve and enhance, as appropriate, sinks
and reservoirs of greenhouse gases, including forests and forest products as well as to strengthen
cooperation in this respect,
Affirming that there is no future without addressing climate change, and forests are a key
component to achieve the goals of the Paris Agreement, which will contribute to building a community
with a shared future for humankind,
Welcoming the finding of the IPCC Special Report on the impacts of global warming of 1.5°C
which reveals that all pathways that limit global warming to 1.5°C project the use of carbon dioxide
removal (CDR) that is subject to multiple feasibility and sustainability constraints, while requiring rapid
and far-reaching transitions in energy, land, urban and infrastructure and industrial systems that imply
deep emissions reductions in all sectors, a wide portfolio of mitigation options and a significant
upscaling of investment,
Acknowledging the important role of forests as sinks and reservoirs of greenhouse gases, in
mitigating climate change, and simultaneously recognizing the need for reducing emissions from
deforestation and forest degradation, and forest conservation, sustainable management of forests,
enhancement of forest carbon stocks, as well as alternative policy approaches, such as joint mitigation
and adaptation approaches for the integral and sustainable management of forests, while addressing
and respecting social and environmental safeguards and objectives,
Recognizing that climate change is affecting forests, under certain circumstances, as a result
of natural disasters, leading to increased emissions, affecting the carbon storage capacity of forests
and underlining the need to increase the capacity of forests to adapt to climate change,
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Further recognizing that forests have a decisive role to play in the sequestration and storage
of carbon in the soil, trees and other vegetation, and in providing goods, resources and materials with
a smaller carbon footprint, such as harvested wood products,
Sharing the UN Strategic Plan for Forests’ vision of a world in which all types of forests and
trees outside forests are sustainably managed, contribute to sustainable development and provide
economic, social, environmental and cultural benefits for present and future generations. Recognizing
that multifunctional and sustainable forest management contributes to nature conservation, as well
as constitutes a keystone in achieving a balance between anthropogenic emissions by sources and
removals by sinks,
Emphasizing that healthy, biologically diverse, and resilient forests adapted to climate change
have important benefits for species habitat and biodiversity, and ensure the continued provision of a
wide range of ecosystem services that are essential to human health and wellbeing,
Further recognizing the role of indigenous peoples and local communities in conserving and
sustainably managing forests for the benefit of present and future generations,
Building on milestone documents and processes such as the 2030 Agenda for Sustainable
Development, and its SDGs, the UNFCCC and related legal instruments, the Warsaw Framework for
REDD+, the CBD and the Aichi Biodiversity Targets, and the UN Strategic Plan for Forests, as well as
other, global and regional initiatives regarding sustainable forest management, and stressing the
importance of strengthening synergies at the national level in implementing UNFCCC, CBD, UNCCD,
UNFF, where appropriate,
1. Pledge to accelerate our actions to ensure that the global contribution of forests and forest
products is maintained and further supported and enhanced by 2050, in order to support the
achievement of the long term goal of the Paris Agreement.
2. Encourage the scientific community to continue to explore and quantify the contribution of
sinks, and reservoirs of greenhouse gases in managed lands, including forests, to achieving a balance
between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second
half of this century, as well as to explore ways to increase this contribution and welcome the work
done up to now.
3. Encourage non-party stakeholders including cities, regions, businesses and investors, to

continue to display their ambition and commitments in their forestry related climate actions through
the Marrakech Partnership for Global Climate Action and the NAZCA Platform.
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6.3.3 Inclusion of greenhouse gas emissions and removals from land use, land use
change and forestry into the 2030 climate and energy framework: the new
European legislative proposal
In May 2018, the Regulation on land use, land-use change and land use change and forestry in the 2030 climate and energy
forestry (LULUCF) was adopted. It incorporates emissions framework, and amending Regulation (EU) No 525/2013 and
and removals from land into the 2030 climate and energy Decision No 529/2013/EU, Members States had received the
framework in line with the Paris Agreement, which points “Guidance on developing and reporting Forest Reference
to the critical role of land use in reaching long-term climate Levels in accordance with Regulation (EU) 2018/841”.
mitigation objectives. The LULUCF Regulation establishes Indeed, the LULUCF Regulation requires the Member States
the EU’s commitment for 2021-2030 to produce net-zero to submit their National Forestry Accounting Plans, including
emissions from the described scope of the Regulation. Its a proposed FRL, to the Commission by 31 December 2018
scope covers all managed land, including forest, cropland, for the period from 2021 to 2025, and by 30 June 2023 for
grassland and wetland by 2026. It simplifies and upgrades the period from 2026 to 2030. While the guidance provided
the accounting methodology under the Kyoto Protocol in this document is not binding on the Member States, it
and Decision No 529/2013/EU. It also establishes a new EU seeks to help the Member States to interpret the LULUCF
governance process for monitoring how Member States Regulation, and provides examples of possible technical
calculate emissions and removals from activity in their approaches for preparing the Forest Reference Levels
forests. (FRLs). During the 2019, Technical assessment of the NFAPs
Following the adoption of the Regulation on the inclusion will be carried on by the Commission and experts appointed
of greenhouse gas emissions and removals from land use, by Member States.
On 25 September 2018, EOS, together with three organisations of Europe. Forests are home to at least 80 percent of the
of the European forest-based sector, co-organised a world’s remaining terrestrial biodiversity and forests and
joint workshop on the practical consequences of the forest sector can positively contribute to the climate
recently adopted Regulation for the inclusion of Land change mitigation and adaptation by removing CO2 from
Use, Land Use Change and Forestry (LULUCF) within the atmosphere. Sustainable forest management also help
the 2030 EU Climate and Energy framework. The main to maintain the fertility of the soil, protect watersheds,
focus of the event was the analysis the impact of the new and reduce the risk of natural disasters. At the same time
forest reference levels to be set by the Member States on forest are an important source of economic growth and
the annual harvest levels in European forests and potential employment. Forest-based industries represent about
implications for the domestic wood supply in the EU, and 7% of EU manufacturing GDP. They have a combined
specifically on the down-stream value chains. production value of €460 billion, with a total added value of
€135 billion on a turnover of €485 billion. These employed
Mr Simon Kay and Mr Giacomo Grassi from the European 3.3 million persons across the EU-28 in 2015 or 11 % of the
Commission addressed aspects linked to the Commission manufacturing total (source: Eurostat). Raw material used
guidance and implementation of the LULUCF Regulation by the forest-based industries provides income to around
and especially the rules for setting up of new Forest 16 million forest owners in the EU. In the workshop, the
Reference Levels. representatives from France, Poland, Sweden Switzerland,
The distinctiveness and specificity of the LULUCF were Romania, Finland and Spain will describe the respective
explained by several speakers hailing from different parts national orientation for optimising the sector’s contribution
141
to climate change mitigation, while also ensuring to A video recording of the event is available on the EOS video
enhance the competitiveness of the forest-based industries. gallery:
The event was moderated by Mr Aigar Kallas, Managing https://www.eos-oes.eu/en/press_videos.php
Director and Chairman of the Management Board of the
Estonian State Forest Management.

LULUCF: Practical consequences for the forest-based sector

Joint CEPF, CEPI, EOS and EUSTAFOR workshop
on the practical consequences of the introduction of the Regulation for the
inclusion of Land Use, Land Use Change and Forestry (LULUCF) within the2030 EU
Climate and Energy framework

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142

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European countries the current decade’s harvest levels
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On 26 October, the EU Commission published the annual progress report titled “EU and the Paris climate agreement:
Taking stock of progress at Katowice COP”. The document shows that despite a slight growth in emissions in 2017, the
EU remains firmly on track to meet its 2020 greenhouse gas emissions reduction target of a 20% reduction compared
to 1990. In 2017, EU GHG emissions were down by 22%, according to preliminary data (covering emissions from
international aviation, but not emissions and removals from land use, land-use change and forestry (LULUCF)). Over
the past 4 years, EU emissions were reduced by 3%. Most of the reduction has taken place in the energy supply sector
where emissions are down by 11%, as compared to 2013. Emissions from energy use in buildings show some year-to-
year variation due to weather-related changes in heating demand. However, they were 16 % lower in 2017 than in 2005
and the downward trend is projected to continue in the period to 2030. However, the EU Commission recognises that
there are still considerable challenges ahead, as emissions have decreased only slowly the past years.
LULUCF REPORTING: At present, the EU’s land stores more emissions than it emits and the LULUCF Regulation focuses
on creating incentives to preserve this situation. The LULUCF Regulation requires each Member State to ensure that
accounted emissions from land use are entirely compensated by an equivalent removal of CO2 from the atmosphere
through action in the sector. This ‘no-debit rule’ means that Member States have to offset emissions from deforestation,
for instance by equivalent carbon sinks from afforestation or improving the sustainable management of existing forests.
143
OF IMPORTANCE FOR THE SAWMILL INDUSTRY: There are noticeable patterns in GHG inventories and their accounts
at Member State level, although these are preliminary and are adjusted at the end of the accounting period in 2020
under LULUCF rules. Denmark and Ireland show net reported emissions, mainly as a result of high emissions from
cropland management (Denmark) and grazing land management (Ireland). Under accounting rules for the Kyoto
Protocol second commitment period, Belgium, Bulgaria, Cyprus, Finland, Latvia and the Netherlands show net debits
in this preliminary accounting exercise. Croatia, Estonia, Germany and Lithuania show increasing credits, while we
see decreases for Greece and Portugal. Belgium, Bulgaria and Finland have decreasing debits. No particular trends
emerge for Austria, the Netherlands, Romania, Slovakia and Slovenia. Trend reversals, with first increasing and then
decreasing credits, are shown for Denmark, France, Hungary, Italy, Spain, Sweden and the United Kingdom. Ireland and
Luxembourg show first decreasing and then increasing trends in credits. Finally, it should be noted that the EU’s target
reduction is 20 % from 1990 levels, Japan’s is 3.8 % from 2005 levels, China’s pledge involves a 40-45 % reduction in CO2
intensity by 2020 and increases in forest stock and the proportion of non-fossil sources in primary energy consumption,
and India’s a 20-25 % reduction in emissions intensity (excluding agriculture) compared to 2005.
The first meeting of the Commission expert group on Land review day, through a specific electronic portal and made
Use, Land Use Change and Forestry (LULUCF) took place on available to all experts.
6 February.
On this occasion, representatives from Member States were On 12 April, the two working weeks related to the
informed about how the European Commission (DG CLIMA) assessments of the National Accounting Plan (NAP) and
is planning to organise the evaluation of the National Forest Forest Reference levels (FRL) under the LULUCF Regulation
Accounting Plans (NFAP) including the forest reference have been concluded.
levels (FRLs).
• During the 2019 the Commission, in consultation with ➡ The European Organisation of the Sawmill Industry
experts appointed by the Member States, undertook a attended these two working weeks having being
technical assessment of the national forestry accounting appointed as observer in the LULUCF expert group.
plans submitted by Member States with a view to assessing
the extent to which the proposed forest reference levels The LULUCF Regulation required Member States to submit
have been determined in accordance with the principles their NFAPs, including a proposed FRL, to the Commission
and requirements set out in the LULUCF Regulation. by 31 December 2018 for the period from 2021 to 2025
- By April 2019, experts from Member States were expected (and by 30 June 2023 for the period from 2026 to 2030). Only
to have completed the first review of the NFAPs. Romania did not submit its National Accounting Plan.
The net emissions figures Member States arrive at – subject
The review process to approval by the European Commission – will count
• National experts were divided in sub-groups in order to towards a country’s overall emissions reductions, for which
avoid that that any Member State is responsible for the the EU-wide target is a 40% cut compared to 1990 levels.
technical assessment of its own NFAP. The Technical assessment of the NFAPs has been carried
• A sub-group Chair may request a Member State to present on by the European Commission and experts appointed
an overview of its NFAP to the relevant sub-group and to by Member States. Experts were called to ensure that
provide clarifications, where appropriate. the reporting by Members States is transparent and
• Each Sub-group appointed a rapporteur. Each rapporteur complete, and based on as consistent, comparable and
shall submit, in writing, a structured summary on accurate information as possible. Nevertheless, the
the progress and results of the sub-group’s technical complexity of the Regulation leaves considerable scope
assessment of an NFAP, hereafter called the “synthesis for interpretation.
report”. Rapporteurs should endeavour to ensure that the The Expert Group considered that the following Countries,
key views and opinions expressed in the sub-group are namely: Finland Sweden, Slovenia, Latvia and Poland
recorded in the synthesis report. should provide more precise information on the climate
• Synthesis reports were submitted at the end of each impact of increased logging presented in their NAPs.
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Timeline: By June 2019 - and only if necessary - Member FRANCE

States will be requested by the EU Commission to provide The forest management envisaged in the SNBC is more
further clarifications and/or to make technical corrections dynamic than the one envisaged in France’s FRL, in order,
to their own National Accounting Plans. The EU Commission in particular, to renew forest stands by making them more
will prepare requests to Members States having taken resilient to climate change, by bringing more biosourced
into consideration the recommendations prepared by the materials into the economy taking advantage of the
Experts Group in the Country’s Synthesis Reports. Member associated effects of temporary storage and substitution
States shall communicate their revised proposed forest with more emitting materials and fossil fuels.
reference levels to the Commission by 31 December 2019 The SNBC 2 seeks to improve the effectiveness of the forest-
for the period from 2021 to 2025. wood sector in order to achieve this target. Indeed, the latter
is strategic because it meets the need to supply the economy
LULUCF and wood products with biosourced and renewable energy and products, and
Key elements of a large majority of the National Accounting at the same time, contributes significantly to the carbon
Plans and the the role of wood (construction) products: sinks of the land sector through carbon sequestration in
forests and in wood products.
AUSTRIA The forest management envisaged in the SNBC is more
Both the Austrian Forest Strategy 2020+ and also the dynamic than the one
Austrian Climate and Energy Strategy, #mission 2030 As regards climate policy, the draft 2nd national low carbon
(2018) emphasize the importance of a sustainable forest strategy (SNBC 2) identifies the main following levers for the
management strategy. The land use related policies and forest sector:
measures identified in the #mission 2030 should help to 1. Improving forest carbon sinks by better forest
achieve the target for 2030 as defined in Article 4 of the management practices, which both adapt forests
LULUCF Regulation, in particular through: to climate change and preserve soils carbon stocks
• continuously increasing tree growth and timber (whose observation and statistical monitoring must
harvesting in Austrian forests on the basis of sustainable be guaranteed and improved). The enhancing of
forest management, with the aim of increasing carbon carbon sinks in the forest-wood sector will also include
storage in forests and harvested wood products in the the development of afforestation and a reduction in
long term and deforestation.
• increasing the use of domestic timber in construction and 2. Maximising the substitution effects and the storage of
utilizing the manifold opportunities of the bio-economy. carbon in wood products, thanks to:
• an increased wood harvest (in particular with an
BELGIUM increased wood marketing objective set by the National
In Wallonia, the Forest Code (Decree of 15 July 2008) has forest and wood programme for the 2016-2026 period)
introduced a certain number of constraints in favor of forest while ensuring that biodiversity is preserved;
conservation and the maintenance of ligneous materials • an incentive towards long-life uses (in particular
and carbon, including: through an intensified use of wood in construction)
• incentives for production of high quality wood and and development of recycling and energy recovery of
therefore use of wood in long-term applications with end-of-life products
gains in CO2 linked to substitution by other materials.
SLOVENIA
FINLAND According to the Resolution “GOZD in les – razvojna
According to the long- term forest strategy and the Finnish priložnost Slovenije’ (‘FORESTS and wood – Slovenia’s
Bio-economy Strategy: development opportunity’)”the following actions are
• the aim is to reduce dependence on fossil natural welcomed:
resources and create new economic growth and jobs in • to systematically label semi-finished products, products
line with the principle of sustainable development; and services in relation to their impact on greenhouse
• the role of promoting wood construction is recognised in gas emissions and on the environment throughout their
the Strategy as long-term storage carbon. entire lifecycle;
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• to promote the gradual use of wood in construction, is well suited to combine active forest management with high
the manufacturing industry, agriculture and energy: environmental standards whilst maintaining a substantial
good wood for products, poor wood for processing and carbon sink. Sustainable forest management influences
cellulose, and ligneous residues for energy sources; carbon dioxide removals and emissions in various ways,
• to define wood as a strategic raw material and forestry through the production of renewable raw materials that can
and the wood processing industry as important sectors; replace fossil fuels and materials that generate emissions of
• to strengthen the wood and wood products market, and greenhouse gases while maintaining or increasing carbon
to integrate the manufacturing, processing and sales stocks in biomass, soils and harvested wood products.
processes;
• to put education and training systems in place, and to UNITED KINGDOM
organise an accelerator service to promote and guide The development of a thriving forestry sector, through an
wood production and processing. industry-led action plan (Grown in Britain), is highlighted as an
essential element to achieve woodland planting aspirations
SWEDEN and deliver emissions savings in other sectors through the
Bio based fuels and materials that substitute fossil resources sustainable use of wood fuel as a source of renewable energy
are important for transition to a low carbon society. Sweden and harvested wood products substituting for other materials.

6.4 6.4 Sustainable finance

Sustainable finance
The European commission is currently working on a green taxonomy with the aim of
facilitating the investment necessary to achieve Europe’s climate targets, the
transition to a low carbon economy and a sustainable development model.
However, in order to respect its energy and climate targets for

2030, the European Union will require additional annual
investment of €150-177 billion until 2030.
In March
In March 2018,
2018, the the European
European Commission Commission published
published its its ACTION PLAN ON FINANCING SUSTAINABLE
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=C
ACTIONGROWTH, which sets out a comprehensive strategy to further connect finance with sustainability.
PLAN ON FINANCING SUSTAINABLE GROWTH, ELEX:52018DC0097&from=EN
which sets out aCopy of this document is available at the following link:
comprehensive strategy to further connect The action plan calls for a unified EU classification system to
finance with sustainability. clarify what constitutes a sustainable investment, including a
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52018DC0097&from=EN
Copy of this document is available at the following link: EU labels system in order to facilitate investors in identifying
The action plan calls for a unified EU classification system to clarify what constitutes a sustainable
146
investment, including a EU labels system in order to facilitate investors in identifying 'green' financial
‘green’ financial products. The common understanding of the investment process and enhance disclosure
what constitutes environmentally sustainable investment requirements.
will complement existing EU environmental policies by - Requiring insurance and investment firms to advise
providing a reference point which they can use in the future clients on the basis of their preferences on sustainability.
so that such policies develop more consistently across the - Incorporating sustainability in prudential requirements:
Union. banks and insurance companies are an important
Currently, financial institutions identify sustainable source of external finance for the European economy.
economic activities and sustainable investable assets in- • Enhancing transparency in corporate reporting. Revision
house and on a voluntary basis. This is time consuming and of the guidelines on non-financial information to further
costly, and the result is that different financial institutions align them with the recommendations of the Financial
use different taxonomies. Stability Board’s Task Force on Climate-related Financial
• A unified EU classification system - or taxonomy - will Disclosures (TCFD).
provide clarity on which activities can be considered Additionally, the Commission established a technical expert
‘sustainable’. It is at this stage the most important and group on sustainable finance (TEG) in July 2018. The TEG was
urgent action of the Commission’s Action Plan. requested to publish a report based on a broad consultation
In particular, the EU strategy on sustainable finance includes of all relevant stakeholders on selected economic activities
the following actions: and criteria for the first sub-set of economic activities
• Establishing a common language for sustainable finance, expected to make a substantial contribution to climate
i.e. a unified EU classification system – or taxonomy – mitigation.
to define what is sustainable and identify areas where Together with the “Action Plan on Financing Sustainable
sustainable investment can make the biggest impact. Growth”, the EU Commission published an EU-wide guiding
• Creating EU labels for green financial products on the principle, or ‘TAXONOMY’, to define sector-by-sector what
basis of this EU classification system: constitutes green investments and, ultimately, label green
- Clarifying the duty of asset managers and institutional assets. This new proposal was then sent now to the EU
investors to take sustainability into account in Council and the European Parliament for discussion.
The taxonomy that the European Commission is seeking to establish will have to
reflect the existing technologies and policies, and will need to be updated regularly.
It is not a standard, nor a mandatory list in which to invest. While the taxonomy will
only include activities defined as green, this does not mean that other activities
should systematically be considered brown (bad for the environment). Among
these other activities, some may make a positive contribution to the environment
that is very limited, while some are neutral, and others are “brown”.
KEY FEATURES: of an economic activity, in line with six environmental

1. A unified EU classification system (‘taxonomy’): objectives:
The proposal sets harmonised criteria for determining 1. Climate Change Mitigation
whether an economic activity is environmentally- 2. Climate Change Adaptation
sustainable. Step by step, the Commission will identify 3. Sustainable use and protection of water and marine
activities which qualify as ‘sustainable’, taking into resources
account existing market practices and initiatives and 4. Transition to a circular economy, waste prevention
drawing on the advice of a technical expert group that and recycling
is currently being set up. This should provide economic 5. Pollution prevention control, and
actors and investors with clarity on which activities are 6. Protection of healthy ecosystems.
considered sustainable. According to the Taxonomy regulation proposal, the
Article 3 of the Taxonomy regulation proposal sets out the Commission shall establish the technical screening
criteria for determining the environmental sustainability criteria through a series of delegated acts, the first of
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which will be on the economic activities delivering on 4. Better to advice to clients on sustainability: The
the first two environmental objectives (climate change Commission has launched a consultation to assess how
mitigation and climate change adaptation as per Article best to include ESG considerations into the advice that
6 and 7). investment firms and insurance distributors offer to
2. Investors’ duties and disclosures: The proposed individual clients.
Regulation will introduce consistency and clarity on
how institutional investors, such as asset managers, In the EU framework for
insurance companies, pension funds, or investment determining environmentally
advisors should integrate environmental, social and sustainable financial activities
governance (ESG) factors in their investment decision- by the EU Parliament,
making process. Exact requirements will be further lead negotiators MEP Bas
specified through Delegated Acts, which will be adopted Eickhout (Greens/EFA, NL) and MEP Sirpa Pietikäinen (EPP,
by the Commission at a later stage. FI) tabled amendments to the proposal that the European
3. Low-carbon benchmarks: The proposed rules will create Commission along with a package of measures following up
a new category of benchmarks, comprising the low- its action plan on financing sustainable growth.
carbon benchmark or “decarbonised” version of standard
indices and the positive-carbon impact benchmarks. The report included a ‘brown’ taxonomy to be added over
This new market standard should reflect companies’ time, defined as “criteria for economic activities with a
carbon footprint and give investors greater information negative environmental impact”. (This contrasts with EU
on an investment portfolio’s carbon footprint. executive’s proposal, which only aims at a positive approach,
disregarding environmentally harmful activities.)
EOS ADVOCACY ACIONS

In the Parliament report, the Rapporteurs Mr Eickhout and Mrs Pietikäinen proposed a new definition of ”sustainable
forest management” including criteria on biodiversity restoration.
EOS contacted several members of the EU Parliament underling that “it is imperative that efforts are made in order
to tackle climate change and eliminate environmental degradation. For this reason, it is of utmost importance that
finance responds to the objective of a sustainable development.”
In this framework, EOS stressed the following points:
• To mitigate climate change, it is necessary to reduce greenhouse gas emissions and store more carbon. Healthy
forests can do both. For this reason, governments and organizations can improve their corporate social responsibility
and reduce their environmental footprint through policies and procurement processes that encourage the use of
wood products coming only from sustainably managed forests.
• EOS believes in the importance of enhancing biodiversity and calls the Members of the EU Parliament to maintain in
the Article 2 – paragraph 1 – the internationally agreed definition of sustainable forest management. Introducing the
additional criterion such as “restoring biodiversity” (amendments n° 44) in the internationally accepted definition of
sustainable forest management might be controversial.
• Forests managed for timber have an important role to play in conserving global biodiversity. Scientific studies proved
unmanaged forests are often susceptible to disturbances including insect and disease outbreaks and generate a
much greater carbon debt if they are combusted during a wildfire, rather than a managed forest with much less dead
and dying fuel wood.
• The benefits of sustainable forests management should be emphasised recalling that the wood processed in
manufacturing facilities extends the forest-carbon stores to long-lived products.
Additionally, the “cascading use” was proposed in the final compromise amendment presented by the Greens on the
definition of “substantial contribution to the circular economy and waste prevention and recycling”. More specifically:
• An economic activity shall be considered to contribute substantially to the transition to a circular economy, including
waste prevention, re-use and recycling, covering the entire life cycle of a product or economic activity in different
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stages of production, consumption and end of use, where that activity minimises the use of resources or promotes
cascading use of material and the waste hierarchy…
• using natural energy resources, raw materials, water and land efficiently in accordance with the cascading use of
resources;
• promote sustainable bioeconomy based on the principle of cascading and regenerative use of renewable sources.
Also in this framework, EOS informed the Member of the EU Parliament that if the GREEN compromised amendment
would had been voted positively, the “cascading approach” will have legislative implication (A “regulation” is a binding
legislative act. It must be applied in its entirety across the EU). The transition toward resource efficient production
and consumption patterns is currently one of the main challenges in environmental science and in governmental
policies. This transition has led to a proliferation of meanings related to the resource efficiency concept. The concept
of ‘cascade’ is all but univocal as it does not find an unanimous definition by the scientific community being
very much subjected to interpretations. For this reason, EOS called the Members of the EU Parliament to
reject Compromise amendment I (compromise amendment replacing AMs 74-82, 454-480 -Proposal for a regulation -
Article 9) and favour the original text proposed by the EU Commission.
On 28 March 2019 the Plenary Session of the EU Parliament On 10 January 2019, the European Commission panel of
voted the “Proposal for a regulation of the European experts released its FIRST REPORT INTO CLIMATE RISK
Parliament and of the Council on the establishment of a DISCLOSURE, while the Members of the EU Parliament voted
framework to facilitate sustainable investment” (so called to oblige EU financial regulators to assess environmental
“Taxonomy” Regulation) on occasion of the EU Parliament factors affecting the stability of financial institutions.
plenary session in Strasburg. The proposal was adopted by The Report contains recommendations that will allow the
316 votes to 93 and 192 abstentions. The vote closes the Commission to update its non-binding guidelines on non-
Parliament’s first reading in view of an agreement with EU financial reporting with specific reference to climate-related
ministers in the next parliamentary term. The Council is yet information, in line with the recommendations of the Task
to adopt its position. Force on Climate-related Financial Disclosures (TCFD)
The amendments related to “restoring biodiversity” in the established by the Financial Stability Board, and with the
definition of Sustainable Forest Management” and the Commission proposal on a ‘taxonomy’ of sustainable
“cascading principle” have been both rejected. economic activities. The report contains proposals for
Positive for the Sawmill Industry the following adopted disclosing not just how climate change might influence
amendments: the performance of a company, but also the impact of the
• Switching to or increasing the use of use environmentally company itself on climate change.
sustainable renewable materials based on a full life The report proposes ways for companies to disclose the
cycle assessment and substituting particularly fossil- impact they may have on climate change in addition to their
based materials, which delivers near term greenhouse own exposure to climate change related risks. It outlines
gas emissions savings is one of substantial contribution principles for general disclosure, or information a company
actions to climate change mitigation”; “should” disclose. This includes key indicators and the role
• An economic activity shall be considered to contribute of the board in overseeing climate related risks.
substantially to the transition to a circular economy The report notes that companies “may consider” disclosing
where that activity, in line with the EU acquis, contributes the ratio of green bonds, issued according to a forthcoming
substantially to that environmental objective through EU Green Bond Standard.
any of the following means “fostering bio-economy
through the sustainable use of renewable sources for the Technical Experts on Sustainable Finance
production of materials and commodities”. The taxonomy working group (TWG) has been tasked with
developing these technical screening criteria for the EU taxonomy
NEXT STEPS: The EU Council spokesperson announced or classification system of environmentally sustainable economic
that the inter-institutional negotiations are expected to start activities, starting with the environmental objectives of climate
after the European elections. change mitigation and climate change adaptation.
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© Shutterstock
Between December 2018 and February 2019, the TWG plans. The document will be updated regularly to include
held a call for feedback, seeking stakeholder input on the additional dates and details once they are known.
proposed 1st round climate mitigation activities and on the In the context of the European Commission’s ongoing
usability of the taxonomy. In addition, the Technical Expert work on developing a classification system for sustainable
Group on Sustainable Finance (TEG) selected experts from investments, the European Organisation of the Sawmill
relevant sectors among those who expressed an interest to Industry expressed with other Organisations representing
participate in the second round of stakeholder outreach. the Forestry Based Sector, its views on the topic of forest
The Commission and the TEG aim to foster a transparent management in the proposed taxonomy regulation, notably
and meaningful outreach process as well as communication on the first round of climate mitigation activities drawn up
with experts, other relevant stakeholders, and the media. by the Commission’s Technical Expert Group on Sustainable
This document provides an overview of current outreach Finance (TEG).
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Brussels, 19 February 2019
The role of forest management in the upcoming taxonomy regulation for

