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Report from
Europe
Challenges and opportunities in hardwood markets
The 2024 International Hardwood Conference (IHC)
addressed latest market trends for temperate and tropical
hardwood sectors and the upside and downside risks going
forward.
The challenges facing the hardwood market were
identified as geopolitical stresses, climate change, trade
barriers and slow global GDP growth. But speakers also
highlighted opportunities.
These included emergence of new applications for
hardwood, notably in the form of engineered or mass
timber, and also progress in increasing hardwood forest
and tree species’ resilience to global warming-induced
changing weather patterns.
The event opened with analysis of the international
economic picture and its implications for the timber trade
from Christoph Schneider, Managing Director of Vienna-
based independent economic research institute Economica.
He said global political and economic uncertainty
remaining at a high level continues to undermine market
confidence. The combination of armed conflicts,
international trade disputes, and rising debt levels are
resulting in upward pressure on costs and price, while
eroding purchasing power. The rise in international and
domestic violent conflicts was a significant adverse factor
on trade and commerce, with the number of conflicts
increasing 15% from June 2023 to June 2024 and 1 in 7 of
the global population now being affected.
Mr. Schneider underlined the impact of the Suez Canal
crisis in particular, which has resulted in an 80% fall in it
shipping flow, pushing up freight costs and transit times,
notably from Asia to Europe.
Despite adverse international economic factors, however,
Mr. Schneider said the overall global economy was
proving resilient. There was no major impetus for an
upturn in 2025, but no indicators for contraction. Global
GDP growth is expected to be level with 2024 at 3.2%.
While there may be short-term fluctuations, global timber
prices were also predicted to be broadly stable in coming
years, albeit with downside risks, including conflict
escalation and uncertainty over tariffs and trade policy.
In terms of the leading players in the international
hardwood market, said Mr Schneider, the US remains the
biggest global trader by some way, with 2022 exports of
US $3.3 billion. Thailand ranked second, with exports of
around US$1 billion, Malaysia third at US$ 819 million,
Cameroon fifth at US739 million and Papua New Guinea
ninth at US $606 million.
Other tropical suppliers in the top 20 global hardwood
exporters were Brazil, ranked eleventh, Gabon thirteenth,
Congo fourteenth, Solomon Islands seventeenth and Lao
PDR twentieth.
Looking to the longer term, Mr. Schneider said the
prospects for the timber market should be positive. Global
population continues to rise, resulting in emergence of
potential new markets and ‘people will always need
wood’, he said.
A broad summary of prospects in the European hardwood
sector were addressed by EOS vice president for
hardwoods Maria Kiefer-Polz and ETTF President Ad
Wesselink. The last two years have been challenging for
the industry given high interest rates and inflationary
pressures, they said, and it was still unclear whether the
market had ‘bottomed out’ and 2025 would see some
recovery. Key factors continuing to affect business were
inevitably the rising costs of energy, labour and
technology.
A particular focus for the European industry and its
suppliers is the EU Deforestation Regulation. At the IHC
Franz-Xaver Kraft of German trade federation GD Holz
looked at its implications and it was discussed by a panel
comprising EOS Secretary General Silvia Melegari,
International Tropical Timber Technical Association
Managing Director Benoît Jobbé-Duval, Mike Snow
Executive Director of the American Hardwood Export
Council (AHEC), Hubert Inhaizer of PEFC International
and Xenia Marx of FSC International.
Mr. Kraft detailed the obligations imposed by the EUDR
on various timber trade players. Greatest demands, he said,
would be on importers and EU forest owners first placing
timber and wood products on the EU market.
They will be obliged to undertake due diligence to
mitigate risk of timber being implicated in deforestation
and forest degradation. SME traders and processors under
the EUDR must keep information on suppliers and
customers for five years, including due diligence statement
reference numbers, and pass relevant information from
suppliers to customers.
Meanwhile, non-SME traders and processors of wood
already placed on the EU market must collate information
on suppliers and customers, including that suppliers are
applying their due diligence systems correctly and taking
appropriate risk mitigation measures. Non-SME exporters
will also need to apply due diligence to their products and
provide a due diligence statement.
Mr. Kraft concluded that that the EUDR would add a layer
of administration on the timber sector and, he said,
industry bodies continue to press the EU for further
simplification of the rules and clear guidance.
The IHC took place days before the European Parliament
backed the proposal from the European Commission,
supported by the European Council, to push back
implementation of the EUDR a year to allow businesses
more time to achieve compliance. At the same time, the
Parliament voted to amend the Regulation, to add a ‘no-
risk’ category to supplier country deforestation risk
benchmarking. The original proposal was to have low,
standard and high-risk categories.
