EUROPEAN FOREST SECTOR OUTLOOK STUDY 1960-2000-2020 - MAIN REPORT

Table of Contents

Note

The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries.

Abstract

The European Forest Sector Outlook Study presents long term trends for supply and demand of forest products (roundwood, sawnwood, panels, pulp, paper, non-wood products) and services and outlook to 2020, in western and eastern Europe and four major CIS countries, including Russia. It reviews trends for the forest resource, trade, markets and recycling. It stresses the future shift in the balance of the sector to the east, and the importance of cross-sectoral issues, notably consequences for the forest sector of energy, environment and trade policies, which are examined in some detail. The study is based on a major collaborative effort by experts in the countries covered by the study, under the auspices of the UNECE Timber Committee and the FAO European Forestry Commission. The study identifies a number of major policy issues and proposes some policy recommendations, as a basis for future debate.

PREFACE

ABBREVIATIONS USED IN THE REPORT

EXECUTIVE SUMMARY

1 INTRODUCTION

1.1 Aims and objectives

1.2 Scope of the study

1.2.1 Time horizon

1.2.2 Definition of the forest sector

1.2.3 Geographical scope

1.3 Methodology

1.3.1 Interactions between the forest sector and society

1.3.2 Major components of the outlook study

1.3.3 Additional outlook study analyses

1.3.4 Scenario development

1.4 Data sources, definitions and measurement conventions

1.4.1 Forest resources

1.4.2 Forest products

1.5 Structure of the report

1.6 European network of outlook study experts and contributors

2 TRENDS AND CURRENT STATUS OF THE FOREST SECTOR

2.1 Forest resources

2.1.1 Total forest area

2.1.2 Area of forest available for wood supply

2.1.3 Growing stock of forest available for wood supply

2.1.4 Annual increment of forest available for wood supply

2.1.5 Comparison of removals and increment

2.2 Forest quality and forest management

2.2.1 Forest health

2.2.2 Forest management

2.3 Production and consumption of processed wood products

2.3.1 Sawnwood production and consumption

2.3.2 Wood based panel production and consumption

2.3.3 Paper and paperboard production and consumption

2.3.4 Structural changes in the markets for processed wood products

2.4 Production and consumption of raw materials and intermediate products

2.4.1 Industrial roundwood

2.4.2 Wood and other fibre pulp

2.4.3 Recovered paper

2.5 Technology and the raw material balance

2.5.1 Forest product processing technology, conversion factors and recycling

2.5.2 Wood raw material demand by sector

2.5.3 Wood raw material supply by source

2.6 International trade in wood products

2.6.1 Growth in international trade in wood products

2.6.2 The position of Europe in global markets

2.6.3 The potential for growth in exports of wood products from Europe

2.7 Prices of wood products

2.7.1 Real prices of solid wood products

2.7.2 Real prices of wood pulp and paper

2.7.3 Real prices of standing timber (stumpage)

2.8 Woodfuel

2.9 Non-wood forest products

2.9.1 Statistical issues

2.9.2 Edible plant products

2.9.3 Animal products

2.9.4 Medicinal plants

2.9.5 Bark, foliage and vegetation (including cork and cork products)

2.9.6 Christmas trees

2.9.7 Other non-food products

2.9.8 Value of NWFP production compared to wood production

2.10 Forest services

2.10.1 Recreation

2.10.2 Mitigation of climate change

2.10.3 Conservation of biodiversity

2.10.4 Protection of soil, water and infrastructure

2.10.5 Cultural and spiritual aspects

2.11 Forestry policies

2.11.1 Aspects of forestry policy that have remained quite stable

2.11.2 Recent changes in forestry policy

2.12 The contribution of the forest sector to national economies

2.12.1 Forest sector employment

2.12.2 Value-added in the forest sector

2.12.3 Forest products trade

3 DRIVING FORCES IN THE FOREST SECTOR

3.1 Exogenous factors

3.1.1 Population

3.1.2 Income

3.1.3 Accessibility of forests

3.1.4 Environmental factors

3.2 Demands of society

3.2.1 Changes in human needs

3.2.2 Changes in industrial demand for forest products

3.3 Policy and market frameworks

3.3.1 Background

3.3.2 Methodology

3.3.3 Greater emphasis on biodiversity and nature conservation

3.3.4 Agricultural, rural and regional development policies

3.3.5 Consequences of the transition process

3.3.6 Globalisation, innovation and market structures

3.3.7 Energy and environment

3.4 Three future scenarios for the forest sector

3.4.1 Baseline scenario

3.4.2 Conservation scenario

3.4.3 Integration scenario

4 THE OUTLOOK FOR THE FOREST SECTOR

4.1 Production and consumption of processed wood products

4.1.1 Sawnwood production and consumption

4.1.2 Wood based panel production and consumption

4.1.3 Paper and paperboard production and consumption

4.1.4 Structural changes in the markets for processed wood products

4.2 Production and consumption of pulp, recovered paper and wood residues

