The explosive evolutions on the firewood market – the lack of resource and doubling in prices – have detrimental effects on the entire wood market and will lead to an extra diminishing of raw materials and resources for the wood processing industry. Resource that is essential for processing is converted into firewood and energy, while potential biomass sources are still excluded by over-regulation and under-financing.

Romania faces a resource crisis and explosive prices for energy and gas. Gas prices skyrocketed to 120 Euros/1 MWh equivalent, and retail consumers report even hikes to 150 Euros/MWh. At the same time, we witness an almost parallel increase in firewood prices. Where does the wood resource deficit come from? Why isn’t enough wood on the market?

The ties between the energy market and the wood market

In Europe, 60% of the wood resource is used in various forms for energy productions, and the percentage is probably bigger in Romania, due to:

  • The population’s firewood consumption – more than 3.5 million households use wood for heating.
  • The growing sector of thermal and electrical energy from biomass.
  • The growing use of wood pellets and briquettes.
  • The internal consumption of the wood industry, which uses thermal energy for drying timber.

Energy production is thus using a lot of wood, and it’s natural that wood prices are tied to the energy market. The trouble for the Romanian wood industry arises when resource that should be used for industrial processing is sold for firewood or biomass. This entails enormous costs for the nation’s GDP and commercial balance.

In terms of calorific power, a tonne of wood biomass equals 2-4.2 MWh, depending on the wood species and humidity. If used as pellets or briquettes, it may equal 4.8 MWh in energy equivalence. At the current market rates for firewood (around 100 Euros/tonne), heating with wood is 2.5-5 times cheaper than gas.

Using pellets and briquettes at peak energy efficiency, even at a price of 240 Euros/tonne it is still twice as cheap as gas.

The hike in firewood prices puts pressure on the availability and the prices of industrial resources for wood processing. Prices of roundwood in Romania, at about 120-140 Euros/m3 for softwood and 120 Euros/m3 for beech, are at least 20-40% bigger than European prices, which harms the competitivity of the Romanian industry and leads to reduced production capacities.

When 1 m3 of firewood costs more than 100 Euros, beech roundwood goes straight to the firewood depot and no sorting is even performed. Many private forest owners are prioritizing their wood resource towards firewood – the resource coming from more than 2 million hectares of forest – again, without sorting.

Bureaucracy and lack of investments are artificially constricting the wood market

At this moment, various types of biomass sources cannot be used for energy production due to legislation – including processing residues, thin logs from forestry works, imported biomass. Bureaucracy stands against transporting traceably, using the SUMAL system, plant biomass from parks and lawns, agriculture, fruit trees pruning, energetic cultures etc.

The result is a contraction of the offer and an increased competition on the meagre resource, that is also claimed by the board producing industry. For pellets and briquettes the resource is so scarce that many production facilities simply shut down.

At the national level, a further pressure comes from a normative blocking of forest management plans until environmental assessments are complete, as well as SUMAL-induced difficulties in appraising wood mass coming from smaller properties or from outside the forestry fund. All these obstacles are extracting resource from the market and creating artificial deficits.

It is a perfect storm. Is the price of wood in Romania big or small? Compared to the European market, it is very high. Compared to the prices of gas and energy in Romania, it is very low. The Romanian market will pay – by the price of firewood and wood-derived products – the passing of laws that have no reasonable basis for the forest-wood sector, as well as the chronical lack of investments. A double loss taken by the population in the firewood prices and the Romanian wood industry, as the lack of resource and high prices keep Romanian products off the market.

Cătălin Tobescu

President, Asociația Industriei Lemnului - Prolemn

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