But in the panel discussion, participants welcomed the
likelihood of the year’s delay. The FSC and PEFC
speakers added, that while their certification schemes do
not act as a ‘free pass’ through the EUDR, their
traceability frameworks, risk assessment tools,
deforestation-free standards and documentation are now
closely aligned with the Regulation, providing a
foundation for compliance.
Harald Mauser of the European Forest Institute presented
on the potential impact on the timber industry of wider EU
legislation, notably regulation on the environment and
circular bioeconomic development.
He said the direction of travel was clearly towards greater
economic sustainability, including systematic phasing out
of fossil-fuels and reduction in dependence on energy-
intensive materials. Neither were achievable, he said,
without greater use of bio-based materials.
But to achieve the potential benefits of this for wood use,
the timber sector needed to ‘make its case’ to policy and
decision makers and consumers.
This required:
engaging with society and policy makers to
inform and raise awareness about and build trust
in the industry
and communication of the benefits forests and
wood provide to society; their contribution to
biodiversity, climate mitigating impacts and
economic development.
The industry should also build partnerships with finance
and investment sectors to ‘create investment tools adapted
to the specifics of forests and wood’.
An appraisal of developments in the tropical hardwood
sector was given by Jean-Christophe Claudon, Statistical
Assistant at the International Tropical Timber
Organisation.
He described how the industry has developed in the last 30
years. Production of industrial tropical roundwood over
that time has been stable at between 150-160 million cu.m.
But, significantly, production from plantations has trebled,
to give total tropical roundwood output of around 350
million cu.m. In Latin America in 2021 plantations
accounted for 81% of production, 66% in Southeast Asia
and 30% in Africa.
Mr. Claudon said ITTO data did not indicate likelihood of
a ‘sharp decrease in production, but the bulk will
increasingly ‘come from plantations.
World trade in tropical industrial roundwood round wood
declined 64% over the same period, with latest annual
value at US$2.5 billion. Key factors in this include trade
restrictions imposed by importer and exporter countries to
limit exports of unprocessed products and drive added
value production.
The import trade has also become more focused. Today
China, India, Portugal and Viet Nam account for 97% of
tropical industrial roundwood traded internationally.
In this time, while tropical sawnwood’s share of global
sawnwood production has remained at about 13%, output
has multiplied 1.2 times. Tropical sawnwood exports have
followed international economic conditions. Exports
jumped 62% from 2009-2018 but fell 15% during the
Covid pandemic. Since then, said Mr. Claudon they have
stalled somewhat, increasing 9%. Today total world
tropical sawnwood export trade is worth US$5.1 billion.
Tropical plywood production was stable at around 20
million cu.m from 1990 to 2008, but since has grown to 51
million m3, due to the increase of Chinese production
from 4 million cu.m to 27 million cu.m and India’s from 2
million cu.m to 12 million cu.m.
World trade in the product has halved since the mid-
1990s. Japanese imports declined in particular due to
factors including increased use of domestic product,
consumer concerns about tropical timber’s environmental
credentials, and lower availability of South Sea product.
By contrast, US imports trebled from 2017 to 2023. Most
previously came from China, but US importers have
turned more to Viet Nam
Tropical wood furniture exports have increased 6% of
total global wood furniture trade in 1990 to 24% (worth
US$21 billion).
This has been primarily due to industry growth in Viet
Nam. Its exports now account for 13% of global wood
furniture trade and 56% of tropical wood furniture trade.
90% of Vietnamese wood furniture exports go to the US,
the largest tropical wood furniture market which now
accounts for 75% of the international trade, worth US$15
billion in 2024.
On prospects in key tropical wood markets, Mr. Claudon
said China’s GDP growth forecast for 2024 of 4.8% is the
lowest in 30 years. But, while its import of tropical
industrial roundwood is expected to fall 5% to 5.9 million
cu.m, imports of tropical sawnwood are forecast up 7% at
7.4 million cu.m, and veneer up 16% at 2.4 million cu.m,
with plywood imports static at 18,000 cu.m.
The EU’s tropical wood imports are predicted to be at a
historic low due to economic uncertainty and low
consumer confidence. Tropical roundwood imports are
forecast to be down 4% at 995,000 cu.m, sawnwood 18%
at 730,000 cu.m, veneer 20% at 202,000 cu.m and
plywood 6% at 572,000 cu.m.