4.2.1 Recovered paper

4.2.2 Wood pulp

4.2.3 Wood residues

4.3 The raw material balance and the outlook for industrial roundwood

4.3.1 Wood raw material demand by sector

4.3.2 Wood raw material supply by source

4.3.3 Industrial roundwood

4.3.4 The wood raw material balance

4.4 Woodfuel

4.5 Other forestry benefits

4.5.1 Non-wood forest products

4.5.2 Forest services

4.5.3 Forestry employment

4.6 Alternative scenarios for production and consumption

4.6.1 Sawnwood production and consumption

4.6.2 Wood based panel production and consumption

4.6.3 Paper and paperboard production and consumption

4.6.4 Wood pulp

4.6.5 Industrial roundwood

4.6.6 Other factors that may affect the projections

4.7 Forest resources and forest management

4.7.1 Area of forest available for wood supply

4.7.2 Growing stock of forest available for wood supply

4.7.3 Annual increment of forest available for wood supply

4.7.4 Comparison of removals and increment

4.7.5 Forest management

5 CONCLUSIONS AND RECOMMENDATIONS

5.1 Background

5.2 Summary of the main conclusions

5.3 General market outlook

5.4 Shifting balance in wood production

5.5 Cross-sectoral policy impacts

5.5.1 Recycling and residue use will continue to expand

5.5.2 Renewable energy policies will increase the demand for wood

5.6 Contribution to sustainable development

5.6.1 Europe’s expanding forest resource

5.6.2 Fellings and annual increment in Europe

5.6.3 Biodiversity and nature conservation

5.7 Future economic conditions in the forest sector

5.7.1 Forest products trade

5.7.2 Economic viability of forest management

5.7.3 Forest sector institutions will continue to evolve rapidly

5.8 Are European forests sustainable in the long term?

5.9 Policy recommendations

5.9.1 Need for policies to stimulate the sound use of wood (governments, forest industries, forest owners)

5.9.2 Urgent need to address threats to sustainability in south-east Europe and the CIS sub-region
(governments, donors)

5.9.3 Need to devote policy attention to the consequences of the dynamic developments in Eastern Europe
and the CIS sub-region (governments)

5.9.4 Improve the economic viability of forest management in Europe (governments, forest industries,
research community)

5.9.5 Balanced implementation of wood energy policies (governments)

5.9.6 Forestry, wood and climate change (governments, research institutions)

5.9.7 Forest law enforcement and governance (governments, all stakeholders)

5.9.8 Institutional change in countries in transition (governments, international institutions)

5.9.9 Monitoring environmental and social benefits from forests and forestry (governments, international
organisations, research institutions)

5.9.10 Necessity of a cross-sectoral approach (governments, all stakeholders)

5.9.11 Need to control forest fires, and to intensify international cooperation in this area (governments,
forest owners)

5.9.12 Employment and the work force (governments, employers, unions)

5.9.13 Developing the region’s comparative advantages (forest industries, governments)

5.9.14 The European forest sector in the global context (all stakeholders)

6 REFERENCES

LIST OF TABLES

Table 1 Availability of production and trade statistics for wood raw materials

Table 2 Conversion factors used in the wood raw material balance analysis

Table 3 The European wood raw material balance (average of the years 1996 to 2000)

Table 4 Value of exports of wood products to and from Europe in 2000 (in billion Euros)

Table 5 Intensity of European trade in wood products in 2000 (Trade Intensity Index)

Table 6 Production of forest fruits and berries in some European countries in the 1990s

Table 7 Production of mushrooms and truffles in some European countries in the 1990s

Table 8 Production of honey in some European countries in the 1990s

Table 9 Production of game meat and pelts in some European countries in the 1990s

Table 10 Production of medicinal plants in some European countries in the 1990s

Table 11 Recent trends in the production of natural cork in Europe

Table 12 Production of decorative foliage in some European countries in the 1990s

Table 13 Production of Christmas trees in some European countries in the 1990s

Table 14 The total average annual value of NWFP production in Europe in the mid-1990s
(in EUR million at 2000 prices and exchange rates)

Table 15 Summary of forest visitor number estimates for a number of European countries in the mid-1990s

Table 16 Projections of average annual economic growth in Europe from 2000 to 2020 under three different growth scenarios

Table 17 Trends and projections in real per capita GDP in Europe from 1990 to 2020 under the baseline scenario (at 2000 prices and exchange rates)

Table 18 The relationship between the hierarchy of human needs and demands placed on the forest sector

Table 19 Conclusions of the scenario analysis about the likely probability and impact of greater emphasis
on biodiversity and nature conservation in the future

