1. Four Policy Challenges for the European Forest Sector Kit Prins

2. 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

3. Freiburg, 27 May 2013 Forest cover varies widely

4. Freiburg, 27 May 2013 Total value added by the forest sector

5. Freiburg, 27 May 2013 Wood is by far the most important source of revenue

6. Freiburg, 27 May 2013 Supply and demand 2010 to 2030

7. Freiburg, 27 May 2013 CHALLENGE 1: Sustainable wood energy

8. 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!

9. Freiburg, 27 May 2013 Share of woody biomass in total primary energy supply Source: JWEE

10. Freiburg, 27 May 2013 Share of woody biomass in renewable energy Source: JWEE

11. 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?

12. Freiburg, 27 May 2013 How much wood could Europe supply?

13. 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?

14. 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

15. Freiburg, 27 May 2013 UK fuelwood imports, 1995-2010 Source: EFI Observatory for European Forests, Nancy

16. Freiburg, 27 May 2013 Netherlands imports of fuelwood, 1995-2010 Source: EFI Observatory for European Forests, Nancy

17. 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

18. 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

19. Freiburg, 27 May 2013 CHALLENGE 2: Innovation and competitivity

20. Freiburg, 27 May 2013 Consumption shows steady growth

21. Freiburg, 27 May 2013 Europe and North America are all net exporters of forest products

22. Freiburg, 27 May 2013 Net trade in forest products, 2009-2010, value

23. Freiburg, 27 May 2013 But the forest sector is losing ground in the broader economy

24. 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

25. 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)

26. Freiburg, 27 May 2013 Timberland index comparable to S&P 500 Source: Glauner et al. FAO 2012

27. Freiburg, 27 May 2013 A selective global phenomenon Source: Glauner et al. FAO 2012

28. 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

29. Freiburg, 27 May 2013 Some companies are using their imagination

30. Freiburg, 27 May 2013 Smart packaging

31. Freiburg, 27 May 2013 All wood interior, high tech, 90% of power from the sun

32. 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

33. Freiburg, 27 May 2013 How widespread is an innovative approach in the forest sector?

34. Freiburg, 27 May 2013 CHALLENGE 3: Leading the way to the green economy

35. 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

36. 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 »?

37. Freiburg, 27 May 2013 Felling rate, 2010 Source: ECE/FAO, Forest Europe, 2011

38. Freiburg, 27 May 2013 Europe: components of supply, 2010 Source: EFSOS II

39. Freiburg, 27 May 2013 Collection of recovered paper, 1961-2011 Source: FAOSTAT

40. 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

41. 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?

42. Freiburg, 27 May 2013 CHALLENGE 4: Communication

43. 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)

44. 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 !

45. Freiburg, 27 May 2013 References  ECE/FAO and Forest Europe. State of Europe’s Forests 2011  ECE/FAO. European Forest Sector Outlook Study II 2010-2030 (EFSOS II) (ECE/TIM/SP.28). 2011  ECE/FAO Forest and economic development. A driver for the green economy in the ECE region (ECE/TIM/SP.31). 2013  FAOSTAT (http://www.fao.org/forestry/statistics/en/), ECE/FAO (http://www.unece.org/forests/fpm/onlinedata.html)http://www.fao.org/forestry/statistics/en/http://www.unece.org/forests/fpm/onlinedata.html  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). http://www.eficent.efi.int/portal/oef/http://www.eficent.efi.int/portal/oef/  ECE/FAO Joint Wood Energy Enquiry (JWEE) http://www.unece.org/forests/jwee.html http://www.unece.org/forests/jwee.html

46. Freiburg, 27 May 2013 THANK YOU FOR YOUR ATTENTION Kit Prins Kit.prins@gmail.com +41 78 739 1491