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MARKET WATCH

EU Forest Management Policy Must Focus on Long Term

Posted by John Greene on July 10, 2017

Mårten Larsson, senior vice-president of the Swedish Forest Industries Federation, recently penned an article that cuts right to the heart of the disconnect that exists between members of the global forestry industry and many of the administrative entities that are charged with their oversight. Administrators the world over tend to be impatient and forests don’t grow overnight, which makes for a challenging dynamic when it comes to managing forests and the many raw materials derived from them. 

This disconnect is typically the result of two primary factors: 1) a practical knowledge gap between those who study and understand forest best management practices and those who don’t, and 2) the shortsighted legislative approach many administrators adhere to, which is oftentimes a function of the position and the nature of regulation. After all, election cycles are short when compared to the growth cycle of the average forest. 

Larsson describes the situation in Sweden, which has maximized the use of its forest raw materials in place of fossil energy sources—a dynamic best illustrated in its combined heat and power plants. For example, Stockholm is heated by three large combined heat and power plants and the city’s 2 million inhabitants enjoy warm houses, warm water, green electricity and clean air thanks to these plants that are fueled with by-products and residuals from Sweden’s forest industry. 

Any surplus (by-products, residuals and heat) is delivered to the surrounding communities, and other wood-related residues, such as tall oil from the pulp production, are refined into biodiesel.

The climate-friendly effect of using these forest resources is even larger based on the widespread use of wood in buildings, in paper packaging rather than plastics, in textiles made by wood fiber and other new innovative materials under research and development. 

This is how to grow the bio-economy, successfully sequester carbon and minimize fossil fuel usage, and most importantly, keep forests forested. 

 

Failure to See the Forest for the Trees 

But Larsson also notes that both the European Parliament and European Council have been working on a proposal focusing on land use, land-use change and forestry (also known as LULUCF)—the details of which could risk taking a step back on the road to a sustainable bio-economy and a successful fossil-free transition. The LULUCF proposal would essentially put a cap on the use of forest resources. By exceeding the “forestry reference level” that is based only on past management practices and harvesting intensity, a CO2 debit would be imposed on any offending member states. 

Rather than encouraging member countries to replace petroleum-based products with products derived from wood, Larsson says that EU legislators seem to prefer “cutting corners” and imposing top-down, simplistic restrictions on the use of forest resources without taking into account sustainable forest management principles. “For example, one of the most critical issues is the determination of future harvesting levels. Should these be calculated on the basis of past historic intensity in forest use or should they be based on future potential created by decades of investments in sustainably managed forests?” 

The choice of calculation methods, definitions and criteria for forest management may appear as a technical detail to those unfamiliar with forest management, yet they result in restricting the development of Sweden’s forests and, by extension, its bio-based economy. For example, analyses demonstrate that Sweden can sustainably increase its harvest levels and forest industry production by 10 percent over ten years. However, due to details within the current proposal, this production increase would be reported as adding 10 million tons of CO2 emissions, and Sweden would have to offset these emissions by buying forest credits from other member states. 

The forest industry employs 3 million people in the EU, ensures 93 percent of European paper and board use and 100 percent of its sawn timber use. If an increased harvest of renewable resources will have to be reported as “added emissions” (and incur associated expenses), an increase in imports will be inevitable. Such a scenario would have adverse environmental and economic effects on the region—damaging its existing forest products industry, and essentially torpedoing the bio-based economy the Commission claims to champion. 

Sylvain Lhôte, Director General at Confederation of European Paper Industries (CEPI), also commented on the general sense of wariness in these proposals noting that, contrary to common misunderstandings, total forest area in Europe has increased. Between 2005 and 2015, European forests grew by a total area of 44,160 km2—an area larger than the land area of Switzerland (39,516 km2).

 EU_Forests.jpg

 

“Forest growth is not merely the result of conservationist policies or an act of God. It directly results from the investments that the forest-based industry and owners have made over the past decades to develop and sustainably manage their assets. In some member states such as Sweden for instance, for every tree that is harvested two are planted. Similar trends are exhibited elsewhere also, with forests growing in almost every EU member state. More than two-thirds of the raw material of the forest fibre and paper industry used at the beginning of its production loop, from renewable fibres from trees to recycled paper, is certified from sustainably managed forests,” Lhôte said. 

Lhôte added that the Commission’s “cap and don’t touch” logic ignores that forest growth comes from investment and investors expect a return from their assets. “It also forgets that in the long-run, conservationism only has a slight impact on the growth of forestry stock but also results in less resilient and aging forests, reducing their carbon sink potential. This dimension is critical in the long run. European forest stocks are indeed aging and will need more active management and revenues to support regeneration and perpetuate growth,” he said. 

Larsson believes that the EU regulatory proposal can be improved to promote ambitious climate targets while protecting a sustainable European forest industry, which can be achieved by introducing a few pragmatic and forward-looking changes: 

  • First, reference the most current forest statistics and their related management practices to determine future harvesting levels rather than relying solely on historic intensity data. “This will avoid the risk of misleading or erroneous comparisons in a context of increasing volatility of economic cycles and geo-political changes. It will also be in line with the ambition in many member states to create better forest conditions by means of an active forest management.”
     
  • Second, safeguard sustainability by ensuring that future generations will be able to benefit, at a minimum, from the same availability of quality wood that is growing today. “Environmental and social aspects of forest management should, of course, be included in a sustainable way.”
     
  • Finally, do not allow decisions and legislation affecting forest management to be made by those with no working knowledge of forestry and forest management systems. It may seem like an attractive option in the short term to use forest credits to reach targets rather than actually reducing emissions via transportation or heating changes, “but in the long run the unmanaged forests start dying, emitting CO2, and the problem is still there to be solved in other sectors.”

 

Lhôte believes that the European Commission’s proposal must avoid legislating based on the short-term, and it must encourage effective use of, and investment in, forest resources. Forests are a major source of a low-carbon bio-economy, “offering long-life carbon storage in construction applications or maintaining carbon in the loop with recycled short-life paper-based products. The current proposal does not align with what the EU seeks to achieve and undermines Europe’s role as a leader on the bio-economy,” Lhôte added. “Let’s not uproot what has already been achieved; let’s keep both forests and the bio-economy growing at the same time.” 

Larsson said that EU policies designed to grow the bio-economy and encourage climate change mitigation are fundamental pieces of sustainable forest management practices, but a long-term, sensible approach must be part of the plan. “This positive contribution to combating climate change can be enhanced even further if forestry is integrated into the EU’s climate and energy policies in a smarter way and fully considering the substitution effect,” he said.

Future Implications Timber Supply and Demand Trends

Topics: forest management

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