Table 20 Conclusions of the scenario analysis about the likely probability and impact of changes in
agriculture and rural development policies in the future

Table 21 Conclusions of the scenario analysis about the likely probability and impact of changes to the
transition process in the future

Table 22 Conclusions of the analysis about the likely probability and impact of trends towards
globalisation, innovation and changing market structures in the future

Table 23 Conclusions of the analysis about the likely probability and impact of trends in energy and
environment in the future

Table 24 Assumptions used to produce the forest product market projections under the three alternative
scenarios

Table 25 The European wood raw material balance in 2020

Table 26 Average annual projected growth rates in production and consumption of forest products from
2000 to 2020 under the baseline scenario

Table 27 Sub-regional shares of total European production and consumption of forest products in
2000 and 2020

Table 28 Net trade by European sub-region in 2000 and 2020 (in millions)

Table 29 Comparison of baseline and conservation scenarios (production in millions)

LIST OF FIGURES

Figure 1 Geographical scope and sub-regions used in the outlook study

Figure 2 The relationships between the forest sector and society

Figure 3 Trends in the total area of forest and other wooded land in Europe since 1980

Figure 4 Trends in forest area in selected European countries from 1950 to 2000

Figure 5 Trends in growing stock in selected European countries from 1950 to 2000

Figure 6 Trends in growing stock per hectare in selected European countries from 1950 to 2000

Figure 7 Trends in annual increment in selected European countries from 1950 to 2000

Figure 8 Trends in annual increment per hectare in selected European countries from 1950 to 2000

Figure 9 Trends in the comparison of fellings to increment in selected European countries from 1961 to 2000

Figure 10 Trends in forest defoliation in Europe from 1992 to 2003

Figure 11 Trends in forest fires in Europe from 1950 to 2000

Figure 12 Trends in the proportion of FOWL managed primarily for soil protection in selected European
countries from 1980 to 2000

Figure 13 The proportion of FOWL in Europe where public access is legally allowed

Figure 14 Recent trends in forest certification in Europe

Figure 15 Trends in production and consumption of coniferous sawnwood from 1961 to 2000

Figure 16 Trends in production and consumption of non-coniferous sawnwood from 1961 to 2000

Figure 17 Trends in production and consumption of fibreboard from 1961 to 2000

Figure 18 Changes in the composition of fibreboard production from 1995 to 2002

Figure 19 Trends in production and consumption of particleboard from 1961 to 2000 /a>

Figure 20 Trends in production and consumption of plywood and veneer sheets from 1961 to 2000

Figure 21 Trends in production and consumption of newsprint from 1961 to 2000

Figure 22 Trends in production and consumption of other paper and paperboard from 1961 to 2000

Figure 23 Trends in production and consumption of printing and writing paper from 1961 to 2000

Figure 24 Trends in the consumption of sawnwood and wood based panels in Europe from 1961 to 2000

Figure 25 Trends in the importance of reconstituted panels from 1961 to 2000

Figure 26 Trends in the consumption of paper and paperboard in Europe from 1961 to 2000

Figure 27 The flow of raw materials and intermediate products in the forest processing sector

Figure 28 Trends in production and consumption of industrial roundwood from 1961 to 2000

Figure 29 Trends in the composition of industrial roundwood production in Europe from 1961 to 2000

Figure 30 Trends in the composition of industrial roundwood production in Western Europe from 1961 to 2000

Figure 31 Trends in the composition of industrial roundwood production in the CIS sub-region from 1961 to 2000

Figure 32 Trends in the composition of industrial roundwood production in Eastern Europe from 1961 to 2000

Figure 33 Trends in production and consumption of total wood pulp from 1961 to 2000

Figure 34 Trends in production and consumption of mechanical wood pulp from 1961 to 2000

Figure 35 Trends in production and consumption of chemical wood pulp from 1961 to 2000

Figure 36 Trends in production and consumption of recovered paper from 1961 to 2000

Figure 37 Trends in product recovery in the sawnwood and plywood sectors from 1961 to 2000

Figure 38 Trends in wastepaper recovery 1961 to 2000

Figure 39 Trends in wood raw material demand in Europe from 1961 to 2000

Figure 40 Trends in wood raw material demand in Western Europe from 1961 to 2000

Figure 41 Trends in wood raw material demand in the CIS sub-region from 1961 to 2000

Figure 42 Trends in wood raw material demand in Eastern Europe from 1961 to 2000

Figure 43 Trends in wood raw material consumption in Europe from 1961 to 2000

Figure 44 Trends in wood raw material consumption in Western Europe from 1961 to 2000

Figure 45 Trends in wood raw material consumption in the CIS sub-region from 1961 to 2000

Figure 46 Trends in wood raw material consumption in Eastern Europe from 1961 to 2000