sustainable investments
In the context of the European Commission’s ongoing work on developing a classification system for
sustainable investments1, the undersigned organisations would like to express their views on the topic of
forest management in the proposed taxonomy regulation, notably on the first round of climate
mitigation activities drawn up by the Commission’s Technical Expert Group on Sustainable Finance (TEG)
2.
The undersigned organisations welcome the fact that forest management activities have been included in
the scope of the proposed regulation, which applies the definition of Sustainable Forest Management
(SFM) that European countries and the European Commission agreed upon at the Ministerial Conference
on the Protection of Forests in Europe 3 and that was referred to in the 2013 EU Forest Strategy4. Given
the fact that the proposed taxonomy regulation also aims to define a set of criteria and that SFM
contributes in many ways to several UN Sustainable Development Goals as well as the Paris Agreement
goals, it is crucial that a holistic approach to forest management is applied while keeping in mind that
forest policy is a competence of the EU Member States.
Sustainable and active forest management plays an important role in meeting EU climate and energy
policy objectives, e.g. tackling climate change, improving energy security and promoting jobs and
economic growth. SFM is needed to reach these targets. It provides three main climate benefits: CO2
sequestration in resilient, growing forests; carbon storage before and after harvesting; and a renewable
and climate-friendly raw material that substitutes energy-intensive materials and fossil fuels.
Unfortunately, the TEG’s first set of climate mitigation activities only classifies existing forest
1
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the establishment of
a framework to facilitate sustainable investment
2
https://ec.europa.eu/eusurvey/runner/taxonomy-feedback-first-round-climate-change-mitigation-activities
3
https://foresteurope.org/wp-content/uploads/2016/11/Commitments_all.pdf
4
https://ec.europa.eu/agriculture/forest/strategy_en
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management as positive if it improves carbon sinks in forests, and disregards the holistic concept of
sustainable forestry and the related carbon cycle.
With regard to forestry, the first round of climate mitigation activities overlooks the fact that SFM, its
principles and tools have already been defined in a comprehensive manner and that it can therefore
serve as a point of reference for various sectors. EU legislation should, therefore, make full use of these
instruments before yet another system addressing the same issues is developed. Given that forest policy
falls within Member State competence and as addressed in the EU Forest Strategy, the Standing Forestry
Committee should remain the forum for discussing all forest-related issues, ensuring coordination and
coherence of forest-related policies. Consequently, this body should be involved in developing the SFM
criteria and indicators to be used in the context of sustainable finance (COM(2013)659 final, page 5).
In its future work on the first round of climate mitigation activities, we would recommend that the TEG
draw more on expertise from the forest sector, including from the organisations involved in forest-
related policy-making in the EU. This would minimise the risk of shortcomings and misconceptions in the
proposed structure of the taxonomy system related to forestry.
Subdividing forestry activities into afforestation, rehabilitation/restoration, reforestation and existing

forest management points to a lack of comprehension of forestry activities. It should be noted that,
afforestation is an activity that takes place on non-forest land. Given the fact that the primary focus of
the entire ‘sustainable finance’ initiative should be climate mitigation and adaptation, the categories and
definitions should also be in line with the Kyoto Protocol definitions and the LULUCF regulation5. In
addition, the inexistent link between active forest management and increased resilience to climate
change marks a missed opportunity to include adaptation aspects in the scope of existing forest
management.
The undersigned organisations strongly recommend that forest management be classified as a

sustainable activity if it complies with the internationally agreed definition of SFM and at least keeps the
forest in its existing condition. With regard to metrics and parameters for forest management activities, it
is highly advisable to ensure consistency with the risk-based approach for forest biomass of the
Renewable Energy Directive (recast)6 This would avoid confusion, legal uncertainty and subsequent
restrictions to investments in the forestry sector.
Finally, not allowing forest biomass to substitute non-renewables as a renewable and carbon-neutral fuel
is neither in line with the EU 2050 Climate Strategy7, the 2030 climate and energy targets8, nor with the
targets suggested in this same legislation (Article 6a and 6h, i.e. generating renewable energy and
producing fuels from renewable sources).
The aforementioned recommendations will allow the European Union to send out a clear message to
investors on how to promote the development and sustainable use of forest resources and the entire
forest-based value chain with a view to positively contributing to achieving the Paris Agreement climate
objectives.
5
LULUCF Regulation
6
Recast of the Renewable Energy Directive
7
https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_en.pdf
8
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52014DC0015&from=EN
152
Political agreement on transparency rules Investment managers will now have to disclose their
Following a provisional agreement reached the first week of exposure to environmental and social risk, as well as
March to create a new category of low-carbon benchmarks the environmental and social impacts of their financial
(preliminary agreement on a proposal creating a new category products. In addition, they will have to provide evidence that
of financial benchmarks aimed at giving greater information products marketed as sustainable meet clear standards.
on an investment portfolio’s carbon footprint: specifically EU But negotiators chose to limit the scope of the regulations
climate transition benchmarks, which aim to lower the carbon to investment management companies with over 500
footprint of a standard investment portfolio. More precisely, employees.
this type of benchmarks should be determined taking into The agreed measures are part of that package, together
account companies that follow a measurable, science-based with the EU rules for the creation of benchmarks for low-
“decarbonisation trajectory” by end-2022, in light of the long- carbon investment strategies agreed on 25 February by the
term global warming target of the Paris agreement. And EU European Parliament and Member States. The Commission
Paris-aligned benchmarks, which have the more ambitious is working with the co-legislators with the objective to reach
goal to select only components that contribute to attaining an agreement on the remaining part of the package: the
the 2°C reduction set out in the Paris climate agreement), Commission proposal to establish a unified EU classification
the Romanian presidency of the Council and the European system (‘taxonomy’) of sustainable economic activities.
Parliament reached on 6 March a preliminary agreement on
a proposal introducing transparency obligations on how Next steps: The political agreement will now be submitted
financial companies integrate environmental, social and to EU ambassadors for endorsement. It will then undergo
governance factors in their investment decisions. a legal linguistic revision. Parliament and Council will be
The text agreed sets out a harmonised EU approach to the called on to adopt the proposed regulation at first reading.
integration of sustainability risks and opportunities into the
procedures of institutional investors. It requires them to
disclose:
• the procedures they have in place to integrate
environmental and social risks into their investment and
advisory process;
• the extent to which those risks might have an impact on
the profitability of the investment;
• where institutional investors claim to be pursuing a
“green” investment strategy, information on how this
strategy is implemented and the sustainability or climate
impact of their products and portfolios.
The proposed regulation should in practice limit possible
“greenwashing” – i.e. the risk that products and services
which are marketed as sustainable or climate friendly in
reality do not meet the sustainability/climate objectives
claimed to be pursued.
It covers the following financial services sectors:

• investment funds;
• insurance based investment products (life insurance
products with investment components available as
individual retail life policies as well as group life policies);
• private and occupational pensions,
• individual portfolio management; and
Photo: EOS
• both insurance and investment advice.
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6.5 COFO24, the World Forest Week in Rome, July 2018
The European Organization of the Sawmill Industry participated in the biennial session of the Committee on Forestry (COFO)
– the highest FAO Forestry statutory body – which was held in Rome on 16-20 July 2018.
Photo: EOS
The Committee brings together heads of forest services for Sustainable Development. In this regard, it is a useful
and other senior government officials to identify emerging complement to the Global Forest Resources Assessment
policy and technical issues, to seek solutions and to advise (FRA) coordinated by the FAO and last published in 2015
FAO and others on appropriate action. (a new edition is expected in 2020). The European Member
Forests and trees make crucial contributions to food States took a strong position in favour of SOFO 2018, asking
security, provision of drinking water, renewable energy and for its key messages to be disseminated widely in the
rural economies. They provide around 20 percent of income appropriate fora, and for the FRA to be promoted as the main
for rural households in developing countries - notably more reference data source on forest resources at a global level.
in many areas - and fuel for cooking and heating for one in Additionally, Member States underlined the importance
every three people around the world. of monitoring progress and collecting reliable evidence
During the meeting it was emphasized that Forests are on forests and their contributions to the 2030 Agenda,
essential for meeting the 2030 Agenda objectives ranging including gender-disaggregated data, and requested the
from tackling climate change to conserving biodiversity, FAO to provide capacity-building support in this regard.
reducing inequalities and improving urban habitats. The 24th session of COFO and the 6th World Forest Week
The FAO in the State of the World’s Forests 2018 was also explored the contributions that forests can make to the
discussed: the report emphasizes the importance of clear achievement of the Sustainable Development Goals (SDGs)
legal frameworks regarding forest tenure rights, welcomes and other internationally agreed goals; explored ways
the growing trend to strengthen local governance, and calls and means to accelerate progress, in particular, towards
for effective partnerships and private sector engagement to Goal 15 (Protect, restore and promote sustainable use
pursue sustainable goals. The State of the World’s Forests of terrestrial ecosystems, sustainably manage forests,
2018 focuses on the contribution of forests and trees to combat desertification, and halt and reverse land
achieving several goals and targets of the 2030 Agenda degradation and halt biodiversity loss). It also discussed
154
actions for implementing the policy recommendations An important session from EOS point of view was the
of the Committee on World Food Security regarding the one dedicated to urban and peri-urban forestry. In that
contributions of forests to food security and nutrition; session, EOS also delivered a message. The EOS Secretariat
reviewed opportunities and challenges for urban and peri- stated: “What about planting a second forest – reinforcing
urban forestry; considered the implementation of FAO’s and promoting wood-based constructions? Storing CO2,
climate change strategy and specific tasks related to forest wood-based products play a key role in making our cities
resilience, health and forest fires; and provided strategic sustainable. The use of wood products should be integrated
direction for the future work of FAO in forestry. in the urban forest concept.”
6.6 Initiative Report on Europe’s woodworking

competitiveness strategy by the European Economic
and Social Committee
In December 2017, the European for job creation, trade expansion and social development.
Economic and Social Committee It hopes to contribute to recent EU initiatives such as the
(EESC), consultative body of mid-term review of the EU Forest Strategy; the review of
the European Commission the the Bioeconomy Strategy; the review of the EU Timber
European Commission decided Regulation; and the EU Industrial Policy Strategy: Investing
to draw up an Initiative Report on Europe’s woodworking in a smart, innovative and sustainable industry.
competitiveness strategy. In the framework of this information report, a public hearing
The EESC contributes to strengthening the democratic was organised on 9 April 2018 in order to collect input directly
legitimacy and effectiveness of the European Union by from representatives of the sectors. Speakers described the
enabling civil society organisations from the Member States wood industries as an important sub-sector of the overall
to express their views at European level. bioeconomy. The wood-based bioeconomy is important in
In the framework of the revision of the European Forest terms of both material and energy-related uses; moreover, it
Strategy expected for 2018 and in the light of the European was stressed that increasing the demand for wood products
Renewed Industrial Policy, this informative report aims at can play a decisive role in the global carbon cycle and in
contributing to various aspects of these two documents and tackling climate change. Wood materials can substitute for
calls for appropriate policy actions in order to support the GHG-intensive materials. Studies of such substitution effects
woodworking industry to succeed in the rapidly evolving generally find a reduction in GHG emissions when biomass
global manufacturing landscape. systems are compared to fossil reference systems. Member
Although a study group made up by members of the States should create a positive legislative environment to
EESC elaborated the report and the recommendations promote the use of wood products.
to be addressed to the EU Institutions, EOS was selected Forests are part of the supply chain for the wood used by
as consultative expert for the group, therefore the EOS the woodworking industry. Among the main construction
Secretariat provided concrete advice to be included in the materials, wood is a renewable resource. It is worth using
Report. silvicultural practices and regeneration and harvesting
On occasion of the plenary session held on 12-13 December methods that support forest growth and health.
2018, the European Economic and Social Committee Bearing in mind the crucial role of forests for the EU’s
(EESC) adopted the Informative Report on the Europe’s woodworking sector, the EESC calls for measures to
woodworking competitiveness factors. address the lack of skilled workers in forestry. The lack of a
qualified forest harvesting workforce is negatively impacting
EESC’s considerations and recommendations: wood availability. Member States should ensure adequate
This information report aims to assist the EU institutions in education, training and skills programmes, allowing for
articulating a strategy and possibly ad hoc initiatives that minimum proficiency and health and safety standards
can optimise the economic potential of the wood industry related to wood mobilisation, especially with regard to
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wood harvesting. An EU study on the “identification of in order to maximise their positive contribution to society,
current and forecast employment and business growth in ecology and biodiversity, and even help mitigate climate
forestry and identification of current and forecast human change by balancing part of the global carbon budget.
resources, skills development and training requirements in To ensure the proper industrial development of the
the woodworking industries” should be carried out by the woodworking sector and its implementation, it is important
competent DG of the European Commission. to closely monitor and encourage developments in the
The ongoing mid-term review of the EU Forest Strategy wood supply chain (including commercial aspects and
will put forward consistent measures to boost the chain of custody certification – CoC) enabling the highest
competitiveness of the wood industries. Since this sector value for products.
uses large quantities of wood, its availability – if possible Given that the European Commission is considering
at a competitive price, and always in accordance with amending the product scope of the EU Timber Regulation
sustainable forest management practices – is a determining (No 995/2010), the EESC calls for the inclusion of the
factor for the performance of the sector. following product categories:
• Monitoring international developments on raw material • 4402: Wood charcoal (including shell or nut charcoal),
trade will be of crucial importance. China’s flourishing whether or not agglomerated;
economy, coupled with policy constraints limiting • 4404: Hoopwood; split poles; piles, pickets and stakes of
domestic forest production (due to a logging ban), has wood, pointed but not sawn lengthwise; wooden sticks,
resulted in skyrocketing forest product imports over the roughly trimmed but not turned, bent or otherwise
last several years. China’s log imports (H.S. code 4403) worked, suitable for the manufacture of walking sticks,
for 2017 were about 45 million tons, about five percent umbrellas, tool handles or the like; chipwood;
higher than the 43 million tons in 2016. Exports of logs • 4419: Tableware and kitchenware, of wood.
from the EU to China have soared in the last 10 years: in The rationale behind this is that the EESC thinks that all
2007 they amounted to 700 000 tonnes, while in 2017 they wood entering Europe should be certified as a matter of
surpassed 3.3 million tonnes (source: Eurostat). principle.
Wood mobilisation will be recognised as one of the most European R&D funds should be harnessed to support new
significant challenges facing the forestry sector over the and innovative applications of hardwood species, with
coming decade. It is a matter of realising expected increases simultaneous intense activities to ensure an abundant
in wood supply and meeting rising demands for wood supply of wood in Europe.
resources from all major end users in an efficient and cost- It is necessary to develop new innovations in the sourcing
effective manner. of wood raw materials, while at the same time increasing
Considering that, in most Member States, woodworking carbon storage and substitution in processed wood. Wood
continues to suffer from an undeserved negative image supply can to some extent be increased by afforestation,
which affects its attractiveness and which, to some extent, coppice plantations and plantations of fast-growing trees.
explains the difficulties in hiring and retaining young people Aside from the production of wood, plantations and
as well as skilled workers, appropriate programmes at reafforested areas – e.g. in former industrial and agricultural
EU and national levels should be encouraged in order to zones – offer the opportunity for effective carbon
improve the attractiveness of the sector to young people. sequestration in the soil they generate.
The development of high quality vocational education A clearly favourable trend in raw materials policy is CoC
and lifelong learning programmes should receive financial certification, which makes it possible to track wood from
support from governments. forest to final product. This makes it possible to assess the
Member States and local communities should collaborate sustainability and legal origin of wood products in order to
with the wood industries in order to communicate to society increase their uses.
and to the young generation the importance of forests and The positive climate effect of using wood can be further
forest-based industries while showcasing the correlated enhanced by promoting the use of locally sourced wood.
innovative and sustainable character. The EU Commission is invited to elaborate a study on the
Increasing forests’ capacity to supply more wood – in climate-related, economic and social benefits of using
particular, high quality wood – is a long-term commitment locally sourced harvested wood products. Using sustainable
and as such must be well planned and forests well managed and legally sourced wood should provide competitive
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Photo EOS
advantages for woodworking industries in all public significant contribution to these goals. The woodworking
procurement processes. Wood products are considered to industries can play a significant role in decarbonising the
contribute to the mitigation of carbon dioxide emissions. economy if governments seize the opportunity to use
Harvested wood products (HWP) have value both as a wood products in meeting their policy goals, such as in
form of carbon sequestration and fossil fuel substitution. energy efficient construction and as everyday materials.
There are some ways that forest management can help to • Hybrid construction, where wood construction is
increase carbon storage in harvested wood product pools. combined with concrete and/or steel construction, is also
Emphasising “durable” or “long-lived” wood products, a promising opportunity for the future of Europe. Hybrid
such as lumber used for building construction, can help to construction is particularly common when building large
increase the overall lifespan of the product in use, as well or tall structures, so as to provide extra structural support.
as shifting the mix of products towards those that decay Timber engineered wood products feature heavily in
less in landfills. Although forest management can influence hybrid structures, including cross laminated timber, glued
the species and size of trees available for wood products, laminated timber, laminated veneer lumber, etc
larger-scale policies and markets will largely drive demand
for particular products. In order to facilitate the increased use of wood in residential
• One goal of the European Commission is to help the and non-residential buildings, EU research programmes
construction sector become more competitive, resource- should focus on new applications of the European
efficient and sustainable. Building with wood makes a hardwood species that are currently underutilised.
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6.7. Forestry’s aspects

6.7.1 Progress in the implementation of the EU Forest Strategy – ‘A new EU Forest
Strategy: for forests and the forest sector’
On 7 December 2018, the report ‘progress in the partially to the increased cooperation and coordination
implementation of the EU forest strategy’ was published promoted by the Forest Strategy, both within Europe and
by the European Commission and it concluded that the in international organisations.
strategy has set clear aims and has successfully coordinated • The support to the protection and the sustainable
efforts to achieve them. management of forests provides a valuable potential
• The EU forest strategy 2014-2020 was developed to contribution to the EU’s green economy. In 2015, the
provide a coherent framework for both EU forest-related extended value chains of the forest-based industries
policies and the national forestry policies of the individual supported 3.6 million jobs and produced a turnover of
EU countries. It was developed by the EU Commission in €640 billion with an added value of €200 billion. Innovation
close cooperation with EU countries and stakeholders. is fostering more and more new forest-based products
The Report has been prepared by DG AGRI (European and uses able to replace fossil-based materials for the
Commission — Directorate-General for Agriculture and benefits of climate and human health. The report shows
Rural Development) after an information collection made that the strategy has supported this process through the
by the European Forest Institute (EFI) in collaboration with sustainable and efficient use of forest resources and the
stakeholders -including EOS- and Member States. development of the bioeconomy, including bioenergy.
• A key role has also been played by the EU rural development
THE REPORT IN A NUTSHELL policy under the Common Agricultural Policy, which has
The midterm review highlights that the EU forest strategy provided €8.2 billion in public funds towards achieving
is achieving its aims of encouraging sustainable forest the objectives and priorities of the strategy. Furthermore,
management both in the EU and globally. Rural development the EU rural development funds have been coordinated
funds can support the implementation of sustainable forest with an increased spending on research and innovation.
management by the Member States. It concludes that the Research funding for the forest sector has also increased
strategy has set clear aims and has successfully coordinated significantly. In 2013-2017, 249 projects received €615
efforts to achieve them. million benefitting jobs and growth.
• Set up in 2013 to coordinate the European Union’s
response to the challenges that are faced by our forests THE COUNCIL CONCLUSIONS
and the forest sector, the Forest Strategy sets out specific On 15 April, the European Council adopted a set of
actions to achieve eight key priorities. The report shows conclusions on the progress achieved in the implementation
that the majority of the actions, across all 8 priority areas, of the EU Forest Strategy and on a new strategic framework
have been implemented as envisaged. for forests. The conclusions follow the publication of a
• By encouraging and promoting the sustainable Commission report in December 2018, which reviewed the
management of forests and their multifunctional role, the role played by the strategy in its first five years of life.
strategy helps to fight deforestation, to reduce greenhouse In its conclusions, the Council welcomes the progress
gas emissions in the atmosphere by sequestering carbon, made in the implementation of the EU Forest Strategy,
to enhance resilience of ecosystems to a fast changing which has contributed to the promotion of sustainable
climate and to protect and preserve biodiversity and development through sustainable forest management, and
other ecosystem services. improved the cooperation between member states, the
• These positive effects are felt both in the European Commission and other relevant stakeholders on EU forest-
Union and abroad. The report has shown that EU efforts related policies. The Council underscores the importance
to reduce illegal logging globally, under the Forest Law of forests and the forest-based sector for meeting the
Enforcement, Governance and Trade Action Plan, have Sustainable Development Goals (SDGs), for rural, peri-
been substantially more effective in 2015-2017 due urban and urban livelihoods and welfare, growth and
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jobs, nature and biodiversity conservation, mitigation and Council Priorities for 2019-2020
adaptation to climate change, to combating desertification, • making full use of all the financial tools, in particular the
the provision of key ecosystem services to European society rural development forestry measures under the Common
and the necessary transition to a low-carbon bioeconomy. Agricultural Policy and state aid;
It highlights as well the need to further promote research, • contributing further to mainstreaming EU biodiversity
innovation and the deployment of technologies in forests objectives in a coherent manner;
and the forest-based sector and to strengthen skills through • further integrating nature conservation into SFM;
academic and vocational education • enhancing communication and awareness of the value
The conclusions then set out the priorities to be followed and importance of forests and SFM by addressing major
in the next two years in order to achieve the objectives societal and environmental challenges as a contribution
of the strategy, such as further improving coordination, to the integrated implementation of the 2030 Agenda for
communication and the sharing of best practices. Sustainable Development;
Finally, the Council calls on the Commission to present an • continuing to encourage the use of wood from
ambitious communication on stepping up the EU action sustainably managed forests, as an environmentally
against deforestation and to develop a new EU forest friendly raw material for multiple purposes;
strategy beyond 2020. • promoting the key role of forests in line with the Paris
Agreement.
6.7.2 Conference “Our Forest Conference, our Future”
On 25-26 April, the EOS Secretariat attended the conference Commissioner for climate action and energy, Ioan
titled “Our Forest Conference, our Future” organised by Deneş, Romanian Minister for water and forests, and high
the European Commission in order to analyse and discuss representatives of the private sector, academia, civil society,
opportunities and challenges for enhancing the contribution and non-governmental organisations. On behalf of the
of the forest sector to the main EU priorities. Council, Mr Denes recalled that a new Forestry policy after
High-level speakers included Phil Hogan, Commissioner 2020 should be undertaken by the EU Commission.
for agriculture and rural development, Arias Cañete,
Photo: EOS
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The event was ended with a “planting trees” ceremony at (CAP). Under their future CAP Strategic Plans, Member States
the “Parc du Cinquantenaire”, in Brussels. This ceremony will have the option to reward farmers with payments per
was attended as well by Felix Finkbeiner, who at the age farm for the afforestation of one hectare. This afforestation
of 9, launched the children and youth initiative “Plant-for- should be done in a biodiversity-friendly way, contributing
the-Planet” in 2007. At the second day of the European to climate and environmental objectives. This initiative
Commission’s conference ‘Our Forests, Our Future’, can be programmed through Rural Development funding
Commissioner Hogan announced as well, the possibility and could help Member States to meet their climate and
of a ‘Trees for Kids’ scheme to provide solutions to reach biodiversity objectives. Such an initiative could significantly
national and European objectives in line with our post-2020 contribute to the creation of valuable ecosystem services,
Common Agricultural Policy proposals. The scheme would such as water retention and flood and soil erosion control. It
target support to planting of trees by schoolchildren. would also provide significant biodiversity benefits, such as
shelter and connectivity.
During conference, it was recalled that the forest sector has As recalled during this event -despite the worrying global
indeed the potential to provide sustainable solutions to picture, forests have been expanding in the EU and currently
current and future societal challenges that concern all EU cover 43% of the EU’s land area. Forests play an increasingly
citizens, such as combating climate change, reducing the important role in multiple policy priorities:
reliance on fossil fuels, promoting the circular bio-economy, • strong mitigation effect on climate change;
protecting biodiversity, and enhancing natural resources. • huge potential in shaping the new bio-economy;
It was also recalled -by the moderator of the event that - • protective role in our environment;
when exposed to fire, wood retains its strength longer • forests are home to an unaccountable number of species
than steel. and habitats;
Commissioner Hogan, stressed the importance and • vital source of income for rural communities.
potential of forests, wood and other materials for the
bio-economy. He stated that “wood should replace The review of the EU Forest Strategy identified this
fossil fuel-based products”. communication gap, showing a growing mismatch
During the conference, Commissioner Hogan announced as in the perception of forests by experts and by society.
well the proposal of a “1 hectare initiative”, which would Commissioner Hogan stated that “there is a clear need to
be supported through the common agricultural policy communicate to 21st century urban dwellers about the
Photo: EOS
160
role and value of forests and the importance of managing When we talk about Sustainable Development Goal 15 - Life
them to address many of the challenges we are facing on Earth - and our target to manage forests sustainably by
today. Planting trees, creating and restoring forests: these 2030, we are not just talking about a stand-alone goal. We
things are crucial for our climate and a more sustainable are also talking about food security, water, climate change
management of our natural resources, but also for raising and strengthening resilience and peace. Ultimately, we are
awareness”. talking about whether we can build a more sustainable and
inclusive world for all by 2030. This is why forests need to
The EU Commission informed that the “Communication be front and centre of our objectives in the 2030 Agenda,
on Stepping up EU Action on Deforestation and Forest the European Consensus on Development, and the Paris
Degradation” is expected later this year. The EUTR and Agreement on Climate. The European Union is taking
FLEGT are particularly relevant to broader work on other forward this vision in our relationship with partner countries
agricultural products that have effects on deforestation, in different ways. Between 2014 and 2020, we committed
as the EUTR is almost a pioneer experience in this regard. more than 500 million to support forests in developing
Improving forest governance has been recognised as a countries.There is no one-size-fits-all: Deforestation and
key tool for tackling illegal logging and deforestation. In sustainable forest management is a complex challenge, and
particular, the following actions should be further enhanced: solutions need to be specific to each country and region”.
• enhance inclusive stakeholder dialogue, and empower
communities to exercise rights to resources; One of the speaker, Mr Peter Holmgren (Former Director-
• support country-level planning, including cross-sectoral General of CIFOR (climate smart forestry: synergies
land use planning, which involves forestry, agriculture, between mitigation and adaptation. FutureVistas –
and other land uses that drive deforestation; CEO) emphasised that locking up carbon is the only role
• strengthen the enabling environment for sustainable given to forests in the Paris Agreement (as per Article 5).
investment through incentives to small and medium Previously, in the IPCC 1st Assessment Report 1990 “Primary
businesses to improve market access. recommendation on forests”, the role of wood products
(including the substituting effect) in climate change
Commissioner Cañete, recalled that in November 2018 mitigation, was positively recognised. He stressed that:
the EU Commission published a Strategy “A Clean Planet • Carbon capture of forests is SEVERAL TIMES bigger than
for All”. The Strategy outlines a vision of the economic and our fossil emissions.
societal transformations required, engaging all sectors of • Active forest management dramatically INCREASE carbon
the economy and society, to achieve the transition to a capture.
climate neutral economy by 2050. It seeks to ensure that • PROVIDED it makes economic sense and is not
this transition is socially fair, securing high quality jobs and ideologically blocked.
sustainable growth in Europe. The European Commissioner • IN ADDITION harvested wood gives further climate
repeatedly stressed the importance of supporting the forest benefits.
sector to effectively manage forests as a tool for ecological • REPLACING fossil materials and energy.
transition. “To achieve the transition to climate-neutrality, The Paris Agreement ignores all of the above and this is a
our forests will help us – but we will need to help our gigantic missed opportunity.
forests, and the people working with our forests, to tackle
the challenges ahead. Forests hold the answers to some Dr. Adrian Enache explained that the EIB (European
of today’s global challenges. They are key to fight climate Investment Bank) activities support the full forest value chain
change by absorbing greenhouse gas emissions. They including afforestation, reforestation, forest rehabilitation
are home to 80% of our planet’s biodiversity. They supply and protection, wood processing, timberland funds, and
three quarters of our freshwater. They provide sustenance REDD+ (Reducing Emissions from Deforestation and Forest
and jobs: 1.6 billion people – a quarter of the world’s Degradation). EIB support the EU Forestry Strategy and
population – depend directly on forests for their livelihoods. the EU Forest Action Plan, which frame EU forestry policy,
And they are an important part of our cultural, social and and the Timber Regulation and Forest Law Enforcement,
spiritual heritage. So when it comes to delivering on our Governance and Trade Initiative for tackling illegal logging
international commitments, forests are part of the solution. and improving traceability.
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Within the EIB Priorities, the following were mentioned: Alistair Monument (WWF) stressed the need of protect
• Climate and Environment (Climate Action: mitigation/ and restore nature by 2030 for the benefit of people and the
adaptation) planet. In the past years WWF has contributed to achieve
- Paris Agreement (UNFCCC), REDD+, EU FLEGT, SFM the following objectives:
(Forest Europe process), EUTR, Forest Certification (e.g. • 50% of the world’s forests are effectively protected or
FSC/PEFC) under improved management.
• Innovation and Skills (RDI) • Halting deforestation.
• SMEs • Restoring 350 million hectares of forest landscapes.
The EIB-financed forestry projects are targeting: Finally, WWF stressed the need for a balanced approach to
• Improved forest and watershed management and flood management of forests that equally considers economic,
control: social and environmental aspects. WWF called to a better
- afforestation, forest rehabilitation, erosion control, coordination and cooperation between government
forest fire prevention/mitigation and implementation agencies working on forestry and nature protection to
of RDPs integrate management planning.
• Restoration after major natural hazards All presentations given during the conference are available
- earthquakes, flooding, sleet, forest-fires, wind-throws at the following link:
• Support sustainable renewable wood-based materials https://ec.europa.eu/info/events/forestry-conference-
production: 2019-apr-25_en
- Primary and secondary processing, renewable energy
and energy efficiency (upgrading industrial facilities),
biomass/CHP plants.
6.7.3 Sustainable Forest Products for a Better Future

