Main results and conclusions of the European Forest Sector Outlook Study

1. Main results and conclusions of the European Forest Sector Outlook Study EU/EFTA CIS CEEC

2. Introduction Main results Conclusions Structure of the presentation

3. Volker Sasse Kit Prins CTS Nair EFSOS team and consultants National correspondents Thanks to:

4. Based on the 3 « pillars » of EFSOS: market projections, forest resource analysis, policy study Only the major ideas are presented, with emphasis on policy conclusions All results by subregion: EU/EFTA, CEEC, CIS For national data and for methodology, refer to Discussion Papers Introduction

5. Continued GDP growth everywhere Convergence of CEEC and CIS with EU/EFTA Constant prices for forest products No fundamental change in social and institutional context Basic assumptions

6. Market projections: Fastest growth in production and consumption will occur in the East

7. Market projections: Fastest growth in production and consumption will occur in the East

8. Market projections: Trade within Europe will increase as well as exports of solid wood products to the rest of the World

9. Market projections: Fastest growth in production and consumption will occur in wood based panel and paper sectors

10. Market projections: the forest is relatively less important as a source of raw materials Share of industrial roundwood in wood and fibre consumption

11. Market projections: Use of recycled fibre and wood residues will continue to increase

12. Resource projections: The harvesting to increment ratio has declined over the last 40 years Fellings as a proportion of Net Annual Increment

13. Resource projections: Harvesting will remain below increment and forest stocking will continue to increase

14. Policy projections: Most likely policy developments in the future • More emphasis on nature conservation and promotion of biodiversity in forest ecosystems. • Progress in EU enlargement and market reforms in countries with economies in transition. • Promotion of renewable energy. • Improvement of waste management and emission control. • Acceptance of measures in the forestry sector as part of strategies to mitigate climate change.

15. Alternative scenarios: Integration and conservation scenarios and other possible developments that may have an impact • The European forest sector has the capacity to cope with faster economic growth (integration) and more focus on non-wood benefits (conservation).

16. Alternative scenarios: Integration and conservation scenarios and other possible developments that may have an impact

17. Alternative scenarios: Integration and conservation scenarios and other possible developments that may have an impact • The European forest sector has the capacity to cope with faster economic growth (integration) and more focus on non-wood benefits (conservation). • The impact of renewable energy policies could be significant and should be examined further. • Recent technological developments (e.g. engineered wood products, the internet) could significantly affect the outlook for some products. • Trends in Global forest products markets could constrain the outlook for some products

18. Conclusions: Markets for processed products • The highest rates of market growth will occur in the East (CEEC and CIS), particularly in the sawnwood sector. • By 2020, over half of Europe's sawnwood will be produced in the East (CEEC and CIS). • Western Europe (EU/EFTA) will remain the main European market for wood based panels and paper. • Wood based panels will continue to gain a greater share of the solid wood products market. • Production will increase faster than consumption in many regions and product sectors leading to increased exports.

19. Implications: Markets for processed products • Competitiveness in international markets will be crucial for the future of the forest processing sector in Europe. • Western Europe is likely to focus on improved marketing, innovation and technology to remain competitive. This will require improvements in skills and research. • CEEC and CIS countries can compete on low labour and raw material costs - but for how long? • The potential to develop the forest sector in the East is huge, but this will also need investment in technology and training. Such development will require continued efforts to improve the investment climate.

20. Conclusions: Roundwood markets • Roundwood production and consumption will increase most in the East, for all types of roundwood. • The highest growth will occur in the Russian Federation, where exports will continue to expand. • Demand for roundwood in Western Europe will continue to shift towards smaller sized roundwood. • Further increases in demand may occur due to renewable energy policies. • Some of the demand growth in Western Europe will be satisfied by increased use of residues and recycled fibre.

21. Implications: Roundwood markets • Downward pressure on roundwood prices in Europe may continue, particularly for sawlogs. • Low roundwood prices reduce the economic viability of sustainable forest management. • There is a need to expand the markets for wood products to improve the viability of sustainable forest management. • Rotation ages may become shorter as large trees become relatively less valuable. However, large trees will be valued more for their appearance than their wood properties. • Forest management may become increasingly specialised, depending on location and management objectives.

22. Conclusions: Sustainability of the forestry sector • In most countries, projected increases in roundwood production will not exceed NAI. However, other aspects of forest sustainability may be more of a concern. For instance, employment will decline everywhere. • Measures to improve competitiveness may compromise the production of some non-wood outputs and appear to contradict the traditional objective of "multifunctionality". • The forest sector has the potential to make a much larger contribution to broader sustainable development goals.

23. Implications: Sustainability of the forestry sector • Some non-wood outputs will become commercialised. The continued production of others may need financial support. • From the perspective of sustainable development, wood has many desirable characteristics. However, public perception of wood products is sometimes unfavourable. • A concerted effort is needed to promote the use of forest products.

24. Conclusions: Future policy environment • Society will continue to place many demands on the forest sector, but the capacity of the sector to meet some of these demands will be constrained. • Policies outside the forest sector often have a huge impact on the sector and are not always supportive. • The forest sector is increasingly marginalised in policy debates within countries.

25. Implications: Future policy environment • The forest sector is fragmented and should speak with one voice if it is to be heard in broader policy debates. • This requires improved consultation within governments between forestry policymakers and policymakers in other sectors (e.g. environment, agriculture, energy, industry). • This would also benefit from greater collaboration between countries and across different stakeholder groups.

26. Final summary: Most important conclusions for policymakers? Forestry policymakers should stress how the sector can contribute to solving some of the major concerns of society: 1. The forest sector can contribute to biodiversity conservation with significant increases in protected areas, provided it is adequately funded. 2. The forest sector can make a significant contribution to the goals of renewable energy policy and all stakeholders should consider the best way to do this. 3. Forestry policymakers (supported by all stakeholders) should speak out in favour of the promotion of sustainably produced wood products.