Figure 47 Trends in the importance of industrial roundwood as a source of wood raw material supply from
1961 to 2000

Figure 48 Trends in the importance of recovered paper as a source of raw material supply for the pulp and paper
industry from 1961 to 2000

Figure 49 Trends in the importance of net pulp imports as a source of raw material supply for the pulp and paper
industry from 1961 to 2000

Figure 50 Estimated potential availability of wood residues from 1961 to 2000

Figure 51 Estimated utilisation of wood residues from 1961 to 2000

Figure 52 Growth in European trade in solid wood products from 1961 to 2000

Figure 53 Growth in European trade in pulp and paper products from 1961 to 2000

Figure 54 Exports as a share of solid wood product production from 1961 to 2000

Figure 55 Exports as a share of pulp and paper product production from 1961 to 2000

Figure 56 The European share of global trade in wood products from 1961 to 2000

Figure 57 Historical trends in the Normalised Trade Balance for solid wood products

Figure 58 Historical trends in the Normalised Trade Balance for pulp and paper products

Figure 59 Revealed Comparative Advantage for solid wood products since 1980

Figure 60 Revealed Comparative Advantage for pulp and paper products since 1980

Figure 61 Global trends in export prices for the main wood product categories since 1990

Figure 62 Trends in real sawnwood prices in Europe since 1970

Figure 63 Trends in real fibreboard and particleboard prices in Europe since 1970

Figure 64 Trends in real plywood and veneer sheets prices in Europe since 1970

Figure 65 Trends in real semi-chemical and chemical pulp prices in Europe since 1970

Figure 66 Trends in real newsprint and mechanical pulp prices in Europe since 1970

Figure 67 Trends in the real price of printing and writing paper and other paper and paperboard in Europe
since 1970

Figure 68 Trends in real stumpage prices in Northern Europe since 1970

Figure 69 Trends in real stumpage prices in Belgium and the United Kingdom since 1970

Figure 70 Trends in production and consumption of woodfuel from 1961 to 2000

Figure 71 Trends in production and consumption of tree nuts from 1961 to 2000

Figure 72 Trends in the production of different types of tree nuts from 1961 to 2000

Figure 73 Trends in total production and consumption of honey from 1961 to 2000

Figure 74 Trends in European exports of cork and cork products since 1960

Figure 75 Incentives for forestry in eleven European countries from 1990 to 1999

Figure 76 Trends in employment in the European forest sector from 1990 to 2000

Figure 77 Employment in the forest sector in Western Europe from 1990 to 2000

Figure 78 Employment in the forest sector in Eastern Europe from 1990 to 2000

Figure 79 Employment in the forest sector in the CIS sub-region from 1990 to 2000

Figure 80 Trends in value-added in the European forest sector from 1990 to 2000

Figure 81 Value-added in the forest sector in Western Europe from 1990 to 2000

Figure 82 Value-added in the forest sector in Eastern Europe from 1990 to 2000

Figure 83 Value-added in the forest sector in the CIS sub-region from 1990 to 2000

Figure 84 Trends in the importance of forest products exports in Europe from 1990 to 2000

Figure 85 Trends and projections for population density in Europe from 1950 to 2050

Figure 86 Trends and projections for urbanisation in Europe from 1950 to 2050

Figure 87 Trends and projections for the population of working-age in Europe from 1950 to 2050

Figure 88 Trends in vehicle ownership in Europe from 1960 to 2000

Figure 89 The relationship between human needs and the level of personal income

Figure 90 Recent trends in the use of pre-cut lumber in Japan

Figure 91 Trends and projections for the production and consumption of coniferous sawnwood under the baseline
scenario

Figure 92 Trends and projections for the production and consumption of non-coniferous sawnwood under the
baseline scenario

Figure 93 Trends and projections for the production and consumption of fibreboard under the baseline scenario

Figure 94 Trends and projections for the production and consumption of particleboard under the baseline
scenario

Figure 95 Trends and projections for the production and consumption of plywood and veneer sheets under the
baseline scenario

Figure 96 Trends and projections for the production and consumption of newsprint under the baseline scenario

Figure 97 Trends and projections for the production and consumption of other paper and paperboard under the
baseline scenario

Figure 98 Trends and projections for the production and consumption of printing and writing paper under the
baseline scenario

Figure 99 Trends and projections for the consumption of sawnwood and wood based panels in Europe under the
baseline scenario

Figure 100 Trends and projections for the importance of reconstituted panels under the baseline scenario

Figure 101 Trends and projections for the consumption of sawnwood and wood based panels in the CIS sub-region
under the baseline scenario

Figure 102 Trends and projections for the consumption of paper and paperboard in Europe under the baseline
scenario