The European Organisation of the Sawmill Industry
attended the Committee on Forests and Forest Industry
(COFFI), of the United Nations Economic Commission for
Europe (UNECE) held between 5-9 November in Vancouver.
On this occasion, participants - including EOS - approved
a joint document so-called Vancouver Invitation on
Sustainable Forest Products for a Better Future. This
is a statement of intent to create a larger community of
like-minded stakeholders in support of sustainable forest
products as a key element of a green economy and to
achieve relevant Sustainable Development Goals (SDGs –
see below for more information on the SDGs).
The United Nation’s Agenda 2030 has identified 17

Sustainable Development Goals (SDGs) to pursue over
the coming decades in order to make the world a better intensive building materials (SDG 13—Climate Action), to
place. As one of the largest terrestrial habitats, forests and the invigoration of rural economies and communities in
their sustainable management can have a positive impact forested areas (SDG 8—Decent Work and Economic Growth),
on most, if not all of the SDGs. Wood and wood-based to the provision of renewable energy (SDG 7—Affordable
products obtained from timber harvested in sustainably and Clean Energy) and to the overarching goal of equality
managed forests can also provide substantial benefits. (SDG 5—Gender Equality).
These range from reductions in atmospheric carbon from In a nutshell, reported the key elments of the Vancouver
the substitution of renewable wood for more carbon Invitation:
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• Wood products obtained from timber harvested in • Identify appropriate initiatives that can assist in
sustainably managed forests can also provide substantial attracting investment in forests, timber processing and
benefits. manufacturing sectors
• Communicate to the society at large, and younger • Undertake actions to ensure a steady supply of sustainably
generations in particular, the importance of the forestry sourced raw materials to the sector, balanced with social
and forest-based industries, while showcasing their and environmental considerations.
innovative and sustainable character. • Foster the implementation of policy measures to
• Undertake actions to improve attractiveness of the sector encourage use of wood as a building material to help
to tackle widespread workforce aging and loss of skills. tackle climate change through increased carbon storage.
• Recognize and promote the importance of construction
standards that do not unduly discriminate against wood
materials.
6.7.4 Public consultation on the EUTR Product Scope

A public consultation on the EUTR Product Scope was sticks, roughly trimmed but not turned, bent or otherwise
launched on 29 January 2018 until 24 April 2018. Any worked, suitable for the manufacture of walking sticks,
interested party, including operators (as defined under umbrellas, tool handles or the like; chipwood;
the EUTR), Traders (as defined under the EUTR), other • 4419: Tableware and kitchenware, of wood.
businesses potentially concerned with a changed product
scope, affected industry and/or trade associations, Results from the Public Consultation on the Product
Member States’ EUTR Competent Authorities, Monitoring Scope of the EU Timber Regulation
Organisations under the EUTR, Civil society organisations, 221 individuals and organisations responded to the
non-EU timber-producing countries, general public have European Commission’s public consultation on the product
been invited to take part in the consultation. scope of the EU Timber Regulation (EUTR).
Coming from a range of public and private sectors, they
Objective of the consultation identified as:
Following the evaluation of the effectiveness and functioning • 63 – Trade and Industry Associations
of the EUTR during its first two years of application, it • 49 – Civil Society Organisations
was noted that the EUTR covers a significant number of • 30 – Operators
timber products, but not all are included in its scope. The • 22 – Competent Authority or Public Authority
evaluation concluded that the European Commission may • 21 – Traders
consider amending the product scope, subject to an impact • 23 – Other businesses and organisations
assessment of options. The European Commission had
therefore undertaking an impact assessment to analyse The survey shows those responding as broadly in favour
possible changes to the EUTR product scope. As part of this of expanding the scope of the EUTR to products currently
impact assessment process and in line with the European excluded, particularly all printed material and ending the
Commission’s Better Regulation Guidelines, an extensive disparity between chairs and other wooden furniture.
consultation of stakeholders was carried out. The main aim Overwhelmingly, responders do not think the EUTR in its
of the public consultation is to gather views and evidence current scope is adequate for meeting the aims of the EUTR
on possible changes to the EUTR product scope. – namely, fighting illegal logging and the related trade.
EOS Secretariat submited its response to the consultation, Asked why they believed the product scope needed to be
asking that the following products categories are included changed comments focused on the need to end loopholes
in the EUTR. and create an even playing field. The EUTR should aim for
• 4402: Wood charcoal (including shell or nut charcoal), the ‘simplest and easy to understand system’. EU based
whether or not agglomerated; printers said they were being undercut by paper produced
• 4404: Hoopwood; split poles; piles, pickets and stakes elsewhere, they wanted a level playing field for domestic
of wood, pointed but not sawn lengthwise; wooden producers and companies importing from 3rd countries.
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In the picture “Eye of the Dolomites”, Plose, Italy
And last but not least, the limits to the product scope is With this letter, the European forest-based industries are
preventing the EUTR from reaching its core objective of calling on:
countering illegal timber. If any timber product is reaching • the extension of the scope of the EU Timber Regulation to
the EU market despite being made from illegally logged ensure that wood-based products sold on the European
timber, due to it not being covered by the EUTR, then this market are safe from illegal logging regardless of their
clear loophole must be closed. origin;
• the inclusion under the scope of the EUTR regulation tree
Others also emphasized the need to implement other like products, such as bamboo, whose illegal sourcing and
reforms along with the product scope expansion. extraction is causing deforestation and environmental
Suggestions included support for trans-border action degradation;
with confiscation ability, harmonisation of enforcement • a coordinated and more consistent enforcement of the
procedures across member states and better education of EU Timber Regulation.
authorities.
The open letter was sent on Friday and it will be addressed
In the framework of the amending process of EU Timber to Ms Elżbieta Bieńkowska, European Commissioner for
Regulation (Regulation (EU) No 995/2010) (EUTR) initiated Internal Market, Industry, Entrepreneurship and SMEs, Mr
by the EU Commission a joint letter has been prepared by Karmenu Vella, European Commissioner for Environment,
the Brussels based organisations representing the forest- Maritime Affairs and Fisheries and Ms Cecilia Malmström,
based industries. European Commissioner for Trade.
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Ms. Elżbieta Bieńkowska

European Commissioner for Internal Market,
Industry, Entrepreneurship and SMEs
Mr. Karmenu Vella
European Commissioner for Environment, Maritime
Affairs and Fisheries
Ms. Cecilia Malmström
European Commissioner for Trade
Brussels, 20 July 2018
Open letter to the European Commission:
European forest-based industries call on the extension of the scope of the EU Timber
Regulation to ensure that wood-based products sold on the European market are safe
from illegal logging regardless of their origin.
Dear Commissioners,
The EU Timber Regulation (995/2010/EU) is one of the key measures of the European Union
to combat illegal logging. It aims to prevent wood and wood-based products that derive from
illegally logged forests to enter the European market.
Wood and a large part of wood-based products are already covered by the Regulation. The
European forest-based industries, as operators or traders under the Regulation, have
already put in place the required due diligence systems for the wood or wood-based products
that they are placing on the European market.
Regrettably, several wood-based products are not yet in the scope of the Regulation. Millions
of euros worth of wood-based products are therefore still entering the European market
without any assurance on their legality.
This not only creates a significant environmental loophole in the Regulation but it also
distorts competition between wood-based products produced in the European Union with
compliant raw material and wood-based products produced outside the European Union
which can be freely imported and placed on the European market regardless of the origin of
the raw material.
The EU Timber Regulation helps to secure legal sourcing of products sold on the European
market. Illegal logging blemishes the reputation of the forest-based industries and the image
of wood-based products. It is not acceptable that the reputation of European companies is
tarnished because of illegally sourced imported products put on the European market.
Moreover, it is important that European consumers can trust that any wood-based products
found on the European market have been sourced legally.
The European Union should ensure that wood-based products on the European market are
safe from illegal logging regardless of their origin. We therefore call on the European
Commission to revise without further delay the scope of the EU Timber Regulation and
extend it to wood-based products, such as printed matter, which are so far not covered.
Additionally, we invite the European Commission to include under the scope of the EUTR
regulation tree like products, such as bamboo, whose illegal sourcing and extraction is
causing deforestation and environmental degradation.
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Furthermore, the European Commission should coordinate more consistent enforcement of

the EU Timber Regulation.
We thank you for your consideration and remain at your disposal for further discussions on
this matter with you or your respective services.
Yours sincerely,
Beatrice Klose
Secretary General
INTERGRAF – European Federation for Print and Digital Communication
Silvia Melegari
Secretary General
EOS - European Organization of the Sawmill Industry
Clive Pinnington
Managing Director
EPF – European Panel Federation
Sylvain Lhôte
Director General
CEPI – Confederation of European Paper Industries
Isabelle Brose
Managing Director
FEP – European Federation of the Parquet Industry
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Patrizio Antonicoli
Secretary General
CEI-Bois
Piotr Borkowski
Executive Director
Eustafor
Roberta Dessi
Secretary General
EFIC
© Shutterstock
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6.7.5 Illegal Logging & Trade
The European Commission (EC) launched a public deforestation and forest degradation throughout relevant
consultation on deforestation and forest degradation EU policies.
(January 2019). The consultation took place between Feedback received will be taken into account for further
14 January and 25 February 2019, with individuals and development and fine tuning of the initiative. The
organisations with an interest in deforestation and forest Commission will summarise the input received in a synopsis
degradation invited to complete the online questionnaire. report explaining how the input will be taken on board and,
The consultation aims to address the link between if applicable, why certain suggestions can’t be taken up.
deforestation and agricultural expansion, acknowledging
that as a major importer of agricultural commodities,
New Ukrainian law to prevent illegal logging
the EU is part of the problem but is well placed to help comes into force (January 2019). The new law “on
address the issue. The overall aim is to step-up EU action by amendments to certain legislative acts of Ukraine on
increasing the coherence of existing EU policies and tools, the preservation of Ukrainian forests and preventing
taking advantage of synergies across policy areas and better the illegal export of raw timber” came into force on 1
mainstreaming deforestation considerations throughout January 2019, aimed to ensure better forest governance
relevant EU policies. and minimise illegal logging. The punishment for
According to the FAO report “State of the World’s Forests illegally exporting restricted timber or timber products
2016” agricultural expansion for the production of has been set at 3-5 years imprisonment, with longer
commodities (e.g. soy, beef, palm oil, coffee, cocoa) drives sentences for repeat offenders or those committed
about 80% of all deforestation specifically in tropical by an organised group or on a particularly large scale.
The fines and prison terms imposed for illegal felling
countries, while mining, urbanisation and infrastructure are
have also increased. The law amends the Code of
responsible for less than 10% each.
Ukraine on Administrative Offenses, the Criminal Code
of Ukraine and the law “on the peculiarities of state
In order to set up effective measures, the EU Commission is
regulation for activity of business entities related to
evaluating the following actions: the sale and export of timber”.
• Build effective partnerships with producer countries in
the tropical domain to support the uptake of sustainable
agricultural and forestry practices, including afforestation, An article on How Illegally Harvested Timber Is
by both local communities and foreign investors, reduce ‘Greenwashed’ in China was published last January 2019.
pressure on forests, improve land governance and The report by Sixth Tone, an online publication providing
promote better conservation and management of tropical coverage on China, has expressed concern over what it
forests as well as alternatives livelihoods. terms ‘greenwashing’, whereby illegal timber is given false
• Promote sustainable and transparent supply chains for certification status to avoid scrutiny and enter restricted
sustainably produced commodities and sustainable markets. In 2018, Sixth Tone conducted an investigation that
provision of related services. identified seven Chinese companies manufacturing wood
• Facilitate improved access, particularly by smallholders, products for export to Europe with fraudulent FSC logos and
to public and private investment and financial support, certification, despite them acknowledging that their goods
including through public-private partnerships, for do not meet FSC standards. The risk of being caught was
sustainable value chains and sustainable landscapes. reportedly considered negligible, due to inadequate checks
Achieve enhanced transparency of investment flows by buyers and regulators of the authenticity of certification.
associated with deforestation, forest degradation, illegal It is believed that European importers are aware of the
logging and illegal land acquisition. fraudulent activity.
• Strengthen international cooperation with other
major consumer countries to ensure responsible and The article states that “As the world’s manufacturing hub,
sustainable supply chains at the global level and reduce China is the biggest importer and consumer of wood
the risk of ‘leakages’. products. Over 60 percent of tropical logs on the global
• Better mainstream considerations to prevent tropical market are imported to China. Much tropical wood comes
168
from species which environmentalists consider at high The Report by Sixth Tone is available here: http://www.
risk for being logged illegally: Assessments by the United sixthtone.com/news/1003369/how-illegally-harvested-
Nations Environment Program and Interpol suggest that timber-is-greenwashed-in-china?from=timeline&isappinsta
15 to 30 percent of timber traded globally has been illegally lled=0
harvested — in tropical countries, this proportion could be
as high as 50 to 90 percent.”
6.7.6 Forest Europe

Since November 2017, the European Organization of the
Sawmill Industry obtained the status of observer in Forest
Europe. FOREST EUROPE (the brand name of the Ministerial
Conference on the Protection of Forests in Europe) is the pan-
European voluntary high-level political process for dialogue
and cooperation on forest policies in Europe. FOREST
EUROPE develops common strategies for its 47 signatories
(46 European countries and the European Union) on how
to protect and sustainably manage their forests. Since 1990,
the collaboration of the ministers responsible for forests in
Europe has had a great economic, environmental and social
impact on the national and international level. FOREST
EUROPE has led to achievements such as the guidelines,
criteria and indicators for sustainable forest management.
6.7.4.1 Workshop on “Enhancing the Long-term

Competitiveness of the Forest Sector in a Green
Economy: policies for forest-based bioeconomy
in Europe”
On 29 May 2018, the European Organisation of the Sawmill
Industry was invited to speak at the workshop on “Enhancing
the Long-term Competitiveness of the Forest Sector in a
Green Economy: policies for forest-based bioeconomy in increasing economic viability and competitiveness of the
Europe”. forest-based sector.
Objectives and the goal of the workshop. The workshop discussed the long-term competitiveness of
In order to promote long-term competitiveness and viability the forest sector value chains that contribute to sustainability
of the whole forest sector and its contribution to the overall of the overall economy, especially highlighting the role
Green Economy, the workshop was aimed at: of wood and other forest-based products and materials
1. exchanging views on future policy making and from sustainable sources. The workshop addressed the
governance to support development of a forest-based competitiveness mainly at sectoral level as an ability of
bioeconomy in European sub-regions; the European forest sector to compete with other sectors
2. discussing drivers and barriers for long-term economic in Europe as well as at global market. However, as the
viability and competitiveness of forestry and forest- competitiveness of firms, sectors and whole economies are
based industries, which provide a sound basis for the closely interrelated it has not been entirely possible to draw
bioeconomy, to enable relevant and effective policy a clear borderline between these different levels and focus
response; solely at sectoral level. Issues of forest ecosystem services
3. identify possible topics for intergovernmental cooperation (though they are important for the competitiveness of the
at pan-European level focused at maintaining and primary producers, whole forest sector and a coherent
169
part of the forest-based bioeconomy) were excluded from climate change impacts and to adapt forest structure
the overall thematic scope of the workshop as this area and management as well as to adapt forest industry to
is tackled in its complexity under another activity of the changing quantity and quality of the European wood
FOREST EUROPE Work Programme. supply.
The Report is available here: https://foresteurope.org/wp-
Extract of the Workshop conclusions content/uploads/2017/08/Workshop-report_final-1.pdf
• Coherent and stable policy framework as well as
coordination across different levels, sectors, policies and 6.7.5.2 Roundtable Meeting on a Legally Binding
actors is needed to facilitate the basis for developing the Agreement (LBA) on Forests in Europe on 19-20
forest-based bioeconomy. September 2018 in Bratislava, Slovakia.
• Intergovernmental cooperation on the forestbased On 19-20 September, EOS attended the Roundtable
bioeconomy should be facilitated (possibly creating a Meeting on a Legally Binding Agreement (LBA) on Forests
kind of (pan-)European “bioeconomy hub”). Potential in Europe on 19-20 September 2018 held in Bratislava. This
of the existing institutions and processes, such as Forest meeting was organised in order to facilitate an exchange of
Europe, should be considered for this purpose to build views among FOREST EUROPE signatories and observers
on established cooperation, developed relationships regarding the Madrid Extraordinary Ministerial Decision, the
and trust (incl. public and private forest actors) as well RTM meeting will serve as a platform for informal discussion
as to take into account the criteria and indicators for on a possible LBA and procedural options to follow-up of
Sustainable Forest Management developed at the pan- the Madrid Extraordinary Ministerial Decision. Discussion
European level. should focus on general perceptions, benefits and impacts
• Participatory approach to intergovernmental cooperation of LBA as well as other related general aspects to be
should be maintained to provide a platform for sharing addressed, such as barriers and preconditions to restart
experiences across borders and regions. possible negotiations on and adoption of LBA.
• To eliminate distortions at the market (beyond the
sector), policy making should aim at maintaining stable EOS Message
and predictable operational environment as well as The European Organisation of the Sawmill Industry
setting equal conditions for all the sectors – e. g. set welcomes the commitment undertaken by the FOREST
appropriate price of carbon emissions equal for all the EUROPE signatories to discuss about a legally binding
sectors (including plastic and petrochemical sectors) and agreement of forests.
develop other standards needed to create level playing It is well recognised that the forest sector plays an important
field for the bioeconomy. Creating such a level playing role in the development of a green economy and in the
field should be superior to subsidies in order to encourage climate change mitigation due to the carbon storage of
long-term healthy competition and innovation. wood products and the substitution of non-renewable
• To promote wood as building material, appropriate materials and energy. In this respect, EOS believes that
common European standardisation on fire protection, the legally binding agreement on forests should be a tool
water protection, and sound insulation for wooden for balancing forest protection and production. Scaling
constructions should be developed. New public buildings up sustainable forest management and replacing energy
built from wood can encourage and rise trust in wooden intensive products with forest-based products, it is the
construction, especially in those areas without long-term most efficient way to mitigate climate change and to build a
tradition of building with wood. sustainable green economy.
• From the market view, the sector should look for where Forests are affected by climate change and they need
the consumption will be in the future (which products to adapt to it. The main challenge related to the legally
and which regions of global market), e.g. growing middle- binding agreement consists in balancing between the
class at the global level can significantly influence these various forest functions and enabling the forest sector to
developments. make the largest possible contribution to tackle climate
• Sustainable supply of wood and the development of the change, while maintaining the best possible combination of
bioeconomy depend on healthy, dynamic and resilient the other forest functions. However, it is imperative to avoid
forest ecosystems. It is therefore necessary to anticipate legally binding solutions which unduly favour one forest
170
function (such as carbon sequestration) over all the others. parts of the world have chosen to use both PEFC and FSC
Afforestation measures should not therefore privilege some certification for their forest management units to prove their
forests functions over others: tree species with a proven sustainable forest management practices. But the presence
commercial value must not be neglected. EOS calls for of two partially overlapping systems creates a cumbersome
reliable data gathered across the whole value chain as the situation which significantly increases bureaucracy for all
basis of any decisions related to afforestation. stakeholders across the value chain; the confusion created
The legally binding agreement on forests should favour by the present system might even endanger what should
the long-term development of the forest-based industries be the main aim of certification, that is the wellbeing of
and overall simplify the regulatory framework in order forests. Therefore, the legally binding agreement on forests
to combine solutions to mitigate the environmental should create the basis for the unification of the certification
impact of forests utilisation with measures to promote the systems in order to provide consistent and reliable
development of the forestry community. information on the origin of timber and on the quality of
Over the last decade a range of initiatives have set up forest management.
different private verification systems aiming at assuring Establishing a single method will enable producers to
over the quality of forest management. The share of forests manage their traceability systems in an efficient and
certified is distributed highly unevenly. 20% of the forest transparent way, providing reliable and trustworthy
area in the ECE region is certified for sustainable forest information on the environmental and social integrity of
management, whereas only 3% of forests are certified wood products. At the same time, it will reduce costs for
outside Europe, North America and Russia. In particular, forest owners without lowering the quality of sustainable
63% of European forests are certificated, 36% of North forest management.
American ones are certified, while everywhere else certified The success of this process for defying a legally binding
forests make up way below than 10% of total forests. In July agreement on forests depends on the forest sector and
2017, more than 69 million hectares (or 16%) of all certified Member States articulating solutions with a united voice.
forests globally were double certified to both PEFC and FSC. EOS expressed gratitude to the signatories of Forest Europe
Double certification exists because foresters in different for having had the opportunities to present its view.
© Shutterstock
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6.8 The forest city project 2019

