In the context of the war in Ukraine, Romanian Wood Industry Association – Prolemn asks the Government and all Ministries for a clear position on maintaining the sustainable management of forests, for supporting the wood processing industry and eliminating the blocks that have caused an artificial deficit of wood resource on the market.

In the beginning of the price hike for energy, in November last year, Prolemn drew attention that blocking access to the wood resource is equivalent to stopping the nuclear power plant at Cernavoda.

Nevertheless, access to wooden resource is still impacted by the environment assessment of FMUs procedure.

At the Forest Forum in December we pointed out that the wood resource is the ignored solution for decarbonating large segments of the national economy, from energy to packaging and constructions – via the substitution effect of other products with much greater environmental footprint.

It is still ignored.

In January we showed that the wood industry is facing an artificial resource deficit, given that the supply of wood was halved at the main auctions organized by RNP – Romsilva. Publicly announced factory closures are just the tip of the iceberg. Virtually the entire wood industry cuts down its production at the level of the artificially reduced resource.

The price of the artificial resource crisis in the wood industry is paid by the population through the prices of timber, furniture, firewood, pellets, packaging, paper and cardboard, and many other wood products.

In February, we conducted a comprehensive survey of economic operators in the wood and furniture industry. 90% of respondents (89.4%) believe that we have an artificial wood crisis now and 95.8% believe that the direction of public policies for the sector is wrong. About 61% of respondents predicted that they would suffer a significant reduction in production soon, and one in five (19% of the total) estimated a drastic reduction in activity, by at least 50%.

February was also the month that enshrined the fact that Romania’s forests are a priority only in political statements, and the timber resource remains an ignored resource: through the National Strategic Plan, the Ministry of Agriculture and Rural Development proposed an allocation of only 1% of NSP for forests, compared to an average of at least 5% in almost all European countries.

Only 1% for 30% of Romania’s forest-covered area! Practically nothing.

Against this background of artificial resource crisis in the wood industry, the war in Ukraine broke out, with the almost complete blockage of resource supply flows in Russia, Belarus and Ukraine. These are countries of origin for imports of hundreds of thousands of cubic meters of softwood lumber, tens of thousands of tons of pellets, chipboard, MDF, etc. A major disruption to supply flows.

In this context, the Association of the Wood Industry – Prolemn carried out an extensive consultative process, with the participation of a large number of economic operators from all branches of the wood industry, whose conclusions are set out below.

Meaningful measures to support the sector

In the wake of the war in Ukraine, which has led to a shortage of resources and an explosion in prices in many market segments with endangering the energy security at European level, there is an urgent need for action to make the best possible use of what is available – our national resource. We appreciate that the wood resource from Romania’s sustainably managed forests, capitalized by the wood industry, is a solution that can support energy security, reduce import dependence, stimulate economic growth and at the same time pursue the objectives of developing a green economy based on renewable natural resources, with a low impact on the environment.

Prolemn calls for a clear position of the Government and all ministries to uphold sustainable  forest management active, to support the timber industry, and to remove bottlenecks that have led to an artificial shortage of resources in the timber market.

  1. Measures with immediate, short-term impact:
  • approval of an annual quota for timber harvesting by the Board of Directors of RNP – Romsilva at the level of the possibility established by the forest management plans, of 11-13 million cubic meters, according to the provisions of the Regulation for the capitalization of timber.
  • the immediate offering on the market, on stump, of the timber resource scheduled to be placed on the market as shaped wood, under the conditions of the procedures for contracting operating services without being awarded.
  1. Medium-term measures:
  • Starting again the public debate the draft amendment to GD 497/2020 for the approval of the Rules on the origin, movement, and marketing of timber, so as to comply with the principles of EUTR 995/2010:
    • economic activity should not be hampered by excessive administrative burdens.
    • traceability should be pursued mainly at the first placing of timber on the market, with a focus on control of risk areas and activities.
    • to encourage voluntary compliance, by implementing own due diligence systems of economic operators. The SUMAL 2.0 system must be a basis for supporting the economic operators’ own systems.
    • to have separate norms for the own consumption of the small owners, according to the provisions of the Forestry Code.
  • amending Ministerial Orders 1946 and 1947/2021 on environmental assessment and revision of the environmental assessment of forest management, so that the procedure is smooth and does not lead to blockages in the application of forest management, affecting the timber resource available in the market.
  1. Long-term measures:
  • developing a national forestry strategy and pursuing its implementation, with the aim of capitalizing on the potential of the forest-timber sector to simultaneously support economic growth based on renewable bio-resources and pursuing environmental objectives, following the principles of cascading timber resources and objectives to maximize the substitution effect of wood products and biomass used as an energy source for other products with a much higher environmental footprint.
  • implementation of a timber capitalization system that prioritizes access to resources for economic operators that add the most economic, social and environmental value to the timber resource, in proportion to the consumption of timber from the previous year – see Polish model.

In the context of the crisis of fossil energy resources and resources in general, wood from sustainably managed forests is a resource for development, decarbonisation and cost reduction. If we persist in ignoring this renewable resource, if we continue to raise administrative hurdles and create artificial resource deficits, the cost will ultimately be paid by the entire population, through the price of wood products. And, unfortunately, also the most socially and economically disadvantaged layers of the population, left to fend for themselves. They rely on firewood for heating, and are left outside of the support schemes for energy and gas.

Cătălin Tobescu

President, Asociația Industriei Lemnului - Prolemn

Specific measures for segments of the processing industry

The following were identified as priorities to be addressed, resulting from an extensive consultation on branches of the timber industry:

Softwood processing industry:

  • authorization of cutting facilities, with minimum authorization requirements – for example, wood peeling.
  • simplification of port timber import procedures.

Hardwood processing industry:

  • the extension of the reduced VAT rate of 5% and for biomass resulting from primary wood processing used for heating, with the same arguments as for the reduced VAT rate for firewood.

Board industry:

  • development of wood recycling policies and legislation.

Biomass energy industry:

  • the inclusion in the certifiable biomass for the support schemes for renewable energy of biomass from harvesting residues, from orchards, tree grooming, administration of green spaces, with the elimination of the bureaucracy for issuing transport permits for this biomass.
  • ensuring the confidentiality and secrecy of trade by public access applications of the SUMAL system, in particular in the case of interrogation of data by means of means of transport and public tracking of the transport route.

Construction industry / Wood products other than furniture:

  • support for a green procurement system to promote timber construction on the guidelines of the European Renovation Wave project
  • introduction of quality control standards for wooden constructions.
  • updating ISU certification standards for wooden constructions.