Figure 103 Trends and projections for wastepaper recovery

Figure 104 Trends and projections for the importance of recovered paper as a source of raw material supply for the
pulp and paper industry

Figure 105 Trends and projections for the production and consumption of recovered paper under the baseline
scenario

Figure 106 Trends and projections for the production and consumption of total wood pulp under the baseline
scenario

Figure 107 Trends and projections for net trade in wood chips, particles and residues

Figure 108 Trends and projections for the utilisation of wood residues

Figure 109 Trends and projections for the potential availability of wood residues

Figure 110 Trends and projections for wood raw material demand in Europe

Figure 111 Trends and projections for wood raw material demand in Western Europe

Figure 112 Trends and projections for wood raw material demand in the CIS sub-region

Figure 113 Trends and projections for wood raw material demand in Eastern Europe

Figure 114 Trends and projections for wood raw material consumption in Europe

Figure 115 Trends and projections for wood raw material consumption in Western Europe

Figure 116 Trends and projections for wood raw material consumption in the CIS sub-region

Figure 117 Trends and projections for wood raw material consumption in Eastern Europe

Figure 118 Trends and projections for the production and consumption of industrial roundwood under the baseline
scenario

Figure 119 Trends and projections for the importance of industrial roundwood as a source of wood raw material
supply

Figure 120 Trends and projections for the consumption of woodfuel in Europe

Figure 121 Projections for the production and consumption of coniferous sawnwood in 2020 under the three
alternative scenarios

Figure 122 Projections for the production and consumption of non- coniferous sawnwood in 2020 under the three
alternative scenarios

Figure 123 Projections for the production and consumption of fibreboard in 2020 under the three alternative
scenarios

Figure 124 Projections for the production and consumption of particleboard in 2020 under the three alternative
scenarios

Figure 125 Projections for the production and consumption of plywood and veneer sheets in 2020 under the three alternative scenarios 194

Figure 126 Projections for the production and consumption of newsprint in 2020 under the three alternative
scenarios

Figure 127 Projections for the production and consumption of other paper and paperboard in 2020 under the three
alternative scenarios

Figure 128 Projections for the production and consumption of printing and writing paper in 2020 under the three
alternative scenarios

Figure 129 Projections for the production and consumption of wood pulp in 2020 under the three alternative
scenarios

Figure 130 Projections for the production and consumption of industrial roundwood in 2020 under the three
alternative scenarios

Figure 131 Outlook for the area of forest available for wood supply (FAWS) under the baseline and integration
scenarios/a>

Figure 132 Outlook for the volume of growing stock on FAWS under the baseline and integration scenarios

Figure 133 Outlook for the volume of growing stock per hectare on FAWS under the baseline and integration
scenarios

Figure 134 Outlook for NAI on FAWS under the baseline and integration scenarios

Figure 135 Outlook for NAI per ha on FAWS under the baseline and integration scenarios

Figure 136 Outlook for the ratio of fellings to increment on FAWS under the baseline and integration scenarios

LIST OF BOXES

Box 1 National correspondents and outlook study experts involved in the production of the European
Forest Sector Outlook Study

Box 2 Increased competition from non-wood substitutes: the case of the Portuguese wine cork industry

Box 3 The importance of hunting as a source of income for forest owners

Box 4 How important is forest recreation compared to roundwood production in Europe? 108

Box 5 Is a market emerging for carbon storage in forests?

Box 6 Possible consequences of climate change on European forests

Box 7 Technological change in Japan’s residential construction market

Box 8 Landfill taxes - a new driving force in the forest sector?

Box 9 Forest fires threaten long-term sustainable forest management in some areas

Box 10 Development of a private forestry co-operative network in Lithuania - benefits to forest owners
from better market organisation

PREFACE

Governments, forest owners, industries and civil society around the world rely on credible and current information to develop forest management plans, policies and strategies that respond to emerging issues and trends. Nowhere is the need for reliable data more greatly felt than in Europe where the forest sector must come to terms with new realities that are bringing about fundamental change. Major challenges include the need to determine 1) whether the production of raw materials should give way to recreation and the conservation of biological diversity in the post-industrial society of Western Europe or 2) the extent to which the forest sector can contribute in a sustainable way to overall economic development in Eastern Europe and Russia. How international trade and the rapid growth of markets in other parts of the world affect the European forest sector is another question to which answers must be found.

This edition of the European forest sector outlook studies (EFSOS) is the latest in a series which have supported policy making for half a century. While the basic objectives remain unchanged, each study focuses on different aspects of a complex dynamic. In 2005, we chose to address the supply and demand outlook of forest services and non-wood forest products. For the first time, the study provides quantitative projections for the Commonwealth of Independent States while continuing to give detailed estimates of wood demand and supply – a core component of earlier publications. In addition, an in-depth analysis of the interactions of forestry with other sectors demonstrates the clear need to take a broad and comprehensive approach when seeking lasting solutions.