On 21 March 2019, the European Sawmill Organisation At this March event, Michael Proschek-Hauptmann, Head
celebrated the International Forest Day by co-hosting a of Compliance and Sustainability, Schweighofer Group
high level discussion where representatives of the industry gave a presentation on the role of wood products as a
and of green interests confirmed their commitment to climate change mitigation solution. He recalled as well that
identifying solutions for a sustainable and environmentally “sustainability in forests means equal emphasis on the social,
friendly economic growth. environmental and economic aspects. Through Sustainable
With a new European Parliament and European Commission Forect Management (SFM) it is possible to maintain forest
coming into office in 2019, the event aimed at ensuring that ecosystem health and vitality while preserving biodiversity”.
forests and sustainable wood products are valued for their The EOS Member, Mr Proschek-Hauptmann, was kindly
role in climate change mitigation. requested to take part in the debate due to his knowledge
about sustainability aspects in forestry related issues.
➡ The theme of 2019 “Forest City Project” is “The Role of Mr Proschek-Hauptmann recalled that while you may not
Forests in Advancing EU Climate Action”. Participants connect healthy forests with selling wood, they are actually
in the 2019 edition were invited to share support to the intimately connected. Landowners need income to pay
use of wood as a climate friendly material using the ongoing costs for forest management activities such as
shorthand reference: #Wood4Climate maintaining roads and clearing out invasive species, as well
as to cover annual property taxes. Income from woods can
As recognized by the Paris Agreement, sustainably managed help with this and encourage landowners to invest in forest
forests play a central role in climate change mitigation and sustainable forest management. Markets for wood products
adaptation. Trees offer manifold environmental benefits: aren’t just important for landowners, they are important for
from the sequestering and storing of carbon, to stabilizing keeping employment in rural communities.
soil to prevent natural hazards and safeguarding provisions
of clean water and air. As a renewable resource, forests are In the framework of the “Forest City Project”, an article was
at the heart of a sustainable bio-based economy. Wood- published in the correlated event’s magazine was prepared
based materials can act as carbon sinks and reduce carbon and it is reproduced in the following pages.
emissions, serving as a substitute for fossil-based materials The article aims at being a tool for urging that forests and
and energy. sustainable wood products are valued for their role in
climate change mitigation.
Panellist included: Hugo Schally, Head of Unit, Multilateral Environmental Co-operation (DG Environment), Hannah Mowat,
Campaigns Coordinator, FERN, Andreas Kleinschmit von Lengefeld, Directeur Innovation Recherche et International at the
“Institut Technologique” and Mr Tapio Kytola from the Finnish Permanent Representation to the EU, who concluded the
debate providing a “take home message” for the next EU Presidency.
172
In view of this specific political momentum (the new • Summarising the role of wood in a climate change
European Parliament and European Commission will be in prospective;
place by the second half of 2019), the purpose of the article • Presenting the Sawmill Industries Blueprint for EU Climate
is twofold: Action on Forests & Wood Products.
173
WOOD PRODUCTS
#Wood4Climate
WRITER: SILVIA MELEGARI
Europe is moving towards better and greater climate action on forests inside and outside the Union – the
manifold forest- and wood-based products will play a pivotal role, if managed more sustainably.
The latest findings of the IPPC Report

are clear: rising temperatures are af-
fecting our climate and consequently
our environment and the functioning of
our world. Our economy is affected as
well. Global warming can be attributed
to two factors, those that occur naturally
and those that may be anthropogenic
(human-activity-induced). Human ac-
tivities are estimated to have caused
approximately 1.0°C of global warming
above pre-industrial levels, with a likely
range of 0.8°C to 1.2°C. Global warming
is likely to reach 1.5°C between 2030
and 2052 if it continues to increase at
the current rate.1
Coherent and holistic solutions are

needed to reduce and remove the
emission of greenhouses gases from
the atmosphere. It is imperative to
combat climate change and at the
same time avoid curbing economic
and social development. Sustainably
managed forests and products derived
from these forests play an essential role
in mitigating climate change by reduc-
ing greenhouse gases emissions and
contribute to an environmental-friendly
economic growth. The positive effects of
using wood from sustainably managed
forests can be strengthened if actions
are taken to use more long-life wood
products.
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Growing trees absorb carbon dioxide energy. Indeed, most of the energy
from the air and convert it to oxygen, comes from converting residual bark
which is then released and stored as and sawdust to electrical and thermal
carbon in their branches, leaves or energy, adding to wood’s light carbon
needles, trunks, roots and surrounding footprint.
soil. When trees start to decay, or when
forests die due to wildfire, insects or
disease, the stored carbon is released Harvested wood products create
back into the atmosphere. In any of
these cases, the carbon cycle begins an opportunity to provide long-
again as the forest is regenerated,
either naturally or by planting. Forests term carbon storage benefits by
managed for timber have an important
role to play in conserving global bio- storing carbon and by substituting
diversity. Scientific studies proved that
unmanaged forests are often suscep- more energy-intensive materials.
tible to disturbances including insect
and disease outbreaks and generate
a much greater carbon debt if they are
combusted during a wildfire, rather than The benefits of wood
a managed forest with much less dead
and dying fuel wood. Increasing the use of wood or wood- 1. Source: Global warming of 1.5°C. An IPCC Special
Report on the impacts of global warming of 1.5°C above
based materials in construction and in pre-industrial levels and related global greenhouse gas
Harvested wood products store carbon products such as furniture, cabinets, emission pathways, in the context of strengthening
the global response to the threat of climate change,
over time depending on the type of flooring, doors and window frames sustainable development, and efforts to eradicate
poverty. Learn more: www.ipcc.ch/
products and how they are used over represents a significant opportunity
2. Wooden building at Camber Sands beach, United
short and long time-scales. Harvested for emission reductions. With grow- Kingdom. Photo: Oliur
wood products create an opportunity ing pressure to reduce the carbon
to provide long-term carbon reduc- footprint in buildings, designers are
tion benefits by storing carbon and increasingly called upon to balance
by substituting more energy-intensive functionality and cost objectives with
materials. Manufacturing wood into reduced environmental impact. Wood
products requires far less energy than is a natural choice. It’s renew-

other materials – and almost no fuel able, recyclable, and has a lighter
SPRING 2019 REVOLVE
175
WOOD PRODUCTS
carbon footprint than other construc- offset two tons of carbon emissions When forest products are used in con-
tion materials. Additionally, it is the for every dry metric ton of wood used. struction, they continue to store carbon
only structural building material with This occurs because we are eliminating for the whole life of the structure and
third-party certification systems in fossil fuel emissions that would have beyond when wood fibre is recycled or
place to verify that products come been released into the air had we used reclaimed. The possibility of re-using
from a sustainably-managed resource. more energy-intensive materials, thus wood products (after one service unit)
European producers use wood com- adding to the net benefit of wood. is another important climate benefit
ing only from sustainably-managed characteristic of this material. Wood
forests to ensure that the wood we use New advances in engineered wood are can be re-used as product either for
minimizes its footprint on local ecology, allowing the construction of tall, safe, the same purpose as before or for
habitats and peoples. and more economical wood buildings. less demanding purposes after simple
Moreover, wood has a higher insulation reshaping, for example from struc-
The need for more urban housing and rating compared to other materials as tural timbers to flooring. Even if wood
the engagement for climate change a result of its natural cellular structure. products after one service unit are not
mitigation imposes building solutions Using wood helps to save energy over the qualified for further use, they can still
with low energy and low carbon foot- life of a building, as its cellular structure be reprocessed for making new wood-
prints. Wood offers us a new way to provides outstanding thermal insulation: based products or be use as a source
think about sustainable buildings. On
average, when we substitute wood for
as per estimations, 15 times better than
concrete, 400 times better than steel
of renewable energy. •
energy-intensive building products, we and 1 770 times better than aluminium.
3. Villa Heokholland, Hook of Holland, Netherlands.

Photo: David Peters
4. Wood cellular structure provides outstanding thermal

insulation: 15 times better than concrete, 400 times
better than steel and 1 770 times better than aluminium.
Photo: Clarisse Meyer
Created in 1958, the European Organisation of the

Sawmill Industry (EOS) is a Brussels-based non-profit
association representing the interests of the European
sawmilling sector on European and International
level. Through its member federations and associated
members, EOS represents some 35.000 sawmills
in 13 countries across Europe (Austria, Belgium,
Croatia, Denmark, Finland, France, Germany, Latvia,
Norway, Romania, Sweden, Switzerland and the
United Kingdom) manufacturing sawn boards, timber
frames, glulam, decking, flooring, joinery, fencing and
several other wood products. Together, they represent
77% of the total European sawn wood output and a
turnover of almost 37 billion EUR with over 259,000 job
opportunities annually in the EU.
www.eos-oes.eu
4
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176
SUSTAINABLE MANAGEMENT
A Blueprint for
EU Climate Action on Forests
& Wood Products
To mitigate climate change, we need to reduce greenhouse gas emissions and store more carbon. Healthy
forests can do both. For this reason, governments and organizations can improve their social responsibility
and reduce their environmental footprint through policies and procurement processes that encourage the
use of wood products coming only from sustainably-managed forests. Wood products, legally-sourced from
sustainably-managed forests, can play a key role in decarbonizing the economy – due to their lower carbon
footprint compared to other materials and the CO2 stored in them – while boosting the circular bioeconomy.
In line with the objectives of the 2015 Paris Agreement, considerations the cross-sectoral effects of wood product
the European Sawmill Industry aims to strengthen climate use and net impacts on the bioeconomy.
change mitigation through European policies that balance
environmental, social and economic aspects. The following • Need to create markets – within and outside Europe – for
list encapsulates the main priorities of the sawmill industry: traditional and innovative new wood products supports
sustainable forestry, helps to counteract greenhouse gas
• A comprehensive and coherent approach to sustain- emissions, and puts the timber industry at the forefront
able forest management for the promotion of healthy of a carbon-free Europe.
forests that absorb more CO2 and produce renewable
wood products will have a large impact in reducing CO2 • Need fora level playing field: products entering the European
emissions. market must comply with the high environmental and social
standards that characterize the European Union.
• Using 98% of logs coming from the European forests,
the sawmill industries have played (and continue to play) • Need to recognize the environmental benefits of using
a crucial role in shaping the landscape, economy, and wood products instead of more energy-intensive materials
culture of the forestry sector in Europe. Ensuring the by assuring that carbon accounting systems are full-life
longevity of forest resources through the implementa- cycle accounting systems.
tion of sustainable forest practices has been always a
concern for sawmill operators. As first transformer of • Need to support performance-based public procure-
forest biomass, the European sawmill industry is the key ment policies for building materials and foster tools to
driver of the forest based bio-economy. Thereupon, in strengthen Green Public Procurement from more public
order to guarantee to the sector a reliable raw material sector entities.
supply is of utmost importance to:
The transition to a low-carbon economy presents significant
o Implement climate policy objectives which do not opportunities and challenges. The European sawmill industry
neglect a sustainable mobilization of wood resources has the potential to boost the economic growth of Europe
with the use of wood products while addressing climate
o Encourage silvicultural practices to enrich the timber change. Enhancing the competitiveness of the European
size and quality sawmill industry and advocating for using more sustainable
wood products contributes to sustainable and environmen-
• Assessing the impact of decisions affecting the use of tally friendly economic growth for Europe.
forest resources should be more coherent and take into
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6.9 Bioeconomy
The European Bioeconomy Strategy and its Action Plan strong innovation potential due to their use of a wide range
emerged in 2012 from the Innovation Union and Resource of sciences, enabling and industrial technologies, along
Efficient Europe flagship initiatives of the EU 2020 strategy, with local and tacit knowledge.” Source: “Innovating for
recognising that the bioeconomy, currently worth EUR Sustainable Growth - A Bioeconomy for Europe” (2012).
2.3 trillion in turnover and accounting for 8.2% of the EU’s Furthermore, the European Commission recognises that a
workforce, plays a central role in addressing a number of strong bioeconomy will help Europe to live within its limits.
key interlinked challenges. The sustainable production and exploitation of biological
The European Commission defines the bioeconomy as resources will allow the production of more from less,
“the production of renewable biological resources and including from waste, while limiting negative impacts on the
the conversion of these resources and waste streams environment and reducing the heavy dependency on fossil
into value added products, such as food, feed, bio-based resources, mitigating climate change and moving Europe
products and bioenergy. Its sectors and industries have towards a post-petroleum society.
6.9.1 Update of the Bioeconomy Strategy
On 11 October 2018, the EU Commission published the Bioeconomy Thematic Investment Platform - to de-risk
update of the Bioeconomy Strategy aiming at accelerating private investments in sustainable solutions.
the deployment of a sustainable European bioeconomy so
as to maximise its contribution towards the 2030 Agenda FOCUS ON FORESTRY & WOOD PRODUCTS
and its Sustainable Development Goals (SDGs), as well as INTRODUCTION
the Paris Agreement.
The new Commission’s document responds to the main A sustainable European bioeconomy is necessary to
challenge to achieve sustainability while modernise build a carbon neutral future in line with the Climate
industries and reinforce Europe’s position in a highly objectives of the Paris Agreement.
competitive global economy, thus ensuring the prosperity
of its citizens. Maximising the impact of EU Research and Delivering a sustainable circular bioeconomy requires efforts
Innovation is key in this respect. by public authorities and industry. To drive this collective
For this reason, for the next Multiannual Financial Framework effort, and based on three key objectives, the Commission
for 2021-27 the EU Commission intends to give a significant will launch 14 concrete measures in 2019, including:
boost for systemic research and innovation in the areas
and sectors covered by the bioeconomy, in particular with 1. Scaling up and strengthening the bio-based sectors
EUR 10 billion foreseen for the Horizon Europe cluster for • establish a e100 million Circular Bioeconomy
“Food and Natural Resources”. In addition to research and Thematic Investment Platform to bring bio-based
innovation grants under Horizon 2020, the EU will deploy a innovations closer to the market and de-risk private
targeted financial instrument - the EUR 100 million Circular investments in sustainable solutions;
POSITIVE ACKNOWLEDGEMENT: KEY ROLE OF WOOD PRODUCTS

In terms of its environmental benefits, the bioeconomy can contribute to the defossilisation of major industries, such
as the energy and transport sectors, the chemical industry (e.g. plastics) and the construction sector (use of wood and
its composites with other materials in the construction industry as a substitute for non-renewable building materials,
such as steel and concrete with possibly lower use of energy and greenhouse gas emissions). Wood products have
significantly lower greenhouse gas emissions than fossil material alternatives over the complete life cycle of the product
(including use and disposal), yielding an average saving of 1.5 to 3.5 tons of carbon dioxide emissions per 1 ton of wood
products used, instead of construction materials such as concrete.
178
• facilitate the development of new sustainable bio- innovations in sectors such as forestry-based textiles,
refineries across Europe. furniture and chemicals, and new business models based
2. Rapidly deploying bioeconomies across Europe on the valuation of forestry ecosystem services”.
• develop a strategic deployment agenda for sustainable
food and farming systems, forestry and bio-based FORESTRY KEY DATA
products;
• set up an EU Bioeconomy Policy Support Facility for The agriculture, forest-based and marine sectors
EU countries under Horizon 2020 to develop national (mainly aquaculture and fisheries) are the main
and regional bioeconomy agendas. primary producers/suppliers of biomass. The average
3. Protecting the ecosystem and understanding the EU-28 annual domestic biomass production from the
land-based sectors (forestry and agriculture, excluding
ecological limitations of the bioeconomy
pastures) is 1466 megatonnes of (above ground) dry
• implement an EU-wide monitoring system to track
matter (wood production 510 Mt -78,9% steam wood).
progress towards a sustainable and circular bioeconomy;
• enhance our knowledge base and understanding of
specific bioeconomy areas by gathering data and About 84% of the EU forest area is considered potentially
ensuring better access to it through the Knowledge available for wood supply. In this area 444 megatonnes of
Centre for the Bioecnonomy; wood grow every year (wood net annual increment, i.e.
• provide guidance and promote good practices on how excluding losses due to natural mortality of trees). The EU
to operate in the bioeconomy within safe ecological average wood harvest rate is around 65 % of the wood net
limits. annual increment, though such rates vary widely across the
member states. This results in many cases in an increase
The sustainable European bioeconomy is necessary to build of forest-based woody biomass stock over time (around
a carbon neutral future in line with the Climate objectives of 100 megatonnes of carbon annually and approximately
the Paris Agreement. In this respect, the update bioeconomy 9% of Europe’s fossil fuel emissions). However, reported
strategy recognises that in the construction sector harvesting is likely to be consistently underestimated by up
engineered wood offers great environmental benefits to 20%, meaning that biomass availability is actually higher
as well as excellent economic opportunities. Bioenergy, than statistically recorded. Over 95 % of roundwood used
currently the EU’s largest renewable energy source, is by the EU’s wood-processing sector comes from EU forests.
expected to remain a key component of the energy mix in There is a potential for increasing harvest rates and wood
2030 and contribute to meet the EU renewable energy targets. mobilisation to provide additional quantities of woody
biomass without exceeding the total annual increments, in
FORESTRY order to maintain a domestic EU wood supply to the existing
wood-processing industries, and also to service the growing
The European Commission will actively support and demands from bio-based materials and products within
promote all types of innovations and practices for the bioeconomy. Yet, trade-offs with other forest ecosystem
sustainable food and farming systems, forestry and services - e.g. carbon sink, nature conservation, recreation,
bio-based production through a systemic and cross- soil and flood protection – need to be carefully assessed.
cutting approach linking actors, territories and value
The implementation of sustainable forest management
chains.
principles, as enshrined in the EU Forest Strategy, must
ensure sustainable wood mobilisation in the EU.
The Commission will develop a Strategic Deployment • According to the Standing Committee of Agricultural
Agenda which will provide a long-term vision on pathways Research Foresight on Sustainable Agriculture, Forestry
to deploy and scale up the bioeconomy in a sustainable and Fisheries in the Bioeconomy, the BIOBOOM scenario
and circular manner. This systemic approach will address, foresees that the amount of biomass used globally for
amongst others: “new opportunities arising for the biobased materials and chemicals could grow from 1.24
forestry sector in view of replacing non sustainable billion tons in 2012 to 5.7 in 2050, while the BIO-MODESTY
raw materials in construction, packaging with bio- scenario assumes that the growth in demand for biomass
based materials and for providing more sustainable for materials and energy will be relatively low.
179
WOOD IN COSTRUCTION with new functionalities (e.g. nanocellulose, carbon nano-

fibres, adhesives, normal and intelligent textiles, flexible
The bio-based sector does not only contribute to electronics, 3D printing applications). The technologies also
growth and jobs but can also help to sequestrate enable biowaste and residues from farms and forest-based
carbon through its long-term storage e.g. in wooden sector, from cities or from the food sector to be transformed
and woody biomass-based products.
into bio-based products such as chemicals, organic
fertilizers, biofuels and eventually heat and power, if a more
In the construction sector, greater use of wood as a substitute circular use is not possible.
for more energy-intensive non-renewable building material
can reduce greenhouse gas emissions. According to a KEY ACTIONS
report from the Food and Agriculture Organization (FAO) of
the United Nations an analysis of 21 studies on mitigation To ensure that the bioeconomy operates within the
potential of wood use in buildings and furnishing showed planetary boundaries, first and foremost a robust
that most studies concluded that wood products have assessment of the amounts, types, qualities and
impacts of the sustainable production and use of
lower greenhouse gas emissions than alternatives over
biomass from all sources is needed.
the complete life cycle of the product (including use and
disposal). Analyses of the average impact of using wood
instead of concrete suggest an average reduction of 2.1 tons Notwithstanding the wealth of information available,
of carbon dioxide emissions per 1 ton of wood products significant data gaps remain, impeding fully assess the
used. different impacts of the bioeconomy. Notably, information
A 1% increase of European wood-based products in the is still scarce on how much biomass is available and can
market share of the global construction, textile and plastics be mobilised sustainably, how much is being used and for
markets could generate a revenue for the European wood- which purposes, and how the increased pressure on natural
based bioeconomy in the scale of EUR 10 to 60 billion. This resources can be reconciled with environmental, economic
would amount to 3% - 20% of the current total turnover of and social sustainability in Europe and globally.
the EU forest industry. The additional industrial roundwood Specific Action: Enhance information and the knowledge
use of this 1% increase would be at least 83 million base on the bioeconomy, including sustainable biomass
cubic metres, which would be 23% of the total industrial supply and demand, and forward looking, cross-sectoral
roundwood production in the EU in 2016 (355 million cubic assessments, and make it accessible through the Knowledge
metres, data FAOSTAT). However, while the annual harvest Centre for Bioeconomy.
would still be below the net annual increment, such an As part of the development of the Forest Information
increase in the EU roundwood utilisation would reduce the System for Europe, specific sections in the system will
EU’s carbon sink, therefore trade-offs across all bioeconomy address the data and information needs to support the
areas need to be carefully considered. sustainable development of the bioeconomy, to support
assessing the sustainable availability of domestic biomass
WOOD PRODUCTS IN A CIRCULAR PROSPECTIVE resources in the context of climate change and biodiversity
loss Indicators.
The bio-based sector does not only contribute to A large and growing number of EU and national policies
growth and jobs but can also help to sequestrate draw on, or affect directly and indirectly, Europe’s forest
carbon through its long-term storage e.g. in wooden ecosystems and their services. As the need for renewable
and woody biomass-based products.
materials and energy increases, the demand for various
types, dimensions and qualities of woody biomass is
Advances in bio-based innovation foster the circularity of the on the rise as well. There is hence a need for improved
bio-based sector and the whole bioeconomy by enabling the efforts to provide more accurate, frequent and harmonised
processing of current side streams, residues and waste into data and assessment tools on the status and management
products. For instance, side streams of both wood working of forest ecosystems through the FISE.
industries and pulp, paper and board manufacturing can In particular, this action would help the European
be converted into large number of new bio-based products Commission and all other relevant players to:
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a) analyse economic, social and environmental impacts of 1) Address methodological and data challenges,
the future development of the EU’s and global bio-based through EU funds such as LIFE, the Horizon programmes
economy on the EU’s forest-based and related industries; and other funding opportunities would contribute to
b) support policy initiatives at EU and Member States levels their development. Covering these developments with
to mitigate negative impacts but also enable or enhance EU funds would also help to make them available for
positive impacts; free to any user in the world, further reducing the cost
c) identify other necessary and/or desirable enabling and/ of access to users and strengthening the environmental
or mitigating actions and their actors; assessment of bio-based products and their supply
d) inform the EU’s long-term forest growth and biomass chain. Member States should contribute to the creation,
availability scenarios and assessments. update and maintenance of such datasets. The number
of datasets to be developed will depend on the type of
Promote and/or develop standards and emerging bio-based products and their supply chains that will
market-based incentives, and improve labels be identified as priority. Considering that biomass is an
applicable to bio-based products on the basis of important environmental hotspot, it could be one of the
reliable and comparable data on environmental and priorities for data development.
climate performance 2) Propose, whenever relevant and possible, to consider
the inclusion of specific requirements promoting
Product policy environmental oriented instruments such bio-based materials and products during the
as Green Public Procurement (GPP) and the EU Ecolabel development of EU Ecolabel and GPP criteria for new
should only promote the increased market uptake of bio- or existing product groups, according to Environmental
based products and processes if they are proven to be Footprint247 results, and in line with available EU
beneficial also from an environmental perspective. One of standards and technical reports,248 as well as with the
the key elements in determining their potential superiority strategic approach for EU Ecolabel and GPP. The action
is that their life cycle environmental performance is better will contribute to the Circular Economy and potentially
than existing alternatives. EU methods for measuring life to the Plastics Strategy.
cycle environmental performance in a comparable way 3) Promote and/or develop existing standards and
exist: these are the Product and Organisation Environmental labels and emerging market-based incentives for bio-
Footprint methods (PEF and OEF, respectively), adopted based products.
by the Commission in 2013. The methods were developed These combined actions will allow for the full exploration
based on existing standards with the aim of making results of the potential of biobased products, analyse their
comparable, reproducible and reliable. Environmental Footprint in comparison to alternative
• They accommodate a broader suite of relevant fossil-based products, and allow their promotion on
environmental performance criteria, allowing to calculate markets, boosting consumer confidence and their
in a harmonised way 16 different impacts (including uptake.
climate change, direct land use, water use, acidification,
eutrophication and resource use, of a product, a service OVERALL CONCLUSIONS
or an organisation by looking at the entire value chain
(from cradle to grave). The methods were field tested The finite biological resources and ecosystems of our
in collaboration with Member States, NGOs and 25 planet are essential to feed people, provide clean
industry sectors, including 11 pilots related to feed and water and affordable and clean energy. A sustainable
food products. For these product groups, the European bioeconomy is essential to tackle climate change
Commission made freely available more than two and land and ecosystem degradation.
thousand Life Cycle Inventory data, which are adequate
for comparing similar final products and are used in It will address the growing demand for food, feed, energy,
combination with primary data to do so. materials and products due to an increasing world
population, and reduce our dependence on non-renewable
Through relevant funding programmes and by 2025, the EU resources. Deploying a sustainable and circular bioeconomy
Commission (and Member States, when relevant) will: will boost the competitiveness of the bioeconomy sectors
181
and support the creation of new value chains across Europe and on advances in sciences, technologies and innovations
while enhancing the overall status of our natural resources. merging the physical, digital and biological worlds, in some
Such a bioeconomy will rely and capitalise mainly on of the EU’s most significant sectors and industries.
domestically available sustainable renewable resources,
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Wood in Construction - 25 cases of Nordic Good Practice
On 19 April 2019, the European Commission published on for architects, land managers, city planners, designers,
its “Bioeconomy webpage” the publication on “Wood in suppliers and many more. The 25 cases point to five trends
construction - 25 cases of nordic good practice”. within Nordic wood in construction that paint a picture
Abstract. Building with wood has an untapped potential of where the industry is headed: 1) multifunctionality; 2)
to transform the construction industry and create the saving time and costs; 3) investing in scalability; 4) pushing
next generation of low-carbon and healthy buildings. the boundaries; and 5) circular design.The team behind this
The Nordics, with an abundance of sustainably managed report – the Nordic Wood in Construction Secretariat – is an
forest resources and a long history of building in wood, are initiative commissioned by the Nordic Council of Ministers
well placed to lead in this construction revolution. Across and the Swedish Government, and hosted by EIT Climate-
the wood in construction value chain, from forestry and KIC. The secretariat’s aim is to support and accelerate the
processing, through production and design, to construction use of wood in Nordic construction through a portfolio of
and decommission, the Nordic region is innovating to projects, fostering greater dialogue, knowledge-sharing and
build bigger and more sustainably with wood than ever collaboration between stakeholders from the private sector,
before.This publication features 25 Nordic cases from public sector, and academia.
across the value chain working with wood in exciting and Copy of this publication is available here:
innovative ways. These projects demonstrate the benefits http://norden.diva-portal.org/smash/get/diva2:1297443/
and drivers for building with wood, and provide inspiration FULLTEXT03.pdf
6.9.2 Report by the European Economic and Social Committee

on the “Communication updating the 2012 Bio-economy Strategy”
Currently only the European Economic and Social EU bioeconomy. An important obstacle relates to product
Committee (EESC) is working on the “Communication cost-competitiveness, both compared to fossil alternatives
updating the 2012 Bio-economy Strategy”. and to equivalent products from elsewhere in the world.
On 28 February the EOS Secretariat attended the hearing Cost-competitiveness is affected by many factors, including
organised by the EESC and proposed to include the several technology readiness level, labour costs, fossil fuel subsidies
sawmill-related considerations to the EESC report (inputs and amortisation, as well as the low level of market
presented orally and in a separate email to the EESC expert.) support for bio-based products. This competitiveness
From the discussion emerged that the EESC recognises that issue is compounded by difficulties in accessing finance
bioeconomy provides options for reducing CO2 emissions for innovative projects and production facilities and, often,
and reliance on imported fossil resources. “For example, ongoing low end-user awareness of bio-based products,
EU forests sequestrate an amount of carbon corresponding as well as by a lack of skills and operational relationships
to 10% of the EU’s yearly emissions, while providing a to drive the sector forward. Moreover, permit procedures
sustainable and constant supply of biomass for renewable for new bio-based projects are becoming lengthy and
energy. Furthermore, estimates show that 100 000 chemicals burdensome, leading to significant legal uncertainties and
currently in production can, in theory, be sourced from financial risks for economic actors”.
renewable raw materials. This does not mean all of them The EESC Opinion on the bioeconomy is expected to be
should be, but it is theoretically possible. This will not only adopted in June 2019.
offer the possibility of producing our everyday household
items locally and renewably, it will also help create jobs,
particularly in coastal and rural areas, and growth in Europe,
where the technological edge still remains strong. According
to industry estimates, one million new jobs could be created
by 2030 in the bio-based industries. However, major barriers
remain on the path towards greater innovation within the
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Inputs presented orally and in a separate email to the EESC by EOS
Approximately, 98% of the logs processed by the European Sawmill Industries comes from European forests. In an
evolving green economy the European Sawmill Industry plays a key role and it can be defined as the backbone of the
circular bio-economy.
Indeed, residues from sawmill processes can be converted into a broad range of wood-based products including bio-
composite materials, bio-bioplastics, textiles and carbon-neutral biofuels. Simultaneously, the production of saw-logs,
and the correlated use of by-products and residues, complies with the resource efficiency principle, guarantees the
highest profitability for forest owners and assures the raw materials needed for developing the bio-economy. Sawmill
residues can be used further processed and be transformed in biodegradable additive for the manufacturing of mortars
and concrete.
From an economic point of view, the largest sources of income (80%) for forest owners (both private and public) come
from the sale of logs to the sawmill industries. When discussing the forest-base bio-economy, it is undeniable that the
sawmill industry plays a central role.
Nevertheless, a reliable wood supply is a major challenge for the sector. Forest change caused by the climate, forest
pests but also trade, cause significant variability for the sector. Regarding the trade issue, logs ban currently in place in
territories such as Ukraine and Belarus and logs exports such as the “China-Europe Wood Industry Committee” initiative
created in order to facilitate the logs trade from Europe to China negatively impact raw material supply. If we look at the
hardwood sawmill industries, this subsector has lost 30% of its sawmill in France in the last 10 years. Similar situation
is faced by the hardwood sawmill in Germany and Belgium. Moreover, in 2017 China imported from Poland 40ths m3 of
softwood roundwood. In 2018 – almost 1mln.
• From an economic point of view, the largest sources of income (80%) for forest owners (both private and public) come
from the sale of logs to the sawmill industries that use on approximative average, 98% of logs sourced from European
forests. When discussing the forest-base bio-economy, it is undeniable that the sawmill industry plays a central role
and should be seen as a key component of it.
• The forest bio-economy relies on renewable biological resources to produce added values materials contributing
to Europe’s growth, offering opportunities for innovation and jobs especially in Europe’s rural areas. Reliable wood
supply is a major challenge for the forest-based industries. Forest change caused by the climate, forest pests but
also trade, create uncertain for the sector. Regarding the trade aspects, logs bans or export limitations currently in
place in territories such as Ukraine and Belarus and logs exports dramatically affect wood availability and reduce the
opportunities for developing a strong bio-economy in Europe.
• With a view of enhancing the European forest bio-economy the EESC call for:
- Creating favourable market conditions for the entire European Forestry Industry chain including necessarily
opportunities for the micro and small forest-based industries. A comprehensive funding approach (beyond the
R&D and pre-commercial stages) in order to commercialise new products is needed.
- Implementing climate policies objectives which do not neglect a sustainable mobilisation of wood resources. EU
forests have contributed to climate mitigation already for decades accumulating more timber volume (growing
stock) than was harvested.
- Encouraging silviculture practices to enrich the timber size and quality in order to respond to market preferences
for species and quality and responding to environmental needs.
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6.10 European Raw Materials Week 2018
The third edition of the Raw Materials Week took place • Lack of a pan-European database on wooden housing
in Brussels from 12 - 16 November 2018. The event was starts.
organised in order to discuss and exchange views on
all relevant issues: policy, technology, international Moreover, EOS called for establishing an operative task force
cooperation, framework conditions, etc. within the competent working groups of the EU Commission
in order to identify the strategic information needs of the
industry sub-sectors for 2050.
A letter of support for this initiative has been circulated
amongst the Brussels’ based organisations representing the
Forest-Based Industry.
The colleagues of the other sub-sectors and as a result of
that EOS, together with many organizations representing
the interest of various sub-sectors of the forest-based
industry, officially asked to the European Commission to set
up a task force to try and address those issues.
Following this initiative, on the 7th of March, a preliminary

meeting with the representatives of the EU Commission
For the first time, the European Raw material week had a was organised. Associations representing the interests of
session dedicated to the Forest-Based Industries 2050. the bioenergy, the paper sector and the forest sector were
On this occasion the EOS Secretariat was invited to give a also present. As a result of this preliminary meeting, it was
presentation on the sectoral information needs, including agreed that every sub-sector should with the Commission
data gaps and data inconsistencies. while the EOS President its data-related concerns by the 22nd March. Following that,
Sampsa Auvinen was invited as a panelist to share his views the Commission will investigate whether the best option
on the future perspectives of the forest-based industries is creating a formal Task Force or if proceeding with the
over the next thirty years. organisation of meetings in a more informal way.
In a nutshell, the presentation that the EOS Secretariat gave

