Enterprise Directorate-General

Sustainable development and the EU Forest-based Industries

Per-Ove Engelbrecht

Head of Forest-based Industries Unit

Enterprise Directorate-General

European Commission

Wood working32 billion €

value added

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24

Printing44

Pulp & paper

23

FOREST-BASED INDUSTRIESFOREST-BASED INDUSTRIES

Woodworking

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Printing

Pulp & paper

Wood furniture

Wood-based energy production

FOREST-BASED INDUSTRIESFOREST-BASED INDUSTRIES

Woodworking

Paper converting

Printing

Pulp & paper

Wood furniture

Wood-based energy production

MACHINERY INDUSTRY

FORESTRY

PULP AND PAPER PRODUCTION

PULP & PAPER VALUE CHAINPULP & PAPER VALUE CHAIN

FORESTRY

CONVERTING PACKAGING PRINTING

RECYCLING

WOODWORKING

PLYWOOD SAWMILLS PANELS

WOODWORKING VALUE CHAINWOODWORKING VALUE CHAIN

FORESTRY

BUILDING MATERIAL FURNITURE

HORIZONTAL EU POLICIESHORIZONTAL EU POLICIES

• ENVIRONMENT

• ENERGY

• RESEARCH AND DEVELOPMENT

• TRADE

• INTERNAL MARKET

• COMPETITION

FOREST-BASED INDUSTRIES COMMUNICATION

FOREST-BASED INDUSTRIES COMMUNICATION

• SIX PRIORITY AREAS:– GLOBALISATION – ENLARGEMENT– ENVIRONMENT AND ENERGY– INNOVATION AND TRAINING– REGULATORY FRAMEWORK– IMAGE TO SOCIETY

• ADOPTED BY THE COMMISSION 1999• ON-GOING EVALUATION

FORESTRYFORESTRY

COUNCIL RESOLUTION ON A FORESTRY STRATEGY FOR THE EUROPEAN UNION 1998

– FOREST POLICY A MEMBER STATE COMPETENCE

– CO-ORDINATION, COMMUNICATION AND CO-OPERATION WITHIN THE COMMISSION AND WITH AND AMONG MEMBER STATES

EU FORESTRY STRATEGYEU FORESTRY STRATEGY

• COMMUNITY POLICIES & PROGRAMMES

• RURAL DEVELOPMENT

• MONITORING

• BIODIVERSITY

• CLIMATE CHANGE

• RENEWABLE ENERGY SOURCES

KEY ISSUESKEY ISSUES

• SUSTAINABLE AND COMPETITIVE PRODUCTION

• LISBON STRATEGY

• FRAMEWORK CONDITIONS FOR INDUSTRY

FOREST-BASED INDUSTRIES’ STORYFOREST-BASED INDUSTRIES’ STORY

POSITIVE:– RENEWABLE AND RECYCLABLE RAW

MATERIAL– CLOSED CARBON CYCLE– CARBON BINDING PRODUCTS– RENEWABLE ENERGY– EFFICIENT PRODUCTION

FOREST-BASED INDUSTRIES’ STORYFOREST-BASED INDUSTRIES’ STORY

NEGATIVE:– THE “USE” OF THE FORESTS

FELLINGS

EFFECTS ON BIODIVERSITY

EFFECTS ON THE LANDSCAPE

– “SMOKESTACK” IMAGE

STRATEGIC ISSUE FOR THE FOREST-BASED INDUSTRIES

SUSTAINABLE FOREST MANAGEMENT

STRATEGIC ISSUE FOR THE FOREST-BASED INDUSTRIES

SUSTAINABLE FOREST MANAGEMENT

• NATIONAL FORESTRY AND RELATED LAWS

• CERTIFICATIONIN EU: 55 % COVERAGE OF TWO INCOMPATIBLE SYSTEMS

• IMAGE• DISINVESTMENTS IN FOREST LAND• MOVING FORWARD IN VALUE CHAIN

STRATEGIC ISSUERECYCLING OF PAPERSTRATEGIC ISSUE

RECYCLING OF PAPER

• INDUSTRY COMMITMENT : RECYCLING RATE OF 56% 2005

• HALF OF THE FIBER RAW MATERIAL IN PAPER PRODUCTION IS RECYCLED PAPER

• EXTENDED COMMITMENT ?