The study, prepared jointly by our two organisations, is part of the series of outlook studies produced by the Food and Agriculture Organization of the United Nations. It is based on scientific analysis and includes key contributions from experts and national correspondents to whom we are grateful.

It is hoped that EFSOS will help draw further attention to emerging policy issues and stimulate debate on the region’s response to challenges identified. UNECE, FAO and partners, notably the Ministerial Conference on the Protection of Forests in Europe, look forward to using the findings of this study as a basis for wider policy discussion in the coming years.

ABBREVIATIONS USED IN THE REPORT

EXECUTIVE SUMMARY

Introduction

This is the sixth major study in the European outlook study series. The aim of the study is to provide decision makers in the forest sector with information and analysis about long-term trends in the sector and projections of future developments. In particular, the study focuses on the interactions between the forest sector and society and attempts to describe how these are changing over time.

The study covers 38 countries, including all of the major European countries and seven of the countries from the former-USSR (the three Baltic States - Estonia, Latvia and Lithuania - plus Belarus, Republic of Moldova, Russian Federation and Ukraine). For the purpose of sub-regional analysis, countries are grouped into Western Europe, Eastern Europe and CIS sub-regions (see Figure 1 on page 3). Most of the results of the historical analysis are presented for the period from 1961 to 2000, while projections are presented for the period 2000 to 2020.

The forest sector has been defined to cover forest resources and the production, trade and consumption of forest products and services. Due to the limitations of available data, much of the analysis focuses on the markets for wood products, but advances have also been made in the analysis of the following: forest resources; policies affecting the forest sector; non-wood forest products; and forest services.

The statistics and information used in the study have come from FAO and ECE databases, supplemented with additional information supplied by national correspondents. National correspondents and outlook study experts were also involved in the design, implementation and peer review of different sub-components of the analysis. Supporting studies and analyses have been produced on the following topics: historical trends in forest resources; historical trends in forest product markets; the outlook for forest sector employment; the outlook for the Russian forest sector; policies affecting the forest sector; projections of economic growth in Europe; projections of forest product supply, demand and trade; and the outlook for forest resources. These studies have been produced separately as FAO-ECE discussion papers.

Following the introduction, the study is divided into four main sections. Section 2 presents the analysis of historical trends in the European forest sector. This section presents an extensive and comprehensive analysis of many different aspects of the sector, starting with forest resources and management, followed by market trends for forest products and finishing with a brief analysis of the trends in some of the linkages between the forest sector and society. Section 3 examines the “driving forces” or exogenous factors affecting the sector and presents qualitative and quantitative statements about likely future changes in many of these variables. Section 4 presents the outlook for the European forest sector and Section 5 presents a summary of the major results and conclusions of the study, including the main implications of the results for all stakeholders.

Trends and current status

Up until recently, the long-term trends in most aspects of the European forest sector have been generally stable. However, in the last decade, there have been some significant changes. Most of these have been due to the political and economic reforms in Eastern Europe and the CIS sub-region. However, other rapid changes have also occurred recently due to the effects of increased globalisation, technological change and changes in policies within and outside the sector.

Forest resources

Long-term trends in forest resources have been generally stable and show that the forest area, growing stock and increment have consistently increased in Europe over recent decades. Furthermore, this expansion of the forest resource can be observed at the European and sub-regional level (and also in most countries).

For example, the total area of forest and other wooded land has increased by three percent since 1980 (or about 36 million ha) and the area of forest available for wood supply has similarly expanded in most countries. For the European countries where long-term historical trends are available, growing stock has increased by 17 percent and annual increment has risen by 33 percent in total since 1950 (see Section 2.1 on page 13).

Another notable point is that Europe’s forests are growing faster than the annual level of fellings and that this gap between fellings and increment has increased since 1960 (see Figure 9 on page 21). Currently the fellings to increment ratio is around 75 percent in Eastern Europe and 70 percent in Western Europe, but only 25 percent in the Russian Federation (with an average of about 45 percent for Europe as a whole).

It is difficult to measure qualitative aspects of Europe’s forests, but the little information that exists suggests that the quality of forest resources and forest management in Europe has probably been quite stable and may have increased in some respects. However, significant problems still exist in many countries (e.g. defoliation, forest fires and outbreaks of pests and diseases). Most recently there has been increased concern about illegal activities in the sector, but it is not currently possible to reliably assess the extent of this problem or its impact on forest resources.

It is also worth noting that the management of forests in Europe has followed a gradual and long-term trend towards management for objectives other than wood production (see Section 2.2 on page 21). This may have led to improvements in the “quality” of forest management, but it has also led to higher expectations of performance from the sector.