Data gaps identified by EOS and sent
was about:
to the European Commission (DG GROW)
• Data inconsistencies and gaps in the Joint Forest Sector
Questionnaire and consequently the related databases How to Improve/Expand Existing International
that draw their data from it; Databases – EOS Draft Input
• Inconsistencies between nomenclatures which classify Overall, there are good available databases in
products also damage the quality of data; the woodworking industry. But there are some
• General information gaps that prevent full understanding inconsistencies and gaps that prevent full
of markets, for example; understanding of markets.
• The future forest composition and distribution: the European The following are some of the suggestions of the
Environmental Agency reports that the supply of softwood European Organization of the Sawmill Industry:
• The EU Bioeconomy Strategy reckons that: “in
species will decrease in many parts of Europe whereas the
the construction sector, greater use of wood as a
supply of hardwood species will increase. This is in contrast to
substitute for more energy-intensive non-renewable
long-term trends in the market which have seen the demand
building material can reduce greenhouse gas
for sawn softwood on the rise in the last two decades, while emissions”. However, at present, while national
the demand for sawn hardwood is stable; statistics are often available, a EU-level database on
• Lack of Harmonised System codes for mass timber wooden building is lacking.
construction products such as glulam and CLT;
185
➡ EOS thus calls for the creation of a database activity in the fields of economic statistics. CN, the
which would include at EU Country-level Combined Nomenclature is the classification used
total number of housing starts – in a given within the EU for the purposes of foreign trade
year – and the percentage on this of wooden custom tariffs and statistics and provides a degree of
buildings. In absence of this, it is challenging to detail going beyond that in the Harmonised System.
track progress (or lack of it) in the greater use of ➡ The NACE system is based on economic
wood as a building material. activity, the CN on trade: two different point of
views. However, data should be more aligned.
• Engineered Wood Products such as gluelam, cross- If you extract data from the two sources you
laminated timber, laminated veneer lumber, are will notice huge differences.
becoming more and more important in the market.
➡ These products need to have their own • Connected to the above, the main data source of
code in the Harmonised System (which is the sector which informs some databases such
the international product nomenclature). EOS as Eurostat or FAOStat is the Joint Forest Sector
acknowledges that this process is ongoing at Questionnaire, which collects yearly data from
international level: products such as gluelam and countries about roundwood, charcoal, residues,
CLT are expected to get their own well-defined pellets, sawnwood, veneer sheets, wood-based
code in the next revision which will go live in 2022. panels, wood pulp, other paper, recovered paper,
EOS fully supports this process but also call to paper and paperboard. However, the breakdown by
systematically track the production of these softwood or hardwood species is unavailable.
products, which at present is not tracked. Considering that the JFSQ uses the Harmonised
System (HS) which is fully compatible with all national
• One of the main problems is the situation with NACE systems and the EU’s CN, and considering that in the
and CN nomenclatures. The Statistical classification latter the breakdown by tree species is available, EOS
of economic activities in the European Community, calls for the inclusion of figures at tree species
abbreviated as NACE, is the classification of level (at least the main ones) in international
economic activities in the European Union (EU); databases such as FAOStat – production of sawn
NACE is a four-digit classification providing the spruce, sawn pine, sawn oak, sawn beech broken
framework for collecting and presenting a large down by country.
range of statistical data according to economic
© Shutterstock
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To: Peter Handley

Malwina Nowakowska
Cc: Constanze Veeh

Jeremy Wall
European Commission
DG Growth
Unit C-2: Resource Efficiency & Raw Materials
BREY 11/166
B-1049 Brussels/Belgium
Brussels, 06 February 2019
TACKLING DATA GAPS AND ASSESSING MARKET TRENDS: Kind Request to Establish a F-BI Task Force
possibly in the Framework of the Expert Group on Forest-Based Industries and Sectorally Related
Issues
Dear Mr Handley,
Dear Ms Nowakowska,
The European Forest-Based Industry (henceforth F-BI) is one of the important pillars of the European
Union (EU) green economy. Universally recognized as a traditional manufacturing sector, over the last
few years it has been displaying creativity and innovation, putting on the market a plethora of
products that live up to the expectations of modern consumers. The usage of F-BI products remains
one of the cornerstones of the multiple EU policies aiming at fostering the decarbonization of the
economy and meeting the goals of the Paris Agreement.
187
In the light of the above, the potential of the F-BI products and the wood supply need to be properly
tracked through correct and fully reliable data. A failure to do that might lead to misperceptions
regarding the size and the prospects of markets, which, in turn, might lead to policy decisions based
on mistaken assumptions.
Currently, the F-BI disposes of an overall good and vast basis of data, but many F-BI sub-sectors have
noticed flaws in the available databases and also general information and knowledge gaps that
prevent full understanding of markets. During the latest EU Raw Materials Week, in the session Forest-
Based Industries 2050 held on November 15, one of the issues raised by the F-BI was, indeed, that in
the coming decades all stakeholders need to step up and improve the available data.
In the wake of this situation, the signatories of this letter kindly invite the European Commission to
explore the possibility to create a Task Force potentially in the framework of the Expert Group on
Forest-Based Industries and Sectorally Related Issues in order to address the aforementioned issues.
Trusting that the EU Commission will identify the most appropriate organizational form of the Task
Force (or, if necessary, a more appropriate forum), we would like to emphasize the following two sets
of questions that should be prioritised:
a) Identify data and information gaps in existing data sources/databases of the sectors (for
instance, Eurostat, FAO, UNECE, Joint Forest Sector Questionnaire, Joint Wood Energy
Enquiry, etc…);
b) Identify general information gaps that prevent full understanding of some market dynamics.
An open list of expected outputs of the Task Force includes proposals on how to improve existing
databases, and what kind of new studies/databases the F-BI needs to fill the identified knowledge
gaps. Also, an important aspect to be addressed is the enhanced co-operation among the international
bodies dealing with forest products markets and statistics to avoid duplication of efforts and bridge
the existing gaps in a cost-effective manner.
As the issue is of high importance, the Task Force is expected to convene regularly, with its frequency
to be discussed by stakeholders at a later moment. The exact set-up of the Task Force would be
investigated during its first meeting. If needed, the signatories of this letter would be happy to provide
clarifications to the Commission in a preliminary meeting.
Thanking you in advance for considering this proposal, we remain,
Kind Regards,
BIOENERGY EUROPE – The Voice of European bioenergy

CEI-BOIS – European Confederation of Woodworking Industries
CEPF – Confederation of European Forest Owners
CEPI – Confederation of European Paper Industries
EOS – European Organization of the Sawmill Industry
EPF – European Panel Federation
ETTF – European Timber Trade Federation
EUSTAFOR – European State Forest Association
FEP – European Federation of the Parquet Industry
INTERGRAF – European Federation for Print and Digital Communication
WEI-IEO – European Institute for Wood Preservation
188
6.11 The European Trade policy

6.11.1 Croatia: national measures against Corythuca arcuata and movements
of oak logs
On occasion of the STANDING COMMITTEE ON PLANTS, efficacy of the measures to allow a real eradication – or at
ANIMALS, FOOD AND FEED held in Brussels on 11 october least containment – objective. Moreover, some of the other
2018 - 12 october 2018 (Section Plant Health) it was reported affected Member States stated that they would not support
that Croatia reported on their national measures against the emergency measures undertaken by Croatia.
Corythuca arcuata and movements of oak logs. In particular,
Croatia presented the results of a study carried out to ➡ As a conclusion the Commission requested Croatia to
evaluate the efficacy of national measures in limiting the withdraw the national decree that is limiting movement
spread of the pest Corythuca arcuata on oak forests. During and trade of oak logs. An official letter was sent to the
the exchange of views concerns were expressed about the Croatian competent authority.
6.11.2 Ukraine logs export ban

A law signed by the Ukrainian President Petro Poroshenko form of export restrictions. Further official information is
on July 7, 2015, banned exports of unprocessed hard wood available at: http://trade.ec.europa.eu/doclib/press/index.
from November 1, 2015. Still, exports of pine was allowed cfm?id=1968
till January 1, 2017. At the beginning of 2017, Ukraine
banned exports of pine wood despite pressure from EU to Additionally, the EOS secretariat received confirmation
lift the wood export ban. The President of the European that a new legislative initiative was launched by the same
Commission expressed a wish and expectation to end the members of the Ukrainian Parliament who were behind
ban on exports of wood products from Ukraine. the current logwood ban legislation. The new bill seeks to
extend the ban to firewood (tariff line 4401 10 00 00).
The EU considers that the longstanding trade restriction • Members of the Ukrainian parliament Werchowna Rada
by Ukraine is in violation of key trade provisions of the EU- petitioned for an export ban on firewood on 16 January 2019.
Ukraine Association Agreement, which prohibit any form of The draft bill “On the protection of the Ukrainian forests”
export restrictions. While the EU strongly supports legitimate provides for a moratorium on exports of firewood. The
measures taken by states to preserve forests and to combat purpose of this is to close the loophole that exists in the ban
illegal logging, the EU has repeatedly stated that Ukraine’s on log exports in place since November 2015 and January
export ban cannot be considered an appropriate or effective 2017. At the moment, only logs with a maximum length of 2
measure for that purpose and has repeatedly offered co- m declared under the customs tariff 4401 are exempted from
operation in the area of forest preservation and management. the ban on exports. The possibilities are being exploited by
wood-based panel and pulp manufacturers in central and
Last February 2019, the EU Commission officially published southeast Europe, for example, to import industrial wood
its requests for the bilateral dispute settlement consultations from the Ukraine legally even though the ban on log exports
with Ukraine over wood export ban. has come into force
The bilateral dispute settlement consultations was expected The almost identical bill was adopted at the plenary of
to last 30 working days aiming at finding a solutions mutually the Parliament last year and successfully vetoed by the
acceptable to the parties to the dispute. If a solution is not President. It never became law.
found, a so called “arbitral panel” will have 100 days to
identify the balance solution. On 11 April, EOS draw the attention of DG TRADE to the
The EU considers that the longstanding trade restriction data regarding the exports of European softwood lumber to
by Ukraine is in violation of key trade provisions of the China (Russia is not included). (Data received by Woodstat
EU-Ukraine Association Agreement, which prohibit any on the very same day)
189
While EOS recognise that the Ukraine political and economic largest European exporter of softwood lumber to China–
situation is challenging and complicated, this figure shows from virtually no exports at the beginning of 2017.
that the Ukrainian logs ban not only poses a problem in EOS therefore urged the European Commission to continue
terms of supply of wood in the EU, but it allowed Ukraine to in its efforts aiming to remove the unlawful ban, while EOS
become a significant competitor for the EU producers even also confirmed its full availability to provide any kind of
in China. In the space of just two years (since the logs export support on this matter.
ban was extended also to pine), Ukraine could become the
In 2018, the European Organisation of the sawmill Industry was appointed as Member of the EU-Ukraine Advisory Group
Article 299 of the EU-Ukraine Association Agreement stipulates that each Party establish an Advisory Group (AG) on
sustainable development, to advise on issues relating to the chapter on trade and sustainable development. The AGs
comprise independent representative civil society organisations (CSOs), with balanced representation of employers’
and workers’ organisations and non-governmental organisations, as well as other relevant stakeholders. Meetings are
organised under the responsibility of the European Economic and Social Committee.
6.11.3 Market Access Advisory Committee

In 2019 the European Organisation of the Sawmill Industry EOS attended the MAAC meeting for the first time on
was appointed by DG TRADE to take part in the the Market the 30th of April. One agenda point of the meeting is the
Access Advisory Committee (MAAC). presentation of the Trade and Investment Barrier Report,
in which the Commission mentions the recent launch of
The Market Access Advisory Committee (MAAC) serves proceedings with Ukraine under the Association Agreement
as a general platform for coordinating market access (due to the log export ban put in place by Ukraine).
issues, ensuring a coherent approach as well as One point of interest for the European woodworking
increasing transparency among all partners, including industry regarding the Russian list of barriers was also
tackling of specific barriers to trade that need a more discussed during the meeting:
detailed discussion among experts and EU Member • Export quota on birch logs: in July 2018 Russia adopted
States. The MAAC meetings are organised by DG export quotas affecting quality birch logs (diameter of at
TRADE of the European Commission. least 15 cm and length of at least 1 m), as a temporary
measure between 1.1.2019 and 30.6.2019, with a total
export quota of 567000 cubic meters. The measure is
190
currently in force and affecting import of quality birch consist of a Heat Treatment (HT). During this heat treatment
logs into the EU. During the meeting it was stated that it the wood must maintain a core temperature of 56°C for 30
is likely that the birch logs export quotas will be renewed min. Kiln-dried wood does not require heat treatment. Since
even after June 2019 the wood is mechanically debarked before being cut, small
bark residues (≤50cm2) may adhere to the trunk. Despite the
During the meeting EOS also raised the attention on a trade previous treatment, these small residues must be removed
barrier erected by Mexico, which is negatively impacting on manually, as Mexican import regulations do not allow any
German exports of sawnwood. To import sawn wood (into bark residues. This post-treatment of the wood involves
Mexico), air dried, wet or green, the exporter must conduct considerable costs and expenses which are excessive. EOS
phytosanitary treatment in the exporting country, which has asked this barrier to be removed.
6.11.4 European Commission proposes signature and conclusion of Japan

Following the signature of the EU-Japan Economic This Economic Partnership Agreement has been closely
Partnership Agreement (EPA) in July 2018, and the monitored by the EOS Secretariat throughout the negotiating
conclusion of the ratification procedures by both partners phase due to its importance for the EOS Members.
at the end of 2018, the agreement entered into force on 1
February 2019. A memorandum published by the European Commission
• The two houses of the Japanese National Diet completed reminds that tariffs on all wood products will be fully
their ratification of the EPA on 29 November and 8 eliminated, with seven years staging for the most important
December 2018, respectively. On 20 December 2018, the priorities. It has to be noted that Japan has declared that
Council adopted the decision to conclude the agreement. the pace of tariff reduction will have to follow their fiscal
The EU and Japan notified each other of the conclusion of year (from April to March). Therefore, since the agreement
their respective ratification procedures on 21 December enters into force on the first of February, the schedule of the
2018. The EPA thus entered into force on 1 February 2019. Japanese tariff reduction will be the following:
The agreement is the EU’s largest bilateral trade agreement
to date. It establishes a free trade area with a combined • Year 1: 01/01/2019 – 31/03/2019 (so a very short year of
market of around 640 million consumers, accounting for only two months)
roughly a third of the world’s gross domestic product • Year 2: 01/04/2019 – 31/03/2020
(GDP). • Year 3: 01/04/2020 – 31/03/2021
• Year 4: 01/04/2021 – 31/03/2022
In 2017, Japan was the sixth largest destination market for • Year 5: 01/04/2022 – 31/03/2023
EU exports of goods and fifth largest market for EU agri- • Year 6: 01/04/2023 – 31/03/2024
food exports. In the same year, the EU was Japan’s third • Year 7: 01/04/2024 – 31/03/2025
largest trading partner in goods. Total trade in goods Reported below, the schedule of Japanese tariffs reduction
between the EU and Japan accounted for €129.5 billion for the products of interest for the European Sawmill
in 2017, with a trade deficit on the EU side of €8.2 billion. Industry (sawn hardwood can already enter Japan tariff-
In 2015, Japanese multinational enterprises (MNEs) free).
accounted for 5 % of foreign companies in the EU and Regarding illegal logging, the memorandum states that “The
employed 625 000 people. The revenues resulting from the EU and Japan share a common commitment to combat
turnover of Japanese firms in the EU were more than four illegal logging and related trade. Trade in illegal timber is not
times higher than the revenues from Japanese exports to an issue between the EU and Japan. The EU has a very clear
the EU (€375 million and €75.8 million, respectively). In the legislation on illegal logging, just like Japan, which applies
case of the EU, these two figures did not differ significantly to imports from any country of origin. Both partners have
(€84.1 million from EU exports to Japan, and €86.1 million surveillance and certification systems in place to prevent the
from turnover of EU companies in Japan). (Source of this import of illegal timber. The two partners also work closely
information: EPRS | European Parliamentary Research with third countries to support them in setting up efficient
Service) mechanisms to address the problem. The agreement
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includes a legal provision committing both partners to the for stronger relations between the EU and Japan. The
prevention of illegal logging and related trade.” agreement also conveys a strong message on the parties’
commitment to promoting a free and fair trading system
The European Commission’s analysis of the economic and to rejecting trade protectionism.
impact of the agreement, published in June 2018, indicated
that the EU’s GDP could rise by approximately 0.14 %, and The Economic Partnership Agreement between the EU and
EU exports to Japan by around €13 billion by the time Japan is expected to strengthen the economic relations
the EPA is fully implemented in 2035. The agreement will between the two economies having a positive impact
provide for significant economic opportunities for sectors on small and medium-sized enterprises (SMEs) as well
such as agri-food and textiles, and it is predicted that no EU because it facilitates exporting and importing and reduces
sector will be impacted by noticeable losses. costs. SMEs represent 99% of all companies and provide
about two thirds of jobs in the private sector and over 50%
In addition to exploiting the untapped potential of bilateral of economic output (in the EU around 56% and in Japan
trade and strengthening the EU’s economic presence in over 50%). Therefore both parties have agreed on a specific
the Asia-Pacific region, the EPA, together with the Strategic chapter for SMEs in the EPA to ensure that more small
Partnership Agreement (SPA), will provide a platform companies will gain from the benefits of this agreement.
© Shutterstock
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6.11.5 Brexit
At this writing (end of April 2019), it is impossible to predict the final outcome of the Brexit process. After many months of
tension, the EU has agreed to an extension of the Brexit deadline until 31 October, with a review in June. A no-deal Brexit
remains possible in case the UK and the EU do no find an agreement.
THE WITHDRAWAL AGREEMENT

In November 2018, the European Union (EU) and the United Kingdom
(UK) endorsed an agreement that would ensure an orderly UK withdrawal
from the EU on 30 March 2019, as well as a political declaration setting out
the main parameters of the future EU-UK relationship. The withdrawal
agreement is an extensive legal document aiming, among other things,
to preserve the essential rights of UK nationals living in the EU-27 and
EU citizens living in the UK; to ensure that all financial commitments
vis-à-vis the EU undertaken while the UK was a Member State are
respected; and to conclude in an orderly manner ongoing processes
in various areas (e.g. circulation of goods already on the market and ongoing judicial procedures). Importantly, the
agreement establishes a 21-month transition period, extendable once, to help businesses and citizens to adapt to the
new circumstances, and the EU and UK to negotiate their future partnership agreements. During this time, the UK will
be treated as a Member State, but without any EU decision-making and representation rights. Furthermore, one of the
agreement’s three protocols, the Protocol on Ireland/Northern Ireland contains a legally operational ‘backstop’, aiming
to avoid a hard border on the island of Ireland in the future. It has long been the most contested aspect of the withdrawal
deal. The political declaration, by contrast, is a non-binding text, providing the basis for future EU-UK economic and
security cooperation, taking into account both sides’ red lines and principles. With just days to go to the Brexit deadline,
the procedures to approve the withdrawal deal have still not been finalised, due to continuing opposition within the UK
Parliament. While extending the Article 50 negotiating period now appears highly likely, all scenarios are still possible,
including the UK leaving the EU without a deal at the end of March 2019. Source: “Brexit: Understanding the withdrawal
agreement and political declaration” by the European Parliament
In the event of a no-deal Brexit, the plants currently managed

under EU plant passports will require a phytosanitary certificate
issued by the national plant protection organisation (NPPO) in
the member state of export. When the UK leaves the EU, the
EU will apply third country controls on imports from the UK,
including controls on all plants for planting, certain wood,
wood products or bark and all wood packaging material.
The UK NPPO will ensure that UK exports of regulated on WPM will continue to be carried out in the UK on a risk-
plants and plant products comply with EU third country targeted basis only. The plant health risk from WPM imported
requirements when issuing phytosanitary certificates as they from the EU is not expected to change as a result of an EU exit.
do now for third countries. Wood packaging material (WPM) In case of a no-deal Brexit at any rate there will not be tariffs
moving between the UK and the rest of the EU can currently on products falling under chapter 4407 of the Harmonised
move freely without checks or controls. WPM include: pallets- System (sawnwood products). Also, other wood and paper
crates- boxes- cable drums- spools and dunnage. If the UK products are expected to have no tariffs when exported
leaves the EU with no deal, all WPM exported from the UK to from the UK to the EU.
the EU and all WPM being imported from the EU to the UK The UK government will implement its own UK Timber
must meet ISPM15 international standards by undergoing Regulation which will have the same requirements as the
heat treatment and marking. All WPM may be subject to EU Timber Regulation (EUTR) and Forest Law Enforcement
official checks either upon or after entry to the EU. Checks Governance and Trade (FLEGT).
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On 1 February 2019, the EOS Secretariat attended the Civil Dialogue Group on Forestry and Cork where the EU
Commission gave a presentation about the BREXIT issue and the status of the negotiations.
➡ The information reported below summaries the BREXIT information given by the EU Commission on that occasion.
At the moment - as per information given by the EU Commission - there is no clear understanding on the consequences
of the votes in the House of Commons on the UK government’s Brexit motion. It appears affirmative that the EU
Commission is not willing to reopen any negotiation on the withdrawal agreement.
To be noted.
• As a member of the EU, the UK benefitted from the agreement on the free movement of goods between EU countries
(no import duties, taxes or customs clearance). If the UK leave the EU on 29 March 2019 without a deal there would
be changes to the procedures that apply to businesses trading with the EU. Businesses will have to apply the same
customs and excise rules to goods moving between the UK and the EU as currently apply in cases where goods move
between the UK and a country outside of the EU. This means customs declarations would be needed when goods
enter the UK (an import declaration), or when they leave the UK (an export declaration).
• As written above, in the event of no deal, wood packaging material moving between the UK and the EU must meet
ISPM15 international standards by undergoing heat treatment and marking. Wood packaging material may be
subject to official checks either upon or after entry to the EU.
Wood packaging material includes: pallets, crates, boxes, cable drums, spools and dunnage.
Summary of the information given on occasion of the Civil Dialogue Group on Forestry and Cork.
Key aspects of the withdrawal agreement:

The Withdrawal Agreement establishes the terms of the UK’s withdrawal from the EU. It offers legal certainty once the
Treaties and EU law will cease to apply to the UK.
The EU and the UK agree on the direct effect and the supremacy of the entire Withdrawal Agreement under the same
conditions as those applicable in Union law, as well as the fact that the Court of Justice of the European Union is the
ultimate arbiter for matters related to EU law or Union law concepts.
DISPUTES. In the event of a dispute on the interpretation of the Withdrawal Agreement, an initial political consultation
would take place in a Joint Committee. If no solution is found, either party can refer the dispute to binding arbitration.
The decision of the arbitration panel will be binding on the Union and the UK. In case of non-compliance, the arbitration
panel may impose a lump sum or penalty payment to be paid to the aggrieved party. Finally, if compliance is still not
restored, the Agreement allows parties to suspend proportionately the application of the Withdrawal Agreement itself,
except for citizens’ rights, or parts of other agreements between the Union and the UK. Such suspension is subject to
review by the arbitration panel.
The Withdrawal Agreement covers the following areas:

• Common provisions, setting out standard clauses for the proper understanding and operation of the Withdrawal
Agreement.
• Citizens’ rights, protecting the life choices of over 3 million EU citizens in the UK, and over 1 million UK nationals in
EU countries, safeguarding their right to stay and ensuring that they can continue to contribute to their communities.
• Separation issues, ensuring a smooth winding-down of current arrangements and providing for an orderly
withdrawal (for example, to allow for goods placed on the market before the end of the transition to continue to their
destination).
• A transition period until the end of 2020 (which can be extended once, by up to one or two years) during
which the EU will treat the UK as if it were a Member State, with the exception of participation in the EU institutions
and governance structures. The transition period will help in particular administrations, businesses and citizens to
adapt to the withdrawal of the United Kingdom.
When the UK is no longer a Member States, it will no longer be part of the EU-Free Trade agreements.
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TRANSITION PERIOD NO DEAL SCENARIO

