Four Policy Challenges for the European Forest Sector Kit Prins
Freiburg, 27 May 2013 Outline Background Supplying renewable energy on a sustainable basis Becoming innovative and competitive Leading the way to a green economy Communicating and listening
Freiburg, 27 May 2013 Forest cover varies widely
Freiburg, 27 May 2013 Total value added by the forest sector
Freiburg, 27 May 2013 Wood is by far the most important source of revenue
Freiburg, 27 May 2013 Supply and demand 2010 to 2030
Freiburg, 27 May 2013 CHALLENGE 1: Sustainable wood energy
Freiburg, 27 May 2013 Supplying renewable energy on a sustainable basis: background Ambitious targets for renewable energy Wood is now the most important renewable energy (3.4% of total energy, 38.9% of renewables) Energy is now the most important single use for wood in Europe (~40% of wood is used ultimately for energy) BUT we are far from the targets!
Freiburg, 27 May 2013 Share of woody biomass in total primary energy supply Source: JWEE
Freiburg, 27 May 2013 Share of woody biomass in renewable energy Source: JWEE
Freiburg, 27 May 2013 Difficult questions on sustainable wood energy How much wood can be mobilised from European forests? At what cost: social, financial, biodiversity? « Sustainable » imports from overseas? What is the « best » use for wood? And who decides? Impact on traditional industries? Is the status quo an option?
Freiburg, 27 May 2013 How much wood could Europe supply?
Freiburg, 27 May 2013 Challenges of wood mobilisation Ownership: holding size, absentees, costs Management objectives: hunting, recreation, biodiversity vs. profit Market structure: roundwood, post- consumer wood… Infrastructure: roads, bridges, trucks … How acceptable is really intensive plantation silviculture in Europe?
Freiburg, 27 May 2013 European imports of wood energy are rocketing Driven by policy instruments for renewable energy Often for very large scale uses Main source (so far): North America Sustainability criteria for biomass energy being developed
Freiburg, 27 May 2013 UK fuelwood imports, Source: EFI Observatory for European Forests, Nancy
Freiburg, 27 May 2013 Netherlands imports of fuelwood, Source: EFI Observatory for European Forests, Nancy
Freiburg, 27 May 2013 « Cascade » approach: common sense or protectionism? Using wood for « noble » uses first and only afterwards for energy Aims to optimise material use, promote a level playing field Ignores ability to pay Protects profitability of wood industries Some policy « nudging » seems inevitable, but beware a planning approach
Freiburg, 27 May 2013 Should the forest sector prefer the status quo? If energy prices stay high, structural change in the sector is inevitable There are many opportunities What intensity of management is acceptable/necessary? Answer depends on wider debate on fossil fuels/nuclear/renewables
Freiburg, 27 May 2013 CHALLENGE 2: Innovation and competitivity
Freiburg, 27 May 2013 Consumption shows steady growth
Freiburg, 27 May 2013 Europe and North America are all net exporters of forest products
Freiburg, 27 May 2013 Net trade in forest products, , value
Freiburg, 27 May 2013 But the forest sector is losing ground in the broader economy
Freiburg, 27 May 2013 Threats and opportunities Internet/paperless office etc. Higher fossil energy price/carbon tax =>higher costs for competing materials and fuels, transport Concerns about sustainability Shrinking public budgets Uncertain outlook for housing
Freiburg, 27 May 2013 Innovation and structural change in the forest sector Global companies with big resources (but is their return on investment good enough?) Rise of intensive wood production on « investable timberlands » (5% of global forest area) Biorefineries and biofuels (competition with energy giants) EU R&D funding for forest based sector €600 million over 7 years (up from €156 million/four years)
Freiburg, 27 May 2013 Timberland index comparable to S&P 500 Source: Glauner et al. FAO 2012
Freiburg, 27 May 2013 A selective global phenomenon Source: Glauner et al. FAO 2012
Freiburg, 27 May 2013 Innovation is necessary To develop new products, systems and processes which are more attractive to clients, and reduce costs, so keeping up with the rest of the economy Innovation is also possible in forest management! Some examples from a recent workshop
Freiburg, 27 May 2013 Some companies are using their imagination
Freiburg, 27 May 2013 Smart packaging
Freiburg, 27 May 2013 All wood interior, high tech, 90% of power from the sun
Freiburg, 27 May 2013 How to encourage innovation? Needs many factors: investors, research/innovation clusters, education, fiscal/business environment, etc. While maintaining the concern for sustainability which is the core of the forest sector
Freiburg, 27 May 2013 How widespread is an innovative approach in the forest sector?
Freiburg, 27 May 2013 CHALLENGE 3: Leading the way to the green economy
Freiburg, 27 May 2013 What is the «forest sector in a green economy »? It contributes to the emerging green economy by Improving human well being and social equity while Significantly reducing environmental risks and ecological scarcities… It Minimises its carbon emissions Uses its resources efficiently and Is socially inclusive From: ECE/FAO Action Plan for the forest sector in a green economy
Freiburg, 27 May 2013 How green is the European forest sector? Sustainable wood supply Low waste, high recycling, low carbon Wood substitutes for carbon intensive materials Governance improving: criteria and indicators, national forest programmes, certification Ecosystem services « Decent green jobs »?
Freiburg, 27 May 2013 Felling rate, 2010 Source: ECE/FAO, Forest Europe, 2011
Freiburg, 27 May 2013 Europe: components of supply, 2010 Source: EFSOS II
Freiburg, 27 May 2013 Collection of recovered paper, Source: FAOSTAT
Freiburg, 27 May 2013 Five pillars of the Action Plan Sustainable production and consumption Low carbon sector Decent green jobs Valuation of and payment for ecosystem services Monitoring and governance
Freiburg, 27 May 2013 The forest sector, with its special experience of sustainability issues, has the potential to lead the way towards the green economy Does it have the dynamism and resources?
Freiburg, 27 May 2013 CHALLENGE 4: Communication
Freiburg, 27 May 2013 The voice of the forest sector is weak Underlying good will and concern about forests, in Europe and elsewhere The forest sector is economically/socially marginal in many countries Many misunderstandings and false perceptions Forest sector more concerned with internal tensions than external communication Defensive attitude by many, unwillingness to admit sector has any problems Lack of resources, political weight, PR professionalism (some exceptions)
Freiburg, 27 May 2013 Better communication is essential Clear message (dissociate from tropical issues, address energy, climate change, biodiversity) Events (e.g. European Forest Week, December 2013) Resources and structures Work with, not against, civil society There is progress, but much more is needed !
Freiburg, 27 May 2013 References ECE/FAO and Forest Europe. State of Europe’s Forests 2011 ECE/FAO. European Forest Sector Outlook Study II (EFSOS II) (ECE/TIM/SP.28) ECE/FAO Forest and economic development. A driver for the green economy in the ECE region (ECE/TIM/SP.31) FAOSTAT ( ECE/FAO ( Glauner et al. Timberland in instituional investment portfolios: can significant investement reach emerging markets? Forestry Policy and Institutions Working Paper 31. FAO 2012 Macroeconomic Programme of the EFI Observatory for European Forests (OEF). ECE/FAO Joint Wood Energy Enquiry (JWEE)
Freiburg, 27 May 2013 THANK YOU FOR YOUR ATTENTION Kit Prins