Forest products and services

In forest products markets, the most notable trend in recent years has been the collapse of production and consumption in Eastern Europe and the CIS sub-region in the early 1990s, followed by the gradual recovery in most of these countries. The figures vary by country and product but, on the whole, production and consumption fell by between one-third and two-thirds in most of these countries up until the mid-1990s (see Section 2.3 on page 27). Since then, recovery has been mixed, with the most rapid and dramatic recoveries in markets taking place in the Baltic States, followed by most of the rest of Eastern Europe and then the CIS sub-region. Although recovery in the Russian Federation has, perhaps, been the slowest to start, there is now considerable growth in the forest sector in the Russian Federation and, due to its size, developments in this one country are likely to have the most profound impact on the sector in the future at the European and global levels.

Another important trend in Europe has been the structural change in the markets for solid wood products observed over the last four decades. Reconstituted panels have gradually increased in importance, as their rates of growth in production and consumption have been higher than the rates of growth in sawnwood and plywood markets. Furthermore, this shift appears to have increased over the last decade, perhaps due to the introduction of new types of panel product such as medium density fibreboard and other engineered wood products (see Figure 25 on page 41).

Historical trends in the markets for paper and paperboard show that these markets have generally grown more rapidly than the markets for solid wood products. The one exception to this is newsprint, where growth has been quite modest. In contrast, rates of growth in the markets for printing and writing paper and other paper and paperboard have been dramatic and have generally exceeded the rates of growth in all other forest product sectors (see Figure 26 on page 42).

The structural changes in solid wood products markets plus the rapid growth in paper and paperboard markets have led to a significant change in the structure of demand for wood raw materials and the availability of different types of wood and fibre. In particular, the relative importance of sawlog demand has declined over the last 40 years. In addition, at the same time that demand has increased most rapidly for small-sized roundwood, the availability of alternative sources of wood and fibre has also increased (e.g. wood residues and recovered paper, which can substitute for small-sized industrial roundwood in many applications). This increase in availability has largely been driven by the changes in demand noted above and improvements in technology, but environmental policies have also played an important role in this respect, particularly in the 1990s (see Sections 2.4 and 2.5 on pages 42-72).

The net effect of these changes has been a gradual decline in the importance of industrial roundwood for the manufacturing of forest products in Europe. For example, in Western Europe, the direct use of industrial roundwood now only accounts for about one-half of all wood and fibre used to produce forest products. Industrial roundwood accounts for about 90 percent of all wood and fibre used in the other two sub-regions, but the average for Europe as a whole has declined consistently over the last four decades and is currently around 60 percent (see Figure 47 on page 67). Future developments in environmental policies and forest processing in the other two sub-regions may result in them following a similar path to the trends experienced in Western Europe.

Reliable information about the production and consumption of non-wood forest products and forest services is extremely difficult to obtain. However, there is a general perception that the importance of these forest outputs is increasing in Europe relative to the importance of wood production. What little information is available would seem to confirm this perception.

For example, depending on which products are included, non-wood forest products could account for between around 10 percent to 25 percent of the total value of forestry production in Europe (i.e. the value of production of roundwood and non-wood forest products). The value of forest services is even more difficult to assess, but it seems likely that they are at least as important as non-wood forest products and could be more important than wood production (depending on the country). The relative importance of wood, non-wood forest products and forest services will vary significantly from country to country, but it seems likely that forest services are probably more important in Western Europe that in the other two sub-regions. Similarly, non-wood forest products are probably more important in Eastern Europe than elsewhere in Europe (see Sections 2.9 and 2.10 on pages 93-112).

International trade is another area where there have been some dramatic changes in trends in recent years (see Section 2.6 on page 72). Across all categories of forest products, the proportion of production that is exported has increased over the last four decades. This trend appears at the global, European and sub-regional level. Furthermore, this proportion has increased much more rapidly during the 1990s than in the previous three decades. This is due to the increased globalisation of forest products markets in the 1990s. Within Europe, it is also due to the rapid development of forest products exports and low growth in domestic demand in Eastern Europe and the CIS sub-region in recent years.

At the global level, Europe remains an important exporter of forest products, accounting for about half of global forest products exports (by total value). In contrast, the importance of Europe as an importer of forest products has declined, due to more rapid growth in imports into other regions (particularly Asia). This has led to the situation where Europe is now a small net exporter of forest products (by total value).

The value of European imports and exports of sawnwood and wood based panels are now roughly in balance, but Europe is a significant importer of wood pulp and an even more significant exporter of paper and paperboard. The trade balances for each product vary by sub-region (see Figure 57 and Figure 58 on page 78) but, in general, exports have increased by more than imports for most products over the last four decades.