UK bound by the obligation from all EU international International agreements do not longer apply to UK;
agreement; EU traders to check rule of origin in as UK “ingredients”
Guarantees integrity and homogeneity of Sigle market will no longer be considered as EU origin.
and Custom union;
EU will notify its international partners that the UK is
an assimilated Member States for the purpose of
international agreements, including agreements that
enter into force during the transitional period.
• The financial settlement, ensuring that the UK and the EU will honour all financial obligations undertaken while the
UK was a member of the Union.
• The overall governance structure of the Withdrawal Agreement, ensuring the effective management, implementation
and enforcement of the agreement, including appropriate dispute settlement mechanisms.
• Three Protocols:
- The terms of a legally operational backstop to ensure that there will be no hard border between Ireland and
Northern Ireland.
- A protocol on the Sovereign Base Areas (SBA) in Cyprus, protecting the interests of Cypriots who live and work in
the Sovereign Base Areas following the UK’s withdrawal from the Union.
- A Protocol on Gibraltar, which provides for close cooperation between Spain and the UK in respect of Gibraltar on
the implementation of citizens’ rights provisions of the Withdrawal Agreement.
Goods placed on the market

The Withdrawal Agreement provides that goods lawfully placed on the market in the EU or the UK before the end of the
transition period may continue to freely circulate in and between these two markets, until they reach their end-users,
without any need for product modifications or re-labelling.
This means that goods that will still be in the distribution chain at the end of the transition period can reach their end-
users in the EU or the UK without having to comply with any additional product requirements.
Protection of intellectual property rights

Under the Withdrawal Agreement, the protection afforded to existing EU unitary intellectual property rights (trademarks,
registered design rights, plant variety rights etc.) on the territory of the UK will be maintained. All such protected rights
will have to be protected by the UK as national intellectual property rights. The conversion of the EU right into a UK right
for the purpose of protection in the UK will be automatic, without any re-examination and will be free of cost. This will
ensure the respect of existing property rights in the UK and provide for the requisite certainty in respect of users and
right holders.
6.11.6 India-EU bilateral relations

India-EU bilateral relations date to the early 1960s with India India and the EU are negotiating a bilateral Broad-based Trade
being amongst the first countries to establish diplomatic and Investment Agreement (BTIA) since 2007. The India-EU
relations with the European Economic Community in 1962. Joint Commission dealing with economic and commercial
A Cooperation Agreement signed in 1994 took the bilateral issues meets annually, as do its three SubCommissions on
relationship beyond trade and economic cooperation. The Trade, Economic Cooperation and Development Cooperation.
Cooperation Agreement together with the Joint Political
Statement signed in 1993, opened the way for annual In the framework of the EU-India Sub-Commission on Trade
ministerial meetings and a broad political dialogue. in New Delhi held on 6th June 2018 DG GROW invited the
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European stakeholders to share their views regarding trade between India and the various EU industrial sectors.
Reported below, the message sent by EOS.
European Organisation of the Sawmill Industry aisbl
European Organisation of the Sawmill Industry: Who We Are
The European Organization of the Sawmill Industry (EOS) is a Brussels-based non-profit association
representing the interests of the European sawmilling sector on European and International level.
Through its member federations and associated members, EOS represents some 35.000 sawmills in 12
countries across Europe manufacturing sawn boards, timber frames, glulam, joinery, and several other
wood products. The European sawmill industry processes both softwood and hardwood and is
responsible for a turnover of almost 37 billion EUR, employing over 250.000 people in the EU.
EOS reckons that a new meeting of the EU-India Sub-Commission on Trade will take place in New Delhi
on the next 6th June 2018. We have learned with concern of a more protectionist posture of India
regarding trade: the Indian government has decided to increase import duties on a number of products
which impact at least $65 billion worth of imports. Indeed, one of the points in the agenda of the
meeting is: Import duties: recent increases in 2018-19 Union budget in India.
! EOS considers India as an important economic and trade and investment partners. In line with
the “EU-India Agenda for Action-2020”, EOS welcomes the commitment of both parties to
establishing a stable economic climate which is favourable to the expansion of trade and
economic cooperation. A more open Indian market would be beneficial for Indian and
European players alike.
Below more details on the position of the European Sawmill Industry.
India: A Country with High, though Untapped, Potential
India will soon surpass China to become the most populous country in the world. This youthful
population will cause a rapid growth of the construction market. EOS reminds that wood is a renewable
raw material which retains carbon throughout its lifecycle. Thus a higher utilization of wood products,
including in the construction sector, could significantly contribute to the decarbonization of the Indian
economy, which is particularly important in view of the impressive growth rates of the country. The
EOS Members manufacture products using sustainably-sourced wood mainly from European forests
and a higher utilization of EU wood products could add momentum to the decarbonization efforts of
India. In India, having undergone decades of deforestation, the forest cover has stabilized in the last
15 years: severe logging restrictions are in place and as a result the local timber production is low and
the country has to massively rely on imports to feed its consumption.
India has a thriving range of industries for semi-processed and value-added timber products, including
wooden handicrafts, pulp and paper, plywood and veneer and wooden furniture. Exports of wooden
handicrafts in particular are on the rise. While India is one of the world’s top producers of tropical logs,
it is also one of the world’s largest consumers of wood products. This is mainly due, however, to the
sheer size of India as its per capita consumption of wood is very low.
• The volume of products manufactured by the European sawmills and traded with India is still
relatively minor. In 2017, according to Eurostat, the EU 28 countries exported to India around
321 thousand tons of sawn softwood and 30 thousand tons of sawn hardwood. These figures
are much lower than volumes exported to China: in 2017, the EU 28 countries exported to
India around 1626 thousand tons of sawn softwood and 653 thousand tons of sawn hardwood.
These data show that there is untapped potential. A factor that is probably hindering higher
exports of wood products to India is tariff barriers to trade. According to the Market Access
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European Organisation of the Sawmill Industry aisbl
Database of DG TRADE, India levies duties of 10% on products which are of particular interests
to the sawmill industry such as those that fall under HS 4407 (sawnwood) and HS 4418
(builders' joinery and carpentry of wood).
Conclusions
EOS calls for a balanced economic cooperation with India that would also consider measures to
increase the export of European sawnwood to India. India is traditionally a high producer of tropical
hardwoods, but, as it was emphasized at the International Softwood Conference of 2016, there is
evidence of increasing interest of consumers towards non-tropical species. A higher consumption of
sustainable European wood products would help India tackle the pressing issue of climate change and
satisfy changing consumers’ tastes. Eliminating barriers to trade would lead to a win-win outcome both
for the Indian and the European economy. In a spirit of reciprocity and mutual benefit, EOS calls for an
agreement that takes into account international standards to which both sides have committed,
including those set out within the framework of the World Trade Organisation (WTO) and International
Labour Organisation.
6.11.7 European Commission Promoting an Active Policy Towards China

In March, the Commission published a Communication entitled “EU-China Strategic Outlook” which aims to rebalance
the relationship between the EU and China.
EOS SUMMARY OF THE EUROPEAN COMMISSION COMMUNICATION EU-CHINA – A STRATEGIC OUTLOOK
Against the backdrop of China’s growing economic power and political influence, the European Commission and the
High Representative review European Union-China relations and the related opportunities and challenges. They set out
10 concrete actions for EU Heads of State or Government to discuss at the European Council of 21 March.
In order to maintain prosperity, values and social model over the long term, there are areas where the EU needs to adapt
to changing economic realities and strengthen its policies. Based on clearly defined interests and principles, the EU
Commission recognises that the EU should also seek to deepen effective and coherent engagement with China. Given
the importance of EU-China economic relations, it is important to maintain very close trade and investment links, while
developing a more balanced economic relationship.
The Communication argues that there is a growing appreciation in Europe that the balance of challenges and
opportunities presented by China has shifted. In the last decade, China’s economic power and political influence have
grown with unprecedented scale and speed, reflecting its ambitions to become a leading global power.
China can no longer be regarded as a developing country. It is a key global actor and leading technological power. Its
increasing presence in the world, including in Europe, should be accompanied by greater responsibilities for upholding
the rules-based international order, as well as greater reciprocity, non-discrimination, and openness of its system.
To this end, The EU’s response should be based on three objectives:
• Based on clearly defined interests and principles, the EU should deepen its engagement with China to promote
common interests at global level.
• The EU should robustly seek more balanced and reciprocal conditions governing the economic relationship.
• Finally, in order to maintain its prosperity, values and social model over the long term, there are areas where the EU itself
needs to adapt to changing economic realities and strengthen its own domestic policies and industrial base.
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Specifically, the Commission invites the European Council to endorse the ten actions, some of which can be considered
relevant also for the EU Sawmill Industry:
• Action 2: In order to fight climate change more effectively, the EU calls on China to peak its emissions before 2030, in line
with the goals of the Paris Agreement.
On climate change, China is at the same time the world’s largest carbon emitter and the largest investor in renewable
energy. The EU welcomes the role of China as one of the main brokers of the Paris Agreement. At the same time, China
is constructing coal-fired power stations in many countries; this undermines the global goals of the Paris Agreement.
China is a strategic partner on climate change and the clean energy transition, with whom we need to continue
developing a strong relationship, given the sheer size of its emissions (around 27 % of the global amount),
which continue to rise. A commitment by China to peak its emissions before 2030 would give new impetus
to fighting climate change in line with the Paris Agreement and inspire action globally. In addition, the EU and
China should strengthen their cooperation on sustainable finance, to channel private capital flows towards a more
sustainable and climate-neutral economy.
• Action 4: To preserve its interest in stability, sustainable economic development and good governance in partner
countries, the EU will apply more robustly the existing bilateral agreements and financial instruments, and work with
China to follow the same principles through the implementation of the EU Strategy on Connecting Europe and Asia.
European companies face a lack of level playing field when competing in third countries’ markets with Chinese companies
enjoying access to state backed loans and export credits at preferential terms and applying different corporate and
labour standards. In this light, the EU should continue to promote stability, sustainable economic development, and
respect for good governance, in partnership with third countries and with even greater vigour.
The EU’s Strategy on Connecting Europe and Asia provides a clear framework for confident engagement with the EU
partners, enabling the Union to seek synergies between the EU and third countries, including China, in transport, energy
and digital connectivity, on the basis of international norms and standards. The key principles of EU’s engagement on
connectivity are financial, environmental and social sustainability, transparency, open procurement and level playing
field.
The EU-China Connectivity Platform represents an initial opportunity to strengthen cooperation and work in
reciprocal and transparent ways, and should be expanded. It aims at promoting sustainable transport corridors
based on the principles of the Trans-European Transport networks policy. The imminent launch of a study on railway
corridors, between the EU and China, exemplifies the possibility of creating synergies with the TransEuropean Transport
network policy.
• Action 5: In order to achieve a more balanced and reciprocal economic relationship, the EU calls on China to deliver on
existing joint EU-China commitments. This includes reforming the World Trade Organisation, in particular on subsidies
and forced technology transfers, and concluding bilateral agreements on investment by 2020, on geographical
indications swiftly, and on aviation safety in the coming weeks.
China has also increasingly become a strategic competitor for the EU while failing to reciprocate market access and
maintain a level playing field. China’s growing economic weight increases the risk for the global economy of negative
spill-overs from distortions in China’s economic system and from possible sudden economic downturn. Given the
magnitude of EU trade and investment links, it is important to develop a more balanced and reciprocal
economic relationship. This can be achieved through various means: by working together with China in international
fora to upgrade the rules and by making decisive progress in bilateral negotiations, but also by making use of tools such
as the recently modernised and strengthened trade defence instruments.
• Action 6: To promote reciprocity and open up procurement opportunities in China, the European Parliament and the
Council should adopt the International Procurement Instrument before the end of 2019.
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EU companies often encounter difficulties to gain access to procurement opportunities in the Chinese as
well as other foreign markets, in particular in sectors where EU companies are highly competitive (e.g. transport
equipment, telecommunications, power generation, medical equipment and construction services). This protectionist
trend is rising.
• Action 7: To ensure that not only price but also high levels of labour and environmental standards are taken into
account, the Commission will publish guidance by mid-2019 on the participation of foreign bidders and goods in the EU
procurement market. The Commission, together with Member States, will conduct an overview of the implementation of
the current framework to identify gaps before the end of 2019.
• Action 8: To fully address the distortive effects of foreign state ownership and state financing in the internal market, the
Commission will identify before the end of 2019 how to fill existing gaps in EU law.
EU policy tools do not fully address the effects within the EU internal market of subsidies granted by foreign
governments. EU competition policy instruments apply without discrimination to all economic operators, irrespective
of their origin. EU state aid rules only cover aid granted by Member States. Further, EU merger control does not allow the
Commission to intervene against the acquisition of a European company solely on the grounds that the buyer benefitted
from foreign subsidies. Trade defence instruments address subsidies that affect the price of products imported into
the EU. However, these instruments do not cover all potential effects of unfair subsidies or support by third
countries. To close this gap, it is necessary to identify how the EU could appropriately deal with the distortive
effects of foreign state ownership and state financing of foreign companies on the EU internal market.
On the 9th of April, a EU-China Summit took place, A Common Statement about the EU-China Summit was
providing a forum for engagement at the highest level and published. Please find attached copy of the EU-China
for advancing the relationship as regards the bilateral and Summit Joint statement (Annex 3). The following passages
multilateral agendas. The shared objective of equitable are of particular relevance for the European sawmill
and mutually beneficial cooperation in bilateral trade and industry:
investment was one of the key topics discussed. The EU The EU and China will continue to enhance practical
and China reiterated their willingness to provide each cooperation, so as to foster fair competition in the market
other with broader, non-discriminatory market access. for operators of all countries, including the companies of the
The EU and China have also signed a Memorandum of two sides, and promote the sound growth of the bilateral and
Understanding on a dialogue in the area of the State Aid global economic and trade relations.
Control and the Fair Competition Review. The EU and China underline their strong commitment to
The State aid dialogue is a mechanism of consultation, implement the Paris Agreement and the Montreal Protocol,
cooperation and transparency between China and and, given the urgency to take domestic and international
the EU in the field of State aid control. This dialogue action to effectively provide a global response to the threat of
will further the EU and China’s mutual interest and joint climate change, to further intensify their cooperation on the
work to promote fair global competition. It is also part basis of the 2018 joint Leaders’ Statement on Climate Change
of the Commission’s broader strategy to address the and Clean Energy.
distortion that national subsidies policies put on a global The EU and China recall that carbon pricing and fossil
level playing field where companies can compete on their fuel subsidy reform are key steps in this regard. In this
merits. The Agreement on the Terms of Reference of the context, the EU and China will reinforce their cooperation
EU-China Competition Policy Dialogue, also agreed on green finance in order to harness private capital flows
at the Summit, has the aim to facilitate requests to towards a more environmentally sustainable economy. Both
investigate alleged anti-competitive behaviour. The sides will work together for a successful outcome of the UN’s
Agreement acknowledges that the EU and China share Sustainable Development Goals and Climate Action Summits
a common interest to minimise any potentially adverse in September 2019.
effects of enforcement activities on each other’s interests. The EU and China stress the importance of showing
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resolve on the clean energy transition and of assuming The EU and China will cooperate to improve the economic,
greater leadership on the global environmental agenda. social, fiscal, financial and environmental sustainability
Both sides will actively implement the Memorandum of of Europe-Asia connectivity and interoperability. The two
Understanding on Circular Economy cooperation and sides will continue to forge synergies between the EU
promote practical cooperation between industries. Both strategy on Connecting Europe and Asia as well as the
sides recognise the importance of cooperation in addressing EU Trans-European Transport Networks and China’s
global environmental challenges, including pollution and Belt and Road Initiative, and welcome the agreement, in
marine litter. Both sides are willing to deepen cooperation on the framework of the EU-China Connectivity Platform, on the
issues such as halting biodiversity loss, CITES implementation terms of reference for the Joint Study on sustainable Railway-
and enforcement, combating illegal trade in wildlife and based Corridors between Europe and China. The two sides
wildlife products, sustainable forest management, will enhance communication within the framework of the EU-
combating illegal logging and associated trade, as well China Connectivity Platform.
as desertification and land degradation.
Photo: EOS Picture
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7. High Level Conferences

co-organized by EOS
The International Softwood Conference (ISC) and the (IHC) is a biannual event. The conferences are organized in
International Hardwood conference (IHC) are co-organized turn by a member federation of EOS or ETTF: this means that
by EOS and ETTF, which are also the holders of the events. the conferences take place every year in different countries,
The International Softwood Conference (ISC) is organised which are usually decided one year in advance.
annually, instead the International Hardwood Conference
7.1 The International Softwood Conference

The 66th INTERNATIONAL SOFTWOOD CONFERENCE was Conference offered to get market analysis from the
held from 10th to 12th October, 2018 in Riga, Latvia. The perspective of top-class international speakers. The
2018 International Softwood conference was hosted by presentations were focused on facts and figures showing
the Latvian Timber Traders & Producers Association, the softwood production as well as consumption in the most
European Timber Trade Federation (ETTF) and the European relevant timber markets such as USA, Canada, North Africa
Organization of the Sawmill Industry (EOS). and Egypt, Russia, France, China and other.
The 66th International Softwood Conference attracted over 200 participants.
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The development of production and consumption suggests However, some elements may cast a shadow on an this
that the nice pace of growth which was observed in 2017 relatively rosy picture: both presidents emphasized that
and the beginning of 2018 is expected to continue into the the uncertainty surrounding Brexit could take its toll on
rest of the current year. While the situation for 2019 looks the British economy, which could result in decreasing
good, there are some darkening clouds on the horizon. import volumes. A fully-fledged trade war between the US
and China is another potentially destabilizing factor. Mr
In Europe most markets are on the rise, with strong demand Auvinen and Mr von Möller also stressed that there might
across the continent. Mr Andreas von Möller, President of ETTF, be a risk of overheating in the construction sector. Even
provided a comprehensive overview of the construction activity more importantly, there are challenges connected to
in Europe, showing that the confidence index is going up and raw materials: supply problems are limiting the potential
the production index has reached the highest levels since growth of production. In the short term, the availability of
2010. The wood door sector is also doing well, whereas the roundwood is indeed tight in many European countries. A
window door sector is stable. Mr Sampsa Auvinen, President very hot summer and a locally stormy autumn worsened
of EOS, underlined in his presentation that the European the quality of supply causing the presence on the market
demand has been very lively over the last few months and of many logs damaged by pests and storms, in addition to
is set to remain so in the short run. A buoyant construction record-high forest fires in many EU countries. In the long
activity is indeed pushing up European demand to the highest term many factors, including - but not limited to - climate
levels of this decade – and medium-term positive forecasts change, may limit the supply of softwood in many parts of
justify the moderate optimism. The financial performance of Europe.
the European sawmilling industry is solid and investments in
operation improvements are taking place.
In the picture, a moment of the panel discussion on forest certifications.
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2018 ISC. Visit to sawmill “Vika Wood” Ltd. 2018 ISC. Nurserie Norupe.
While lively European markets remain the traditional In sum, in 2018 there are many reasons for the industry to
destination of European production, an ongoing trend be satisfied. Overall, demand in both internal European
points to increasing importance of overseas markets markets and many faraway destinations keeps growing.
for many European companies. The area of the world However, a recurrent theme of this year’s International
which stands out is Asia, particularly China, which after a Softwood Conference has been that in the past abrupt
booming 2017 has somewhat slowed down in 2018. Japan falls have followed euphoric periods. According to many
as well remains an important export destination for many stakeholders 2019 is set to be a year of consolidation of the
European sawmills, while some North African markets are growth achieved in previous years, but since there are many
recovering following a couple of negative years. Exports to tailwinds in the global political and economic context, a
the US have skyrocketed at the beginning of the year, but slowdown cannot be ruled out.
the consensus was that there is not much scope for further
growth of deliveries to the US. The long-term potential of On Tuesday, the 9 October, the International Softwood
the market is impressive as per capita consumption in some Conference was anticipated by the visit to sawmill “Vika
of the fastest growing countries in the world is still very low Wood” Ltd, to sawmill “Kurekss” Ltd. While on Wednesday,
compared to North America and North European countries. the 10th October, the ISC participants had the opportunity
to visit the sawmill Smiltene Impex and the Rīgas Meži
In the afternoon of the first day a lively panel discussion sawmill & nurserie Norupe.
took place between representatives of forest certification
schemes, FSC and PEFC, representatives of ETTF and EOS The next edition of the International Softwood conference
and of the Confederation of the Private Forest Owners. A will take place in Antwerp on 16-18 October 2019.
frank and constructive exchange of views confirmed the For more information and to download the 2018 ISC
importance of sourcing sustainable wood materials while presentations please visit the website: http://ettf.info/
guaranteeing a clear and feasible chain of custody system. isc2018

KEY MESSAGES of the International Softwood Conference 2018

WHEN, HOW AND WHERE THE NEXT CRISIS WILL START?, KĀRLIS DANĒVIČS, SEB BANKA, CHIEF RISK OFFICER
The presentation of Mr Danēvičs is the first one of the ISC • Drawing from an example of the Baltic Region, he
2018. He provides an insightful overview of the international notices that the Baltic States before the 2007-2008
economy, trying to individuate some imbalances that might global economic crisis were growing very fast; but the
lead to the next global recession. accumulation of risks and imbalances led to a big fall,
The most significant take-home messages of his from which they slowly recovered. Conversely, Poland
presentation are the following: was growing at a slower pace but managed to avoid a
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crisis – the only European country to record positive GDP • Statistically, moreover, every now and then recessions
growth rates in the toughest year of the crisis – by having happen. Now, we are already 10 years since the previous
a more balanced growth. It seems that these days this crisis, so it is more and more likely that at some point a
lesson tends to be forgotten. new recession will take place.
• He adds that there were four factors that led to the crisis of • Geopolitical uncertainties, a crisis in China, Cybercrime
ten years ago: Too sharp growth in credits; unsustainable and IT disruptions, and real estate markets are some of
current account deficits; Labor costs growth > labor the possible causes of the next crisis.
productivity increase; Overheated real estate market. • There are many indicators that show that the global
He states that some countries already have a number of economy has passed the peak and it is slowing down.
these imbalances. Turkey has all four of them. • Emerging markets have been having a mixed performance:
• In general, he notes that crises often arise as a result of India and China are still growing fast, but a stronger US
irrational decisions of human, who during booms are Dollar, the looming trade war, and a Chinese deceleration
prone to think: “this time is different”. But history repeats are significant downside risks. In Russia the recovery is
itself, and economic crises keep happening. weak and sanctions threaten the rouble.
• He notices that demand fall is the primary reason for • Overall, with the exception of Europe, private debt is
downfalls to be triggered (examples: Nokia, Kodak). growing in many large economies, including the US and
• He notices that the price/earning ratio is very high. Even in China.
2007 and in 1929 it was also impressively high.
MARKET DEVELOPMENTS - EUROPEAN USERS, ANDREAS VON MÖLLER

(EUROPEAN TIMBER TRADE FEDERATION PRESIDENT)
Mr von Möller analyzes the softwood market from the user • In Denmark, the economy is also doing fine, and imports
side. He starts his presentation by focusing on construction and consumption are on the rise. However, a combination
activity, which at EU level has been growing for some years. of diminishing stockpiles in Sweden, an unusually dry
Italy is still suffering, while France even though it is still summer with risk of forest fires and increasing demand for
below the level of 2010 is recovering. Germany has slightly pulpwood for the paper industry is challenging the supply
slowed down from a relatively healthy level whereas the UK side.
is doing fine. In addition to this, confidence is high in most • In France, the year 2018 has been a satisfactory one until
of the big European countries. Building permits have been now. The building sector has been growing, but it is now
increasing for three years. expected to stabilize. Innovative products such as CLT and
The door sector at EU level is recovering ground (+6% in 2017 glulam are enjoying growing sales and replacing traditional
vs 2016, highest level in 10 years), with Netherlands, Italy, products. GDP growth is expected at 1.8% in 2018.
Poland and Spain doing particularly well. A slight decline was • While the Belgian economy has been doing quite well, the
observed only in the UK. Wood windows production is slightly local industry instead has several challenges, including
increasing (+2%); Austria, Italy, Poland are doing well while the the impact of Brexit, a weak furniture sector, the presence
UK keeps declining. The wood window sector has overall a 15- of bark beetles, and a shortage of skilled workers. Overall,
20% market share in the window market across Europe. however, many segments of the woodworking industry
had a good H1 2018, especially the construction elements.
Mr von Möller goes on to make a one-by-one country review. • In Spain, the construction activity is developing well.
The current situation is acceptable in main cities. But
• In the Netherlands, he argues, there is a positive general consumption is still limited mainly to renovation sector.
perception. GDP growth is solid, unemployment is very Softwood imports are expected to increase, but there are
low, and the housing sector is doing fine. Imports and many downside risks in the economy.
consumption of softwood, following some difficult years • In Italy the construction industry is doing fine, and
have now been growing for three years. However, there is the timber markets in the first part of the year were
a shortage of workforce which can have a negative impact satisfactory. There is caution and uncertainty regarding
on the sector. the future.
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• In the UK 2017 and 2018 were positive. Both production In sum, Mr von Möller argues that the general situation in
and consumption of softwood were on satisfying levels, Europe is positive in 2018 (following a very good 2017).
benefiting from a lively construction sector. However, While there are many elements that may lead to believe in
Brexit casts a shadow for the future. a positive 2019, there is an abundance of downside risks
• The German economy is in a very long economic that imposes caution. Risks include, but are not limited to,
upswing; non-stop since 2014. Private consumption is a poor quality of logs due to bad weather, a chaotic Brexit,
strong, and the job market is excellent. In H1 2018 German an intensification of the trade wars, a real estate bubble.
timber trade was at +5.6% vs H1 2017. The sales growth A feature common to many EU countries is the shortage
in the wood construction sector is a key driver. There is of skilled workers, which prevents the industry from fully
moderate optimism for 2019 but also in Germany there is taking advantage of the present high demand.
a shortage of skilled workers.
MARKET DEVELOPMENTS - EUROPEAN PRODUCTION, SAMPSA AUVINEN

(EUROPEAN ORGANISATION OF THE SAWMILL INDUSTRY PRESIDENT)
The third presentation is given by EOS President Sampsa