US tropical roundwood imports are forecast down 31% in
2024 at 5,000 cu.m, sawnwood down 6% at 254,000 cu.
m, and veneer down 12% at 16,000 cu.m, while tropical
plywood imports are predicted to rise 6% to 2.15 million
cu.m.
Japan’s first half housing starts in 2024 were down 4.5%
and are expected to be below 800,000 for the year. Mr
Claudon said its tropical sawnwood imports are predicted
to be down 4% to 63,000 cu.m and its tropical veneer
imports 21% at 8,000 cu.m. But its tropical industrial
roundwood imports are forecast up 6% at 40,000 cu.m and
its tropical plywood imports 8% ahead at 1.65 million
cu.m.
Against the backdrop of wider economic slowdown and a
struggling real estate sector, Chinese imports of hardwood
lumber from Europe and the US were down in 2023,
speaker James Xu told IHC delegates.
China’s beech log imports from Europe were 501,859
cu.m against 643,520 cu.m in 2022. European beech
lumber imports were down to 476760 cu.m from 577,645
cu.m, oak logs to 491,824 from 929,174 cu.m, and oak
lumber to 5,902 cu.m from 18,716 cu.m.
Chinese imports of US oak logs were down to 263,197
cu.m in 2023 from 325,028 cu. m in 2022, and imports of
US oak lumber down to 522,710 cu. m from 566,926
cu.m. Bucking the trend, however, were imports of US
walnut, with log imports up to more than 250,000 cu.m in
2023 and lumber to over 100,000 cu.m.
Mr. Xu underlined the importance of hardwood suppliers
in maintaining Chinese timber market share of
understanding the developing structure of the countries’
furniture sector. He highlighted that the industry had
become a ‘complete commercial closed loop’, with
advanced design as well as production capabilities.
Significantly, the sector has fully embraced on-line sales.
The contraction of Chinese demand has been a significant
factor in the difficulties of the US hardwood sector. AHEC
Executive Director Mike Snow said its production is
forecast to be down again in 2024. Through September
annualized output is expected to be 5.01 billion board feet.
That compared with 5.5 billion board feet in 2023, 6.7
billion board feet in 2021 and the industry’s peak of 12.6
billion board feet in 1999.
Interestingly, while US domestic hardwood consumption
historically followed US housing completions, more
recently the two seem to have ‘decoupled’. Completions
for 2024 are forecast at 1.58 million, while domestic
hardwood consumption is expected to be down for the
fourth consecutive year at 1.5 billion board feet.
US hardwood lumber exports in 2023 fell to 1.13 billion
board feet from 1.412 billion in 2022. This compared with
1.8 billion board feet in 2017. Most significant has been
the to the fall in exports to China. They topped 1 billion
board feet in 2017 but in 2023 were just over 400 million
board feet. Looking forward Mr Snow’s said the Chinese
market looked set to remain difficult.
The wider economy remains slow China’s population is
contracting and housing completions are falling. Mr Snow
said estimated Chinese housing demand from 2010 to
2019 was 8 million units annually but is forecast to fall to
4.6 million from 2025 through 2030.
The US hardwood sector, he said, is increasingly looking
to other markets and there was good news to report in
some. In the first half of 2024 its exports were ahead in SE
Asia (Philippines, Malaysia, Thailand, Indonesia and Viet
Nam), with a particularly strong performance in Viet Nam.
Exports to Mexico in the first half of the year also
increased and, while exports to MENA countries and
Pakistan were level in volume with first half of 2023 at
45,492 m3, they increased in value 5.5% to US$37.8
million.
Of the leading European markets for US sawn hardwood
in the first half, exports were down to Italy, Germany and
Spain, but up to its biggest European customer, the UK.
Besides supporting greater diversification of the US
hardwood sector’s export markets into the future, AHEC’s
marketing is also focused on increasing the diversity of
species export customers take. The aim is to increase
customer choice and market growth and make most
sustainable use of the US hardwood forest resource.
European hardwood’s growing prospects
Due to climate change, according to the Austrian Federal
Research Centre for Forests, hardwood is set to become a
more significant material for the wider timber and timber
end use sectors.
Silvio Schüler of the Centre’s forest growth, silviculture
and genetics department explained to the IHC that two key
factors were at play in this. One is that global warming
will limit the geographic range suited to softwood growth.
He showed maps of projected spruce distribution in
Europe for 2100 if global temperatures increase 2°C and if
the increase is 4°C. In the first, the area of suitable for
spruce is dramatically down. In the 4°C increase scenario
it is limited to an area around the alps. At the same time,
said Mr. Schüler, climate change is resulting in hardwoods
growing faster, notably oak. Illustrating this, while
Austria’s softwood growing stocks may have increased
15% since the early 90s, hardwood stocks have risen 39%.