STRATEGIC ISSUEENERGY

STRATEGIC ISSUEENERGY

• ENERGY PRICE

• THE USE OF BIOMASS – IN PULP & PAPER PRODUCTION ~ 50 %

• RENEWABLE ENERGY SOURCES

• HIGH RAW MATERIAL EFFICIENCY IN PRODUCTION

STRATEGIC ISSUE RESEARCH AND DEVELOPMENT

STRATEGIC ISSUE RESEARCH AND DEVELOPMENT

• MORE EFFICIENT RAW MATERIAL AND ENERGY PROCESSES

• CLOSER CUSTOMER ORIENTATION MEANS INNOVATIVE SOLUTIONS

• MATERIAL COMPETITION

THE STRENGHTH OF THE EU PULP & PAPER INDUSTRIES

THE STRENGHTH OF THE EU PULP & PAPER INDUSTRIES

• EU PULP & PAPER INDUSTRY IS HIGHLY EFFICIENT

• LABOUR PRODUCTIVITY IS 20 % HIGHER THAN IN USA

• MORE MODERN MACHINERY• BETTER ADAPT TO ENVIRONMENTAL

DEMANDS• IN MANY WAYS AT THE TECHNOLOGICAL

EDGE• 2 OUT OF TOP 5 WORLD LEADING PAPER

PRODUCERS ARE EU-BASED

CHALLENGES FOR THE PULP & PAPER INDUSTRIES

CHALLENGES FOR THE PULP & PAPER INDUSTRIES

• COST OF WOOD SUPPLY• INCREASING WOOD SUPPLY RESTRICTIONS

COULD BE COST DRIVERS• COST OF EXTERNAL ENERGY SUPPLY• INCREASING IMPORTS OF PULP AND PAPER

PRODUCTS• STRUCTURAL CHANGES AND MEDIA

COMPETITION IN PRINTING• HIGHLY CYCLICAL

OPPORTUNITIES FOR THE PULP & PAPER INDUSTRIES

OPPORTUNITIES FOR THE PULP & PAPER INDUSTRIES

• RENEWABLE AND RECYCLABLE RAW MATERIAL

• CARBON EFFICIENCY

• RAW MATERIAL AND ENERGY EFFICIENCY

• HIGH PRODUCTIVITY

• INCREASING GLOBAL DEMAND

CHALLENGES FOR THE WOODWORKING INDUSTRIES

CHALLENGES FOR THE WOODWORKING INDUSTRIES

• COST OF WOOD RAW MATERIAL• RELATIVELY HIGHER LABOUR COSTS• FEW LARGE PLAYERS• FRAGMENTED EU MARKET DUE TO

CONSUMER PREFERENCES AND STANDARDS• GENERALLY LOW EU GROWTH WITH

STAGNATING AND AGEING POPULATION• MATERIAL COMPETITION: STEEL,

CONCRETE, PLASTIC

OPPORTUNITIES FOR THE WOODWORKING INDUSTRIES

OPPORTUNITIES FOR THE WOODWORKING INDUSTRIES

• RENEWABLE RAW MATERIAL• CARBON BINDING• RECYCLING FOR ENERGY• ENERGY EFFICIENT PRODUCTION• APPLICATION ADVANTAGES• ROOM FOR EXPANSION IN CERTAIN

PRODUCT MARKETS• SOME EXPORT POTENTIALS

SUMMARYSUMMARY

• AN OPPORTUNTY TO BE A SUSTAINABLE AND COMPETITIVE SECTOR (ECONOMIC, SOCIAL, ENVIRONMENTAL)

• STRATEGIC ISSUE 1: SUSTAINABLE FOREST

MANAGEMENT

• STRATEGIC ISSUE 2: RECYCLING OF PAPER

• STRATEGIC ISSUE 3: ENERGY

• STRATEGIC ISSUE 4: RESEARCH AND DEVELOPMENT

THANK YOU

FOR YOUR ATTENTION