Auvinen, who focuses his presentation on the European
producers. He begins by stating that the industry has been
going through a long and positive cycle, but cautions that
at some point this will be over. While at the end of 2017
the situation looked very balanced, there are now some
elements of imbalance. The main take-home messages of
his presentation are the following:
• Demand is strong in Europe, and prices are on a very

satisfactory level. However, production could not really
keep up. It did increase but not as much as it could have
due to raw material challenges: a hot but stormy summer- • Raw material prices increased in 2017 and slightly
beginning of autumn in many parts of Europe damaged the declined at the beginning of this year. However, they
quality of many logs. Pests are very widespread (especially remain on lower levels than the ones recorded in the
in Central Europe) and forest fires were observed in many period 2010-beginning of 2015.
parts of Europe. Presently the conditions are not suitable • The macroeconomic situation in Europe looks relatively
to increase capacity. good and economic growth should continue at a moderate
• He analyzes production in Europe with a particular focus on pace. A satisfactory development in construction activity
the EOS countries, where, total production of sawn softwood across Europe is welcome by the industry. Construction
increased by 1,3% in 2017 and reached 79,6 million m3. activity is expected to slow down in the short and medium
In 2018, production is expected to increase 2,55 % to 81,7 term, but it should still remain in positive territory. The
million m3 and in 2019 0.9% to 82.5 million m3. Germany is picture is quite rosy as far as Europe is concerned, but
having a positive 2018 and there are good signals even for Brexit could spoil this.
next year. Austria’s production will increase this year and • Regarding China, in 2018 European producers have been
possibly go up even next year. France’s production has been losing market share to Russia; overall, China’s imports
growing for two years while Switzerland remains stable. will probably keep growing and it remains a fundamental
Sweden’s production is expected to be stable in 2018 and market player for many European exports. There is
to grow in 2019, whereas Finnish production will increase to increasing evidence, though, that Chinese statistical data
reach 12 million m3. Norway’s production is slightly growing, describing the state of the economy are suspect, maybe
remaining on very high levels, while Romania’s production even dodgy. However, the government has made it clear
has slightly declined in 2018. In the Baltics, Latvia’s that it intends to foster private consumption, which bodes
production is expected to slightly grow in 2018. well for our industry.
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• Japan, despite an aging population, remains a very drop in imports occurred in 2007 and do not wish to
important export market for Europe. Housing starts expose themselves too much, prices are also very volatile.
declined a little bit and the import during January-July Fundamentals remain good, though.
2018 totaled 3.53 million m³ (-3.0% vs Jan-Jul 2017) • There is good financial health across the industry.
• Overall, it looks like in Asia – not only in China and Japan • Currencies movements lately have not been as important
– the appetite for softwood is growing. Considering that as they used to be, but there are chances they in the
the relative per capita consumption is relatively low, the near future trade will be more strongly influenced by
scope for growth is enormous. Apart from the two giants, appreciation or depreciation of currencies.
South Korea is currently the most important market, but
India has the potential to become a very relevant market In sum, Mr Auvinen argues that:
as the economy grows ➡ European economy is on a stable growth pattern.
• The MENA area remains also very important: The MENA ➡ Global demand of sawn timber will continue to increase.
region’s economies are picking from low levels. The ➡ Exchange rate fluctuations have not bothered the
region has had difficult times due to political uncertainty industry too much lately, but will continue to affect the
and low oil prices but it seems that activity is improving. industry in the future.
International funding is coming to Egypt for large ➡ Financial performance of the European sawmilling
infrastructure projects as the economic climate improves. industry is good and investments in operation
• The US market is importing annually about 2 million m3 improvements are taking place.
rom Europe, back to pre-crisis levels. Swedish and German ➡ Raw material availability will limit European production
mills are especially active in that market. However, the growth going forward.
consensus within the industry is that exports to the US ➡ Prices for raw material and sawn timber will likely
will plateau. Many companies still remember the sharp continue to increase…
CANADA, DAVID CALABRIGO (SENIOR VICE PRESIDENT, CORPORATE DEVELOPMENT, LEGAL AFFAIRS AND CORPORATE
SECRETARY CANFOR CORPORATION)
Mr Calabrigo presents the Canadian market. He shows • Further endorses lumber as a green building material
that in British Columbia (Western Canada) in the medium • Promotes wood use in government funded projects like
and long-term the supply of logs will decrease, and mills schools, nursing homes and social housing
will have to adjust. He shares his concerns regarding a rise • Stimulates more multi-story hybrid buildings
of forest fires – the last two seasons recorded the highest • Sets up “green supply chain” for the industry
amount of forest fires. On the other hand, demand is strong
and renewable, sustainable products, like wood products, He states that in North America, labour shortages are driving
will displace non-renewable and energy-intensive product, a move toward the industrialization of home construction,
and demand is expected to further grow as a result. There which includes modular and prefabricated housing: this is
is an increasing recognition of the contribution that wood also a welcome development. Across many countries, there
products give when it comes to fighting climate change. is nice growth in mid-rise and tall wood construction and
Also, in the long-term, huge countries such as China and there is the opportunity to expand the wood products used
India are expected to increase consumption: presently their through collaboration with the steel and concrete industries
per capita consumption of sawnwood is very low, and the in hybrid construction models.
potential for growth is huge. The next big market promises For lumber producers, a move to modular and prefabrication
to be India, where there is huge potential given the very low brings new requirements for quality and consistency in
per capita wood consumption compared with European or products. In the future he thinks that it will be key to diversify
North American countries. China is diversifying its imports and to offer a nice range of products: the suppliers who will
and all levels of governments are focused on promoting succeed to do this will have access to additional markets
prefabrication building. Its Prefabrication Construction and margins.
Initiative offers many benefits for the sawmill industry, as it:
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He concludes with a note of optimism: • Innovation is entering the construction sector in a

• Demand is strong and sustainable meaningful and transformative way.
• Sawmill products are being used in new and innovative The industry needs to make sure to protect its market share
applications. from rival materials.
USA, MARC BRINKMEYER (IDAHO FOREST GROUP CHAIRMAN)
Mr Brinkmeyer’s presentation is also about North America, Mr Brinkmeyer then talks about the Softwood Lumber
but his focus is rather on the US. First, he briefly mentions Board (SLB), which is an industry-funded initiative
that in the North Western part of the United States, many established to promote the benefits and uses of softwood
forests are at risk. The necessity to take care of forests is one lumber products in outdoor, residential and non-residential
of the recurring themes of this years’ conference. construction. Programs and initiatives supported by the
Mr Brinkmeyer then shows that in spite of negative SLB focus on increasing the demand for softwood lumber
predictions of most economists, the economy under products in the US. The SLB is solely involved in growing
President Trump’s Administration is doing well so far. markets for softwood lumber, and does not discuss or in any
However, federal deficit is accumulating as a result of way become involved with any government policy or trade
aggressive tax cuts. Mr Brinkmeyer praises some members dispute. In the first half of 2018, the SLB’s investment have
of the Administration, who are very close to the forest- generated 592 million board feet of incremental demand,
based industries. He shows that housing starts have grown well ahead of last year (468 million bf). An example of how
if we look at the past few years, but we are still way below SLB is pushing the boundaries and perceptions of where
historical levels. He lists factors which led to a sharp increase wood can be used: the SLB partnered with the United
of lumber prices at the beginning of 2018: States Department of Agriculture to fund blast testing of
CLT and nail-laminated timber (NLT) structures. As a result
• In 2017 the lumber market experienced multiple events of the successful tests, the US Department of Defence has
that pushed the market to the extreme high end of the commissioned mass timber hotels on Army bases around
historical price range. the country.
• Buyers fear of a pullback kept speculative purchasing to
a minimum which combined with good consumption has Mr Brinkmeyer then shows that other materials, such as
resulted in the pipeline being extremely thin the last six steel and concrete, are very active in trying to damage the
months. reputation of wood. Finally, he lists actions that will be
• Production did not respond to the higher margins like it prioritized by the SLB:
does normally due to a combination of factors (long wet
spring followed by an early and severe fire season) that • Protect the current share in established market segments
restricted resource availability. and newer ones.
• Prior major market moves of this magnitude have always • Prioritize conversion of projects to wood in the 1 - 4 story
been followed by an equally (or deeper) pullback as the (non-residential), 5 & 6 story, and 7 – 12 story segments.
run up. • Support and promote innovative buildings that showcase
• Prices abruptly fell in recent months, making the market the capacity of wood construction.
very unstable. • Expand market acceptance and use of lumber-based
mass timber construction in larger and taller buildings.
Housing starts, thanks to the increase of single-family starts • Pursue market promotion initiatives beyond the United
mainly (which is good for the industry), are expected to States.
increase over the next couple of years and lumber demand
will also increase. Production is expected to grow, too, but
not as much as demand: imports as a result will probably
need to grow (including imports from Europe). As it is the
case in many European countries, even in the US there is a
significant labor shortage.
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NORTH AFRICA, GUILLAUME HOTELIN (DEPUTY CEO, GROUP ROBELBOIS)
Mr Hotelin presentation is about the MALT region (Morocco, • Algeria: uncertainty regarding future trajectory, excessive
Algeria, Libya, Tunisia). The region shares many features red tape. A high dependence on oil exports caused a
(such as the burgeoning demographics) but all countries shortage of hard currency which pushed governments
have their very specific aspects. He notices that since the to reduce imports. From April 2017 and import licenses
oil prices dropped in 2014 the imports of sawn softwood system were in place, but licenses were initially not
also dropped by 38%, interrupting a steep growth trajectory granted and even in Autumn 2017 covered only part of
which began in the previous decade. The estimates for the real need. Sawn softwood can be freely imported again
next couples of years however are slightly more positive: oil since January 2018. Forecast for 2018 is 1.4 million m3 of
prices are picking up and in both 2018 and 2019 growth will sawn softwood imports, down from 2 million of 2015.
finally resume (barring a major political crisis). • Tunisia: economy diversifying, political transition
Imported species by MALT countries include pine (redwood, ongoing. But high unemployment rate (common factor in
62% of all imports) spruce (33%), and maritime pine many countries across the region) and security and safety
(7%). Top exporters to MALT region are 3: Sweden, which issues negatively impacting on tourism, which is very
maintains a share of around 36% of exports in 2017, Finland, important for Tunisia. Decline of imports in the last few
with a growing share of 29%, and Austria, with a share of years but expectations are of slight increase for 2019 at
around 23%. almost 300,000 m3; preference for low grade, and, like in
Mr Hotelin then proceeds to make a one-by-one review of Morocco, tendency to use substitutes
the MALT countries: • Lybia: Smaller market, country devastated by civil war.
Necessity to rebuild infrastructure and housing, imports
- Morocco: a relatively stable political and macroeconomic at around 30,000 m3 in 2017 down from almost 400,000 m3
picture, trying to diversify imports but there are high social in 2013. Growth foreseen over the next few years, but
and economic disparities. Construction sector underwent imports still below 100,000 m3. Thus, there is potential if
a slowdown since 2012, sawn softwood imports hovering peace is fully restored.
around slightly less than 1 million m3 for some years. Slight
growth of imports expected in 2018 and 2019 but a danger In sum the region has potential but many factors are
consists in the fact that materials such as PVC are more and negatively impacting over the last few years. Growth
more used. of imports is expected to resume, but more and more
substituting materials are entering the market.
RUSSIA, SVYATOSLAV BYCHKOV (ILIM TIMBER MANAGING DIRECTOR)
Mr Bychkov’s presentation is about Russia. He begins his in 2017 (2016: 24 million m3) up from 5 million m3 at the end
presentation by stressing that currencies volatility really had of the ’90. Russian domestic consumption was around 9.5
a strong impact on softwood lumber trade, at least when million m3.
it comes to Russia as the ruble over the last few years has
been very topsy-turvy. China softwood saw log imports from Russia account for
85-90% of total Russian saw log exports and consists mainly
Mr Bychkov then stresses that the Russia forest resources from high quality Siberian pine Ø 30 cm and larger. Finland,
are sharply growing, particularly in Siberia and the Far East. Sweden and Germany are the major European importers of
saw log from Russia, mostly high quality 6 m Spruce. He also
Russia industrial roundwood exports peaked in 2006- emphasized that:
2007 with around 50 million m3 exported but then the
combination of customs duties with government support • On December 12th, 2017 Russian Government ratified the
for investments in wood processing limited log exports quota for logs export in the Far East Decree #1520), and
which stabilized around 20 million m3 over the last few years. customs duty elevation in 2019-2021 (Decree #1521).
Sawn softwood exports reached, instead, 27 million m3 • Customs duty to reach 40% in 2019 and 80% in 2021
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which will make log exports without quota economically forest lease rate made the industry much less attractive for
unfeasible. investments. An electronic system for monitoring of round
• The major export destination which will be negatively wood turnover on federal level started to operate successfully
affected by duty increase is China. in 2015 and on sawn timber July 01, 2017. There are 47,5
thousand authorized users in 2018.
In 2017 Russian exports of sawn softwood to China reached
15.5 million m3 (up from 12.8 million m3), which more than Finally, he concludes that:
compensated a decline of 9% to MENA (to 2.5 million m3)
and of 2% to the CIS countries (to 3.27 million m3). Exports • China remains the key market for Russian log and lumber
to Europe reached 3.57 million m3 in 2017 up from 3.46 with increasing share of lumber exports.
million in 2016. • Introduction of the new capacities and redistribution of
volumes from MENA and domestic market leads to growth
Mr Bychkhov also informs participants about the latest policy of sawn timber export volumes from Russia to China.
measures in Russia: the Russian Government has approved in • Sustainable demand and stable prices in China are driving
September 2018 a Strategy for the wood processing industry development of sawmilling capacities in Russia both in
development (cluster approach, further processing, pulp and the North West and Siberia & Far East.
paper production development) targeting 2,5 times growth • Short term competitive advantage with Ruble devaluation
of added value for 1 m3 of raw material. The Strategy is on was finished in 2H’2016 and Ruble strengthening in 2017
hold at the moment as after an unexpected 44% increase of brought margins to low level.
LATVIA, ARNIS MUIŽNIEKS (BOARD MEMBER, THE CONFEDERATION OF EUROPEAN FOREST OWNERS (CEPF))
Mr Muižnieks’ presentation is centered on forests. He invites ➡ NGO initiatives: they often convey a message by which
all participants to reflect on the fact that many softwood trees are only good if left standing. They really influence
species will shrink in the future in Europe, in particular in popular opinion and even the United Nations logo
Central Europe. stresses the non-timber values of forests.
He states that forest owners are confronted with a
challenging environment for a number of reasons: From the economic point of view the picture is more mixed.
There are indeed some reasons to be optimistic: for instance,
Environment: research and development will increase productivity.
➡ Climate: global warming is taking/will take a heavy toll
on European forests: as a result, pests are on the rise and Mr Muižnieks shows a chart about the increase of
a change in the composition of forests is ongoing broadleaved woodland which is taking place in practically
➡ Wildlife: many forests are more and more damaged by all European countries. He also stresses that we need to
wildlife (especially pine trees) find more incentives for forest owners to become active
managers. In general, he observes that forests compared
Social: with some decades ago have many more functions, which
➡ Urbanization: a more and more urban population sees increases the costs for forest managers.
the forest not as something to be managed according Finally, he argues that all these challenges are compounded
also to economic criteria, but mainly as a recreational by forest certification: the majority of the private forest
resource. Urban population sees a cut as the end of a owners perceive forest certification as additional financial
forest, while foresters see it as a new beginning – with burden with no financial return. Forest sector is driven by
roundwood entering the economic system. strict national and international regulations. Nevertheless,
➡ Legislation: EU forest policy is a scattered puzzle of in the past years private forest owners face situations when
different, and at times conflicting priorities. This creates certification is being enforced.
confusion by forest owners. Even national legislation
sometimes is confusing.
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EGYPT, IBRAHIM ELSHAL (ELSHAL TIMBER CEO)
Mr Elshal gives a presentation about the situation in Egypt. as the majority of Egyptians cannot afford the very high
He reminds that Egypt is a young country with a burgeoning housing prices in the new cities and new housing projects.
population (around 100 million people and projected to Mr Elshal than proceeds to analyze the softwood market:
grow) and no forests, so it is structurally a very important sawn softwood imports grew by 4% in the period Jan-Jul
markets for sawn softwood exporters and while there might 2018 compared with the corresponding period of 2017 to
be political and economic challenges, it will always need to 2.1 million m3. Finland retains the leadership for the second
import a lot of sawnwood. In 2017, Egypt imported 4 million year running with 800,000 m3 exported (+13%), followed by
m3 of sawn softwood, which is tantamount to 41% of total Russia with 660,000 m3 (+29%) and Sweden with 490,000 m3
Middle East and North Africa (MENA) imports. (-28%). Regarding prices, they were rising from the beginning
of 2017 until May-June of 2018, then they stabilized and
Mr Elshal argues that the political situation in Egypt is stable, from end of August there was a slight decrease. At the end of
as President el-Sisi won the elections at the beginning September, stocks reached very high levels.
of 2018. Economic problems remain, but in the short-
term, the government borrowing strategy will postpone Mr Elshal then wraps up by summarizing what he said and
any severe crisis. The budget deficit was 11.4% of GDP offering predictions for next year:
in 2018, and while there is no longer a problem of scarce
foreign currencies reserves, a burgeoning debt is a source • The political and security situation will likely remain stable.
of concern. The economy in general and the construction • With the government economic strategy, no big crisis is
market in particular adjusted to the Egyptian Pound probably looming, but for the long-term the very high
flotation shock – the economic decision-makers decided to debt level is a concern.
end the Pound’s peg to the Dollar and as a result the pound • Infrastructure and public projects will probably progress
underwent a huge depreciation at the end of 2016, when at the same level.
then official rate was USD 1 = EGP 8.88 and in a few days it • The young and fast-growing population should keep
sank to USD 1 = EGP 19.5. Economic reforms are underway, housing demand high, but there is a concern about the
and the International Monetary Fund said at the end of high prices and balance between supply and demand.
September that Egypt’s economy shows signs of recovery. • Now, the Egypt softwood market is already oversupplied,
In the construction market there are several ongoing stockd are very high and this will affect volumes of imports
projects, including building from scratch new cities to and prices until Dec-18 or Jan-19.
accommodate the growing population. Mr Elshal thinks that • During Q1 2019, there will probably be a supply-demand
the planned ambitious projects are likely to continue but balance; then, prices are expected to reach relative stable
the falling purchasing power of the population is worrying levels, and after that imports volume will start recovery.
FRANCE, ARMEL CHAUMONT (INDUSTRIAL SALES DIRECTOR FRANCE - SCA WOOD)
The presentation of Mr Chaumont is about the latest

developments in the French sawn softwood market.
France is a mature economy, an important European
country with a population of 65 million people, and younger
than the average EU population. GDP growth in 2018 is set
to be at 1.8%, slightly below the EU average of 2.1%.
Forests cover 31% of the French territory, and two thirds of
forests are hardwood ones, 21% softwood and 12% mixed
forests. Timber production, however, is made up mainly of
softwood 83%.
35% of softwood production is certified, 12% is kiln-dried
(data from 2016). The low-share of kiln-dried goods is the
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reason why France does not export too much abroad: Mr Chaumont then goes on to show the promotional
less than 10% of production is exported, mainly to other activities which have been going on in France, such as
European countries. Pour Moi C’est Le Bois, which targets the construction
Exports of softwood logs to China are not concerning but and packaging markets also through TV spots and
rising. advertisements, and aims to promote wood products at
France imports considerable amounts of sawn softwood the heart of cities to make them more sustainable; another
from other European countries, mainly from Germany promotional tool is the website bois.com, which shows the
(430,000 m3 in 2017), Finland (390,000 m3), Belgium (335,000 different markets and products of the sector. In 2019 a new
m3), Russia (330,000 m3), Sweden (310,000 m3). project will aim to promote wood cladding, which will target
Consumption per capita is increasing but remains far from builders, designers, architects, journalists.
the peak achieved in 2007. By segment the construction Mr Chaumont argues that probably in 2019 there will be a
sector absorbs 40% of sawn softwood, followed by slight slowdown of construction but expects promotional
packaging, pallets, and concrete forming (27%). activities to bear fruits. 2019 according to Mr Chaumont
Construction in both the residential and non-residential will be a year of transition, barring a major political and
sector increased from 2015 until 2017 but this year it looks economic crisis.
like there will not be a growth. Unfortunately, it is the multi-
family home market (that consumes less lumber than the
single family one) which tended to grow.
CHINA, MATHIAS FRIDHOLM (BUSINESS PERFORMANCE MANAGER, SCA WOOD)
Mr Fridholm presentation is focused on the Chinese market. • 5% tariff on Douglas-fir logs,

First, he cautions the audience not to trust too much • 20% tariff on spruce logs, hemlock logs and hardwood
Chinese statistics and figures. He argues that the Chinese logs,
government is attempting to steer GDP growth more • 20% tariff on softwood lumber,
towards consumption than investment. • 20-25% tariff on hardwood lumber
China is a global leader in E-Commerce and Mr Fridholm
argues that this is becoming relevant also for our industry. Mr Fridholm sees a good future for sawn softwood in China:
The construction market is strong and growing since the government looks serious about the environment
2015. However, it is difficult to establish if this is a bubble. because it threatens the stability of the country. Therefore,
The Chinese currency appreciated last year, but in 2018 it wants to increase the consumption of wood.
depreciated again, which is not good for Chinese importers.
At any rate, he argues that prefabricated buildings will fit Overall, Mr Fridholm states that China is trying to become
very well in the Chinese market. more and more independent – the amount of wood from
The trade war with the US is gaining momentum and a 200 plantation forests that they will harvest in the next few years
Billion USD tariff scheme has been slapped by the US in is bound to sharply increase. However, there is no reason to
September, which includes a lot of wood products. China has believe that the importance of the Chinese market for many
retaliated against this and has published a list of products to European exporters will decline. Quite the contrary, there are
be tariffed. Wood products will have the following duties: many elements that are conducive to believe in an increase of
exports, barring a major political and economic crisis.
HUMAN RESOURCES, TOM AUSTEN (DIRECTOR, MILLER MCKENZIE)
Mr Austen’s presentation concluded the 2018 edition of the furniture, panel manufacture); in Europe the estimated
International Softwood Conference. number is between 2 and 2.5 million. Mr Austen wonders
how much investment and time companies devote to
Mr Austen states that at global level around 13.7 million secure long-term success, including human resources. A
people work in the wood-working industries (sawmills, recent global study held by ManpowerGroup, on over 38,000
211
employers around the world, found that a staggering 54% digital technology - which may require bringing executives
of companies are openly experiencing a talent shortage on board who are prepared for a digital world.
that has a medium or high impact on their ability to meet
client needs. Only 38% of global companies say they have Mr Austen then states that in the UK the percentage of
enough data about their workforce to understand strengths employees in the forest products sector older than 40 is 53%
and potential vulnerabilities from a skills perspective. This is and growing. Succession planning for an ageing workforce
probably even lower in the timber sector. Many employees are issues which need to be addressed. Few young people
feel that their skills are becoming obsolete. Industries around the world decide to choose timber as a career
will have to adapt to technological advances such as option: the sector is not sufficiently attractive. There are
digital technologies, which are precious when it comes to many functions nowadays in the forest-based industries
increasing productivity and improving cost-efficiency. They which can appeal highly-educated young professional. The
will also enable better understanding of clients wants and sector needs to do more to attract them.
needs. In this sense the forest-based industries seem to be In short, challenges are manifold: the forest-based industries
lagging way behind the average. In a survey, less than 10% need to beat the skills shortage, offer a career path, invest
of companies active in the forest-based sector declare that time and money in workforce development, attract young
they are prepared to harness digital technology in dealing workers by raising perceptions of the industry. Mr Austen
with human resources aspects of their organization such invites businesses to think if they have plans to do so in the
as organization of work, changing the skill and job mix of medium- and long-term.
workforce and so on. Only 18% of forest products companies
have strategies for evolving their models over the next three Disclaimer: This summary of the International Softwood
years (cross-industry benchmark: 44%). On the other hand, Conference 2018 has been prepared by the EOS Secretariat
the large majority of employees foster the introduction of based on the presentations given during the Conference. It
digital technology into businesses. has been done to the best of the knowledge of the Secretariat,
He argues that digital change should be driven from the top. but it does not necessarily reflect the views of the presenters
Leadership needs to broaden its thinking about the role of of the Conference nor it claims completeness.
© Shutterstock
2019 ISC. A moment of the sawmill visit.
212
SAVE THE DATE

67th International Softwood Conference 2019
16 - 18 October
ANTWERP - BELGIUM
Antwerp, on the crossroads of international trade and a major harbour for wood and wood
products, will be the host city of the 2019 International Softwood Conference from 16 to 18
October.
Organised by the European Organisation of the Sawmill Industry, EOS, the European Timber
Trade Federation, ETTF, and the softwood import section of Fedustria, the Belgian federation
of the Textile, Wood and Furniture Industries, the conference will gather representatives of
leading softwood producing and importing companies for two days of inspiring presentations
and contacts.
In addition to the “technical” meetings, participants will be able to get to learn Antwerp better
with a welcome reception and official conference dinner at famous landmarks such as the MAS
(Museum aan de Stroom) and the Antwerp Zoo. All meetings will be held at the Radisson Blu
Astrid Hotel.
Full details on the conference will soon become available via (ettf.info/isc2019). For queries
contact [email protected].
213
7.2. The International Hardwood Conference
SAVE THE DATE. On 21st and 22nd November, the International

Hardwood Conference will be held in the city of Berlin. The
event is co-organised by the Deutsche Säge- und Holzindustrie
Bundesverband e. V. (DeSH) together with the European
Timber Trade Federation and European Organisation of
Sawmill Industries.
The 2019 IHC is taking place in a country where forests and

forestry have a long history. Each year millions of tourists
marvel at „the Germans love“. The forestry sector in this Previously, in 2017, the International Hardwood Conference,
country is considered as a model for sustainability: the was held in Venice, an Italian city, which was built on an
forests serve equally as habitat, climate factor, recreation ingenious foundation system of largely hardwood piles.
area and source of livelihood for many people. On that occasion, the IHC communicated a confident,
international hardwood industry that’s adapting to market
The German capital Berlin offers a contrast to the idyllic needs. The event was organised by Italian trade federation
surrounding forests and lakes. Berlin is a vibrant metropolis Fedecomlegno in association with the European Timber
in constant change. Thus, the atmosphere of Berlin forms Trade Federation and European Organisation of Sawmill
the perfect setting for this year’s Hardwood Conference, on Industries. The IHC acknowledged that the sector had
which we want to discuss the change and the challenges of obstacles to overcome. Illegal logging and trade remained
the sawmill and wood industry: How will the global markets significant issues and verifying the legality and sustainability
develop? Will there still be enough raw material for all of us of the bona fide industry’s products could also prove
in future? Which products will be in demand? These and complex, said speakers. Ensuring raw material supply, given
other questions want to be investigated. growing worldwide demand, was another challenge.
Presentations are available at the following link:
FURTHER INFORMATION: WWW.IHC2019 http://ihc2017.info/en/welcome/
© Shutterstock
214
8. European Standardisation – Update

CEN/TC 124 “Timber structures”
Chairperson: Mr Frédéric Rouger

Secretary: Mr Guillaume Rousselet
Structure of the technical committee

Reference Title Convenor
CEN/TC124/WG 1 Test methods Christophe Sigrist
CEN/TC124/WG 2 Solid timber Frédéric Rouger
CEN/TC124/WG 3 Glued laminated timber Tobias Wiegand
CEN/TC124/WG 4 Connectors Barbara Sogato
CEN/TC124/WG 5 Prefabricated wall, floor and roof elements Simon Aicher
CEN/TC124/WG 6 Wood poles Willie Clason
Published standards
Reference Date Title
EN 12512:2001/A1:2005 2005-09-28 Timber Structures - Test methods - Cyclic testing of joints made with mechanical fasteners
EN 409:2009 2009-04-01 Timber structures - Test methods - Determination of the yield moment of dowel type fasteners
EN 15736:2009 2009-08-19 Timber Structures - Test methods - Withdrawal capacity of punched metal plate fasteners in handling and
erection of prefabricated trusses
EN 26891:1991 1991-02-21 Timber structures - Joints made with mechanical fasteners - General principles for the determination of
strength and deformation characteristics (ISO 6891:1983)
EN 14592:2008+A1:2012 2012-05-23 Timber structures - Dowel-type fasteners - Requirements
EN ISO 8970:2010 2010-06-15 Timber structures - Testing of joints made with mechanical fasteners - Requirements for wood density (ISO
8970:2010)
EN 16351:2015 2015-10-14 Timber structures - Cross laminated timber - Requirements
EN 15497:2014 2014-04-30 Structural finger jointed solid timber - Performance requirements and minimum production requirements
EN 338:2016 2016-04-06 Structural timber - Strength classes
EN 14358:2016 2016-06-22 Timber structures - Calculation and verification of characteristic values
EN 16784:2016 2016-06-29 Timber structures - Test methods - Determination of the long term behaviour of coated and uncoated dowel-
type fasteners
EN 1382:2016 2016-02-17 Timber Structures - Test methods - Withdrawal capacity of timber fasteners
EN 1383:2016 2016-02-17 Timber structures - Test methods - Pull through resistance of timber fasteners
EN 14081-1:2016 2016-02-10 Timber structures - Strength graded structural timber with rectangular cross section - Part 1: General
requirements
EN 1912:2012/AC:2013 2013-08-21 Structural Timber - Strength classes - Assignment of visual grades and species
EN 16929:2018 2018-12-12 Test methods - Timber floors - Determination of vibration properties
EN 1380:2009 2009-04-01 Timber structures - Test methods - Load bearing nails, screws, dowels and bolts
EN 15737:2009 2009-08-19 Timber Structures - Test methods - Torsional resistance of driving in screws
EN 15228:2009 2009-03-25 Structural timber - Structural timber preservative treated against biological attack
EN 789:2004 2004-10-20 Timber structures - Test methods - Determination of mechanical properties of wood based panels
EN 380:1993 1993-07-18 Timber structures - Test methods - General principles for static load testing
EN 595:1995 1995-03-22 Timber structures - Test methods - Test of trusses for the determination of strength and deformation behaviour
EN 14081-3:2012+A1:2018 2018-10-24 Timber structures - Strength graded structural timber with rectangular cross section - Part 3: Machine grading;
additional requirements for factory production control
EN 336:2013 2013-10-02 Structural timber - Sizes, permitted deviations
EN 384:2016+A1:2018 2018-11-21 Structural timber - Determination of characteristic values of mechanical properties and density
EN 1075:2014 2014-12-17 Timber structures - Test methods - Joints made with punched metal plate fasteners
EN 14251:2003 2003-12-03 Structural round timber - Test methods
EN 14229:2010 2010-10-06 Structural timber - Wood poles for overhead lines
EN 13271:2001/AC:2003 2003-09-24 Timber fasteners - Characteristic load-carrying capacities and slip-moduli for connector joints
EN 14374:2004 2004-11-24 Timber structures - Structural laminated veneer lumber - Requirements
EN 16737:2016 2016-05-25 Structural timber - Visual strength grading of tropical hardwood
215