The downside of faster growth is that the share of high-
quality hardwood may be more limited requiring
technological advances in how its used.
Also, climate change is increasing incidence of pests in
hardwood forests, such as the oak lace bug, and of fungal
disease such as ash die-back. But Mr. Schüler said
silvicultural research is working to improve tree resilience
to both. He highlighted his organisation’s work on
developing ash resistance to die-back. This involves
identification of ‘elite’ resistant trees and creation of exact
genetic clones which can be used to populate forests.
“Technological advance is required to make better use of
the hardwood resource,” said Mr Schüler, ‘but long-term
perspectives for hardwood are [improving] due to
improved growth and changing silviculture, which will
enable them to contribute more strongly to climate-change
mitigation.”
In terms of hardwood use, Simon Lux and colleagues from
Wood Research Austria, described its work in evaluating
glue laminated hardwoods. Involving academia and timber
businesses, this involved putting the material through
extensive performance testing. The focus in particular was
on hybrid products, comprising a mix of hardwood and
softwood, so giving a product that provides good strength
to weight at a competitive price. These included oak and
spruce and beech and spruce hybrids. Of the two, showed
greater resilience in four-point bending tests.
From Wood K plus, the Austrian Competence Centre for
Wood Composites & Wood Chemistry Christian
Hansmann and Catherine Rosenfeld presented its latest
research in conjunction with industry to broaden
applications of hardwood through technical advances.
This included the ‘Dauerbuche’ project to increase the
durability of BauBuche laminated beech veneer lumber
from Pollmeier, a structural material used in buildings as
large and technically demanding as multi-storey car parks.
Other projects focused on thermally modified hardwoods,
including ash, poplar and aspen, and on
adhesive/hardwood interactions to improve bonding
strength. Research is also directed on improving hardwood
linear cutting processes, development of new hardwearing
oil finish formulations and new testing methods for
performance of fire retardants with hardwood.
The key to further advancing hardwood performance is
combining operational experience of manufacturers with
the scientific knowledge of the research sector, concluded
the Wood K Plus presentation, underlining that
‘hardwoods still have an untapped potential for further
exploitation’.
See https://ihc2024.at/presentations.html
Extra climate funding for tropical forest countries
The UK has pledged new funding to help tropical
countries maintain forests and capitalise on the
international carbon market. At the COP29 UN Climate
Change Conference in Baku, the UK government said it
was providing an additional £239 million over and above
the £11.6 billion 2021-2026 ‘climate finance’ programme
it is already committed to. The latter encompasses £3
billion of ‘nature protection’ projects and £1.5 billion
‘dedicated to protecting and restoring forests’.
The new funding, says the UK, will ‘help countries with
vital tropical forests to tackle climate change, conserve
nature, livelihoods and wildlife’. The beneficiaries will
include Colombia and Indonesia.
£188 million of the funding will go to the World Bank
international Scaling Climate Action by Lowering
Emissions (SCALE) partnership programme. “This
supports development of high-integrity forest carbon
markets to ensure the buying and selling of carbon credits
to drive emission reductions,” said the UK government
statement, adding that it has committed ‘to improve the
integrity and use of voluntary carbon and nature markets’
more broadly.
Another £48 million of the funding package will comprise
‘blended finance to unlock private investment in
sustainable forest enterprises across the tropical forest
belt’. This will be undertaken under the Mobilising
Finance for Forests programme. The latter is a joint
initiative between UK government and Dutch
entrepreneurial development bank FMO and provides
financing to companies and investors to encourage them to
invest more in activities that protect and restore forests.
The £3 million balance goes to the UN Framework
Convention on Climate Change ‘to help countries protect
their forests and realise their full climate change
mitigation potential by reducing deforestation, restoring
forests and providing benefits to local communities that
depend on forests’.
Announcing the funding at COP29, UK Energy Minister
Ed Milliband said, ‘halting and reversing forest loss is
essential to keeping global heating under 1.5°C’. “Forests
are the lungs of our planet – without them climate security
is impossible,” he said. “We’re determined to play our part
in mobilising finance to protect and restore global forests
in these critical years for climate action. Providing this
funding now helps prevent the escalating costs of climate
catastrophe at home and abroad.”
See: https://www.gov.uk/government/news/uk-unveils-funding-
boost-to-help-forest-nations-fight-climate-change
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