EN 1381:2016 2016-02-17 Timber structures - Test methods - Load bearing stapled joints
EN 14545:2008 2008-10-01 Timber structures - Connectors - Requirements
EN 14081-2:2018 2018-10-24 Timber structures - Strength graded structural timber with rectangular cross section - Part 2: Machine grading;
additional requirements for type testing
EN 14250:2010 2010-01-27 Timber structures - Product requirements for prefabricated structural members assembled with punched metal
plate fasteners
EN 383:2007 2007-01-10 Timber Structures - Test methods - Determination of embedment strength and foundation values for dowel
type fasteners
EN 1912:2012 2012-04-18 Structural Timber - Strength classes - Assignment of visual grades and species
EN 912:2011 2011-07-13 Timber fasteners - Specifications for connectors for timbers
EN 12512:2001 2001-11-21 Timber structures - Test methods - Cyclic testing of joints made with mechanical fasteners
EN 408:2010+A1:2012 2012-07-25 Timber structures - Structural timber and glued laminated timber - Determination of some physical and
mechanical properties
EN 14080:2013 2013-06-26 Timber structures - Glued laminated timber and glued solid timber - Requirements
EN 594:2011 2011-06-29 Timber structures - Test methods - Racking strength and stiffness of timber frame wall panels
EN 596:1995 1995-03-22 Timber structures - Test methods - Soft body impact test of timber framed walls
EN 13271:2001 2001-11-21 Timber fasteners - Characteristic load-carrying capacities and slip-moduli for connector joints
Pending standards
Project Title Status Initial Date Forecasted
voting date
EN 14081-2:2018/prA1(WI=00124182) Timber structures - Strength graded structural timber Under Drafting 2019-03-12 2020-12-23
with rectangular cross section - Part 2: Machine grading;
additional requirements for type testing
EN 384:2016+A1:2018/prA2(WI=00124183) Structural timber - Determination of characteristic Under Drafting 2019-03-12 2020-12-23
values of mechanical properties and density
FprEN 14374(WI=00124137) Timber structures - Laminated veneer lumber (LVL) - Under Approval 2015-10-20 2018-08-31
Requirements
FprEN 14592(WI=00124149) Timber structures - Dowel-type fasteners - Requirements Under Approval 2015-05-12 2018-03-14
prEN 12512 rev(WI=00124173) Timber structures - Test methods - Cyclic testing of Preliminary
joints made with mechanical fasteners
prEN 13271 rev(WI=00124168) Timber fasteners - Characteristic load-carrying Preliminary
capacities and slip-moduli for connector joints
prEN 14081-3 rev(WI=00124181) Timber structures - Strength graded structural timber Under Drafting 2019-03-12 2020-12-23
with rectangular cross section - Part 3: Machine grading;
additional requirements for factory production control
prEN 14229 rev(WI=00124164) Structural timber - Wood poles for overhead lines Preliminary
prEN 14250 rev(WI=00124163) Timber structures - Product requirements for Preliminary
prefabricated structural members assembled with
punched metal plate fasteners
prEN 14545 rev(WI=00124171) Timber structures - Connectors - Requirements Preliminary
prEN 14545 rev(WI=00124180) Timber structures - Connectors - Requirements Preliminary
prEN 15736 rev(WI=00124161) Timber structures - Test methods - Withdrawal capacity Preliminary
of punched metal plate fasteners in handling and
prEN 15736 rev(WI=00124169) Timber Structures - Test methods - Withdrawal capacity Preliminary
of punched metal plate fasteners in handling and
prEN 16351(WI=00124177) Timber structures - Cross laminated timber - Requirements Under Approval 2017-11-14 2019-09-24
prEN 1912 rev(WI=00124178) Structural Timber - Strength classes - Assignment of Preliminary
visual grades and species
prEN 409 rev(WI=00124174) Timber structures - Test methods - Determination of the Preliminary
yield moment of dowel type fasteners
prEN 409 rev(WI=00124162) Timber structures - Test methods - Determination of the Preliminary
yield moment of dowel type fasteners
prEN 594 rev(WI=00124172) Timber structures - Test methods - Racking strength Preliminary
and stiffness of timber frame wall panels
prEN 912 rev(WI=00124167) Timber fasteners - Specifications for connectors for timbers Preliminary
prEN ISO 8970(WI=00124165) Timber structures - Testing of joints made with Under Approval 2015-10-13 2019-08-05
mechanical fasteners - Requirements for timber density
(ISO/DIS 8970:2018)
(WI=00124170) Timber structures - Glued laminated timber and Preliminary
glued solid timber made from harwood species -
Requirements
216
CEN/TC 175 “Round and Sawn Timber”
Chairperson: Mr Philippe Pangault

Secretary: Mr Frédéric Henry
Structure of the technical committee

Reference Title
CEN/TC 175/WG 1 General matters, definitions, measurement methods
CEN/TC 175/WG 2 Sawn timber
CEN/TC 175/WG 4 Round timber
CEN/TC 175/WG 30 Specific user requirements - Consolidation
CEN/TC 175/WG 32 Specific user requirements - Timber in joinery
CEN/TC 175/WG 33 Specific user requirements - Timber in flooring
CEN/TC 175/WG 34 Specific user requirements - Timber in packaging and pallets
CEN/TC 175/WG 36 Specific user requirements - Other timber products
CEN/TC 175/WG 37 Specific user requirements - Timber in stairs
CEN/TC 175/WG 38 Specific user requirements - Timber in cladding and panelling
CEN/TC 175/WG 39 Specific user requirements - Fire retardant treated wood
Published standards
EN 14221:2006 2006-11-08 Timber and wood-based materials in internal windows, internal door leaves and internal doorframes -
Requirements and specifications
EN 13183-2:2002/AC:2003 2003-09-17 Moisture content of a piece of sawn timber - Part 2: Estimation by electrical resistance method
EN 1927-2:2008/AC:2009 2009-04-01 Qualitative classification of softwood round timber - Part 2: Pines
EN 1611-1:1999/A1:2002 2002-08-21 Sawn timber - Appearance grading of softwoods - Part 1: European spruces, firs, pines, Douglas fir and larches
EN 1534:2010 2010-10-27 Wood flooring - Determination of resistance to indentation - Test method
EN 844-8:1997 1997-03-19 Round and sawn timber - Terminology - Part 8: Terms relating to features of round timber
EN 844-9:1997 1997-03-19 Round and sawn timber - Terminology - Part 9: Terms relating to features of sawn timber
EN 975-1:2009/AC:2010 2010-09-29 Sawn timber - Appearance grading of hardwoods - Part 1: Oak and beech
EN 1309-3:2018 2018-01-24 Round and sawn timber - Methods of measurements - Part 3: Features and biological degradations
EN 844-2:1997 1997-03-19 Round and sawn timber - Terminology - Part 2: General terms relating to round timber
EN 844-7:1997 1997-03-19 Round and sawn timber - Terminology - Part 7: Terms relating to anatomical structure of timber
EN 844-10:1998 1998-04-22 Round and sawn timber - Terminology - Part 10: Terms relating to stain and fungal attack
EN 16755:2017 2017-10-11 Durability of reaction to fire performance - Classes of fire-retardant treated wood products in interior and
exterior end use applications
EN 14298:2017 2017-10-25 Sawn timber - Assessment of drying quality
EN 13489:2017 2017-09-27 Wood-flooring and parquet - Multi-layer parquet elements
EN 1910:2016 2016-04-27 Wood flooring and wood panelling and cladding - Determination of dimensional stability
EN 13227:2017 2017-11-01 Wood flooring - Solid lamparquet products
EN 17009:2019 2019-03-13 Flooring of lignified materials other than wood - Characteristics, assessment and verification of constancy of
performance and marking
EN 1313-1:2010 2010-01-27 Round and sawn timber - Permitted deviations and preferred sizes - Part 1: Softwood sawn timber
EN 13226:2009 2009-05-27 Wood flooring - Solid parquet elements with grooves and/or tongues
EN 12248:1999 1999-06-23 Sawn timber used in industrial packaging - Permitted deviations and preferential sizes
EN 12249:1999 1999-06-23 Sawn timber used in pallets - Permitted deviations and guidelines for dimensions
EN 1309-2:2006 2006-03-15 Round and sawn timber - Method of measurement of dimensions - Part 2: Round timber - Requirements for
measurement and volume calculation rules
EN 13183-2:2002 2002-04-17 Moisture content of a piece of sawn timber - Part 2: Estimation by electrical resistance method
EN 1611-1:1999 1999-08-18 Sawn timber - Appearance grading of softwoods - Part 1: European spruces, firs, pines and Douglas firs
EN 14762:2006 2006-02-15 Wood flooring - Sampling procedures for evaluation of conformity
EN 14915:2013+A1:2017 2017-06-07 Solid wood panelling and cladding - Characteristics, requirements and marking
EN 13647:2011 2011-05-18 Wood flooring and wood panelling and cladding - Determination of geometrical characteristics
EN 13228:2011 2011-05-18 Wood flooring - Solid wood overlay flooring elements including blocks with an interlocking system
CEN/TS 15679:2007 2007-11-28 Thermal Modified Timber - Definitions and characteristics
EN 13183-1:2002 2002-04-17 Moisture content of a piece of sawn timber - Part 1: Determination by oven dry method
217

EN 1927-3:2008 2008-03-26 Qualitative classification of softwood round timber - Part 3: Larches and Douglas fir
EN 844-12:2000 2000-11-22 Round and sawn timber - Terminology - Part 12: Additional terms and general index
EN 16755:2017/AC:2018 2018-07-18 Durability of reaction to fire performance - Classes of fire-retardant treated wood products in interior and
exterior end use applications
EN 1313-2:1998/AC:1999 1999-06-30 Round and sawn timber - Permitted deviations and preferred sizes - Part 2: Hardwood sawn timber
EN 16485:2014 2014-03-26 Round and sawn timber - Environmental Product Declarations - Product category rules for wood and wood-
based products for use in construction
EN 844-3:1995 1995-03-07 Round and sawn timber - Terminology - Part 3: General terms relating to sawn timber
EN 942:2007 2007-03-14 Timber in joinery - General requirements
EN 1315:2010 2010-01-27 Dimensional classification of round timber
EN 14951:2006 2006-03-15 Solid hardwood panelling and cladding - Machined profiles elements
EN 14076:2013 2013-12-11 Timber stairs - Terminology
CEN/TS 13307-2:2009 2009-12-02 Laminated and finger jointed timber blanks and semi-finished profiles for non-structural uses - Part 2:
Production control
EN 12246:1999 1999-06-23 Quality classification of timber used in pallets and packaging
EN 1927-1:2008 2008-03-26 Qualitative classification of softwood round timber - Part 1: Spruces and firs
EN 14519:2005 2005-12-21 Solid softwood panelling and cladding - Machined profiles with tongue and groove
EN 13183-1:2002/AC:2003 2003-09-17 Moisture content of a piece of sawn timber - Part 1: Determination by oven dry method
EN 13756:2018 2018-09-12 Wood flooring and parquet - Terminology
EN 844-4:1997 1997-03-19 Round and sawn timber - Terminology - Part 4: Terms relating to moisture content
EN 844-6:1997 1997-03-19 Round and sawn timber - Terminology - Part 6: Terms relating to dimensions of sawn timber
EN 14342:2013 2013-07-10 Wood flooring and parquet - Characteristics, evaluation of conformity and marking
EN 844-1:1995 1995-03-07 Round and sawn timber - Terminology - Part 1: General terms common to round timber and sawn timber
EN 14761:2006+A1:2008 2008-07-09 Wood flooring - Solid wood parquet - Vertical finger, wide finger and module brick
CEN/TS 15717:2008 2008-04-16 Parquet flooring - General guideline for installation
EN 1927-2:2008 2008-03-26 Qualitative classification of softwood round timber - Part 2: Pines
EN 16449:2014 2014-03-12 Wood and wood-based products - Calculation of the biogenic carbon content of wood and conversion to
carbon dioxide
CEN/TS 12169:2008 2008-01-30 Criteria for the assessment of conformity of a lot of sawn timber
EN 14220:2006 2006-11-08 Timber and wood-based materials in external windows, external door leaves and external doorframes -
EN 844-5:1997 1997-03-19 Round and sawn timber - Terminology - Part 5: Terms relating to dimensions of round timber
EN 13183-3:2005 2005-03-16 Moisture content of a piece of sawn timber - Part 3: Estimation by capacitance method
EN 1533:2010 2010-08-04 Wood flooring - Determination of bending strength under static load - Test methods
EN 13556:2003 2003-06-25 Round and sawn timber - Nomenclature of timbers used in Europe
EN 16481:2014 2014-06-18 Timber stairs - Structural design - Calculation methods
EN 13629:2012 2012-04-11 Wood flooring - Solid individual and pre-assembled hardwood boards
CEN/TS 14464:2010 2010-07-21 Sawn timber - Method for assessment of case-hardening
EN 13488:2002 2002-12-18 Wood flooring - Mosaic parquet elements
EN 1316-2:2012 2012-10-17 Hardwood round timber - Qualitative classification - Part 2: Poplar
EN 13442:2013 2013-03-13 Wood flooring and wood panelling and cladding - Determination of the resistance to chemical agents
CEN/TS 15680:2007 2007-11-28 Prefabricated timber stairs - Mechanical test methods
EN 13696:2008 2008-12-10 Wood flooring - Test methods to determine elasticity and resistance to wear and impact resistance
EN 844-11:1998 1998-04-22 Round and sawn timber - Terminology - Part 11: Terms relating to degrade by insects
EN 1438:1998 1998-08-19 Symbols for timber and wood-based products
EN 13307-1:2006 2006-11-08 Timber blanks and semi-finished profiles for non-structural uses - Part 1: Requirements
EN 1309-1:1997 1997-04-23 Round and sawn timber - Method of measurement of dimensions - Part 1: Sawn timber
EN 975-1:2009 2009-03-18 Sawn timber - Appearance grading of hardwoods - Part 1: Oak and beech
EN 1316-1:2012 2012-10-17 Hardwood round timber - Qualitative classification - Part 1: Oak and beech
EN 1313-2:1998 1998-11-18 Round and sawn timber - Permitted deviations and preferred sizes - Part 2: Hardwood sawn timber
EN 15146:2006 2006-12-13 Solid softwood panelling and cladding - Machined profiles without tongue and groove
CEN/TS 15676:2007 2007-11-21 Wood flooring - Slip resistance - Pendulum test
EN 975-2:2004 2004-07-07 Sawn timber - Appearance grading of hardwoods - Part 2: Poplars
EN 13990:2004 2004-02-11 Wood flooring - Solid softwood floor boards
EN 1312:1997 1997-02-19 Round and sawn timber - Determination of the batch volume of sawn timber
EN 15644:2008 2008-12-10 Traditionally designed prefabricated stairs made of solid wood - Specifications and requirements
218
Pending standards
Project Title Status Initial Date Forecasted
voting date
FprEN 844(WI=00175157) Round and sawn timber - Terminology Under Approval 2017-04-28 2018-12-08
prCEN/TS 13307-2 rev(WI=00175174) Laminated and finger jointed timber blanks and Preliminary
semi-finished profiles for non-structural uses - Part 2:
Production control
prEN 13307-1 rev(WI=00175175) Timber blanks and semi-finished profiles for non- Preliminary
structural uses - Part 1: Requirements
prEN 13556 rev(WI=00175170) Round and sawn timber - Nomenclature of timbers Preliminary
used in Europe
prEN 13629(WI=00175178) Wood flooring - Solid individual and pre-assembled Under Enquiry 2018-04-19 2020-01-08
hardwood boards
prEN 13647 rev(WI=00175179) Wood flooring and wood panelling and cladding - Under Drafting 2018-04-19 2020-01-08
Determination of geometrical characteristics
prEN 14220 rev(WI=00175171) Timber and wood-based materials in external windows, Preliminary
external door leaves and external doorframes -
prEN 14221 rev(WI=00175173) Timber and wood-based materials in internal windows, Preliminary
internal door leaves and internal doorframes -
prEN 14342 rev(WI=00175172) Wood flooring and parquet - Characteristics, evaluation Preliminary
of conformity and marking
prEN 1534(WI=00175176) Wood flooring and parquet - Determination of Under Enquiry 2018-03-08 2019-12-22
resistance to indentation – Test method
(WI=00175180) Guidance for the preparation of the declaration of Preliminary
performance and CE marking
(WI=00175177) Wood flooring and parquet – Determination of top and Under Drafting 2018-04-19 2020-01-08
bottom layer delamination of multilayer elements –
Test method
219
EOS organisation 2018/2019

Board members:
• Sampsa J. Auvinen – Board Professional (LV)............................................................................................................................President
• Ernest Schilliger - Schilliger Holz (CH)....................................................................................................... Vice-President for Softwood
• Joël Lefebvre - Groupe Lefebvre (FR)...................................................................................................... Vice-President for Hardwood
• Constantin Arion - Forestfalt S.A. (RO)
• Carsten Doehring - Ilim Timber Germany (DE)
• Nicolas Douzain-Didier – Fédération Nationale du Bois (FR) replacing Marc Siat – Siat Braun (FR)
• Mikael Eliasson - Skogsindustrierna (SE)
• Herbert Jöbstl - Stora Enso (AT)
• Kai Merivuori - Sahateollisuus ry (FI)
• Thomas Sève - Monnet-Sève SA (FR)
Honorary Board member:

• Jean-Claude Sève - Monnet-Sève SA (FR)
Honorary President:
• Hans Michael Offner - Johann Offner Holzindustrie GmbH (AT)
EOS Secretariat
Secretary General: Silvia Melegari ([email protected])
Economic and Policy Advisor: Diego Benedetti ([email protected])
EOS Secretariat - Offices

EOS is located, together with other European wood associations at Rue
Montoyer 24 in Brussels, Belgium. The office building, located 5 minutes’
walk from the European Parliament, provides opportunities for meetings
of national federations too and members are always welcome to use the
various facilities when in Brussels.
220
EOS Member Federations – May 2019
AUSTRIA FRANCE
Fachverband der Holzindustrie Österreichs FNB – Fédération Nationale du Bois
Schwarzenbergplatz 4, PF 123 6, Rue François 1er
AT-1037 Wien FR-75008 Paris
+43 1 712 26 01 +33 1 56 69 52 00
www.holzindustrie.at www.fnbois.com
[email protected]
GERMANY
BELGIUM
DeSH-Deutsche Säge-und Holzindustrie
FNS – Fédération Nationale des Scieries Bundesverband e.V.i.Gr.
Rue Royale 163 Dorotheenstr. 54
BE-1210 Bruxelles DE-10117 Berlin
+32 2 219 27 43 +49 30 2061 3990 0
www.houtinfobois.be www.saegeindustrie.de
[email protected] [email protected]
DENMARK LATVIA
DI – Dansk Traeindustrier Association of Latvian Timber Producers and Traders
HC Andersens Boulevard Skaistkalnes street 1
DK-1787 København V LV-1044 Riga
+45 3377 3411 +371 64070180
www.di.dk http://latviatimber.lv/en/
FINLAND NORWAY
Sahateollisuus ry Treindustrien
Säästöpankinranta 4 C 24 Middelthuns gate 27, 0368 Oslo
FI-00530 HELSINKI +47 920 93 301
+358 20 7790960 www.trelast.no
www.sahateollisuus.com [email protected]
[email protected]
221
ROMANIA SWITZERLAND
ASFOR – Associatia Forestielor Din România HIS – Holzindustrie Schweiz
SOS. Pipera 46A, sector 2 Mottastrasse 9
RO-020112 Bukarest CH-3000, Bern 6
+40 21 2333705, +40 31 8054121 +41 31 350 89 89
www.asociatiaforestierilor.ro http://www.holz-bois.ch/home/
SWEDEN
SFIF – Swedish Forest Industries Federation
P.O. Box 55525
SE-102 04 Stockholm
+46 (0)8-762 72 60
http://www.forestindustries.se/
EOS Associate Members – May 2019

Holzindustrie Schweighofer Romania Cedar Ltd.
Strada Grigore Alexandrescu Nr. 59, et. 2 Rubeši 37,
Sector 1, 010623 Bucharest 51215, Rubeši,
Romania Croatia
+40 372 422 700 http://cedar.hr/home
https://www.schweighofer.at/en.html [email protected]
[email protected]
222
ANNUAL REPORT
2018/2019
The European Organisation of the Sawmill Industry
(EOS) aisbl, an international non-profit association
according to Belgian law, represents the interests on
the European and international level of the sawmill
industries from 12 European countries (Austria,
Belgium, Croatia, Denmark, Finland, France, Germany,
Latvia, Norway, Romania, Sweden and Switzerland),
producing about 80% of the total European sawn wood
output. The sector represents a turnover of around
37 billion EUR and 16% of the overall woodworking and
furniture industry in EU28.
The EOS secretariat extends its thanks to all persons and organisations that have contributed to the publication of this report.
Note: the information provided in Chapter 4 “Main results from the EOS Market Survey April 2018” as well as in the country
reports is based on information supplied by the EOS member federations and may differ from the information included in
other databases or reports. If the EOS member federations could not provide the required information, the EOS secretariat has
used information derived from other sources in order to present the full picture.
© EOS/OES, May 2019
Rue Montoyer 24, BE-1000 Brussels
Ph: +32 2 287 08 68 – Fax: +32 2 287 08 75 – Email: [email protected]
www.eos-oes.eu
Printed in Belgium

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2018

1. GENERAL ECONOMIC SITUATION 7

2. THE WOODWORKING INDUSTRY IN THE EUROPEAN UNION (EU-28) 17

3. ECONOMIC OVERVIEW OF THE WOOD MARKETS 31

4. MAIN RESULTS FROM THE EOS MARKET SURVEY – APRIL 2019 62

5. THE CONSTRUCTION INDUSTRY IN EUROPE 108

6. EOS ADVOCACY ACTIONS AND RELEVANT EU POLICIES INFORMATION 127

7. HIGH LEVEL CONFERENCES CO-ORGANIZED BY EOS  201

8. EUROPEAN STANDARDISATION – UP TO DATE 215

Indufor – Forest Industry & Bio Solutions Services

Biomass / Log Sourcing & Wood Supply Plans Business Strategies

PROMOTING SUSTAINABLE WOOD

1. General Economic Situation

1.1 Global Overview with focus on the EU

Fig. 1.1 EUR vs USD, April 2017 – April 2019

Source: European Central Bank, 2019

Fig. 1.2 EUR vs GBP, April 2017 – April 2019

Source: European Central Bank, 2019

Fig. 1.3 EUR vs CNY, April 2017 – April 2019

Source: European Central Bank, 2019

Fig. 1.4 EUR vs JPY, April 2017 – April 2019

Source: European Central Bank, 2019

Fig. 1.5 EUR vs SEK, April 2017 – April 2019

Source: European Central Bank, 2019

Fig. 1.6 EUR vs RUB, April 2017 – April 2019

Source: European Central Bank, 2019

Fig. 1.7 EUR vs EGP, April 2017 – April 2019

2. The woodworking industries

Table 2.1: The NACE classification system

Figure 2.1: Production 2017 – Relative importance of the sub-sectors

Production per Country

Belgium 5,114 5,291 5,354 5,296 5,728 12.0% 8.2%

Bulgaria 844 898 963 987 1,050 24.4% 6.4%

Croatia 933 1,011 1,086 1,245 1,421 52.2% 14.1%

Cyprus 134 129 128 139 156 16.9% 12.2%

Czech Republic 4,276 4,293 4,538 4,756 5,070 18.6% 6.6%

Denmark 3,193 3,214 3,324 3,438 3,444 7.9% 0.2%

Estonia 1,974 2,198 2,359 2,472 2,701 36.9% 9.3%

Finland 6,502 6,392 6,258 6,554 6,941 6.8% 5.9%

France 17,264 18,556 18,062 17,818 18,120 5.0% 1.7%

Germany 42,643 43,824 45,778 46,620 47,166 10.6% 1.2%

Greece 699 702 716 758 763 9.2% 0.7%

Hungary 1,224 1,327 1,475 1,549 1,685 37.6% 8.7%

Ireland 1,310 1,464 1,503 1,487 1,730 32.1% 16.4%

Italy 32,680 33,093 33,702 34,973 35,939 10.0% 2.8%

Latvia 2,041 2,198 2,196 2,311 2,474 21.2% 7.0%

Lithuania 2,082 2,446 2,527 2,618 2,829 35.9% 8.0%

Luxembourg 209 207 214 216 225 7.9% 4.4%

Malta 51 56 62 63 67 30.5% 6.4%

Poland 14,269 15,938 17,064 17,017 18,637 30.6% 9.5%

Portugal 3,791 4,081 4,380 4,408 4,750 25.3% 7.7%

Romania 4,482 4,730 4,879 4,890 5,026 12.1% 2.8%

Slovakia 1,514 1,955 2,084 1,851 2,017 33.2% 9.0%

Slovenia 922 997 1,049 1,102 1,186 28.7% 7.6%

Spain 9,494 9,857 10,631 10,995 11,854 24.8% 7.8%

Sweden 11,362 11,783 11,548 11,572 12,221 7.6% 5.6%

The Netherlands 5,119 5,319 5,803 6,254 6,816 33.2% 9.0%

United Kingdom 15,523 18,330 21,200 19,642 18,447 18.8% -6.1%

EU 28 199,935 210,588 219,504 221,988 229,908 15.0% 3.6%

6. EOS ADVOCACY ACTIONS AND RELEVANT EU POLICIES INFORMATION 127

7. HIGH LEVEL CONFERENCES CO-ORGANIZED BY EOS 201

8. EUROPEAN STANDARDISATION – UP TO DATE 215