One final trend worth noting is the decline in forest product prices that has been recorded in recent years. In real terms, since 1970, the international trade prices of processed forest products have either remained stable or fallen (depending on the product). In some cases (e.g. coniferous sawnwood, particleboard, plywood and veneer sheets and paper and paperboard) the long-term decline in prices has been dramatic (e.g. a fall of almost 50 percent in the real prices of sawnwood and plywood since 1970). However, real price levels in Eastern Europe and the CIS sub-region have increased in the last decade, as their international trade has expanded and their prices have started to converge with those in Western Europe. Only partial information is available about stumpage prices, but this information suggests that stumpage prices have followed the trends noted above and may have declined by as much as 50 percent in real terms since 1970.

Other developments

Two other major developments have been observed in the historical analysis of the European forest sector, particularly in the last decade. The first of these is the changing policy environment.

To various extents, government policies in Europe have changed to reflect the increased public interest in sustainable development. Thus, there has been an increase in support for recycling in many European countries. More recently, renewable energy has also been promoted as a major component of environmental policies. Within the forest sector, forestry policies have encouraged the production of non-market benefits and, particularly in Western Europe, forestry development has been promoted as an alternative to agriculture.

Another notable development has been institutional and administrative changes in the way that governments act within the sector. Some countries have partially privatised state forest assets and, in Eastern Europe, the restitution of forests to their previous owners has created a vast number of small private forest owners. Furthermore, where significant areas of forest remain in public ownership, many governments have encouraged their public forest managers to act more like private forest owners by setting clear commercial targets and more clearly separating the different roles of the forestry administration (i.e. policy formulation, policy implementation and the management of public forests).

At the same time that these changes have taken place, there has also been a gradual decline in the economic viability of forest management. This second major development has been due to factors such as: an increase in the potential wood supply; increased supply of alternative sources of wood and fibre; increased global competition from low-cost suppliers (along with increased competition within Europe from low-cost countries in the east); and declining product prices. These factors have combined to create a situation where forest managers are increasingly expected to meet higher management standards and produce a broader range of products and services at the same time that their main source of income (revenue from wood production) is lower than ever before. This is clearly one of the most important challenges for the European forest sector at the moment that all stakeholders must address.

Driving forces

At the broadest level, the driving forces that will shape the European forest sector in the future can be divided into two groups. First, there are the exogenous factors that will drive the sector in one direction or another (i.e. socio-economic and environmental trends). Linked to these are the future changes in demands placed upon the sector that can be expected in response to these trends (see Sections 3.1 and 3.2 on pages 127-140). Secondly, there are changes in policies and market frameworks that may be implemented by those working in the sector in an attempt to steer the sector in a particular direction. These have been investigated by creating a number of alternative scenarios for future developments and examining what impact they might have on the sector (see Sections 3.3 and 3.4 on pages 141-151).

Exogenous factors

The two main exogenous factors that are likely to have most impact on the forest sector in the future are changes in forest products prices and future rates of economic growth. For the baseline outlook scenario, it has been assumed that forest product prices will remain constant in real terms over the next 20 years. This assumption has been adjusted slightly in the alternative scenarios (see below) to reflect, in a very simple way, what might happen to forest products markets under the alternative scenarios.

For economic growth, the analysis of historical trends has suggested that Gross Domestic Product will grow more slowly in the future in Western Europe (compared to the past and compared to the other European sub-regions). For Eastern Europe and the CIS sub-region, it is expected that economic growth will not change markedly from current levels, but will gradually slow down as levels of Gross Domestic Product per capita start to converge with those in Western Europe. This is based on an assumption that educational levels and the employment of technology will gradually converge across most of Europe.

This analysis of economic trends was used to produce the projections of economic growth used in the baseline outlook scenario (see Table 1). As above, the lower and higher economic growth projections were also used in the investigation of alternative scenarios.

Table 1 Projections of average annual economic growth in Europe from 2000 to 2020 under three different growth scenarios

Source: NOBE (2002).

Another important driving force is the gradual ageing of the European population. Over the next 20 years, this will be felt mostly in Western Europe. However, this change will also start to appear in the other two sub-regions after 2010. The impact of this trend will be felt in two ways. Firstly, labour is likely to become more scarce and expensive. This will encourage the greater substitution of capital for labour in end-use markets (e.g. construction), which is likely to lead to greater demand for engineered wood products as opposed to simpler sawnwood and panel products. The second impact of this will be changes in the broader demands placed upon the sector. As populations age and become wealthier, it is likely that the demands for non-wood goods and services will increase relative to the demands for forest products. Thus, the historical trend towards greater public interest in forest services is likely to continue and strengthen in the future.

The main environmental driving force will be the continued abundance of potential wood supply in Europe in the foreseeable future. Even with a significant increase in wood production, the potential availability of wood in Europe’s forests is likely to continue to increase over the next 20 years, due to the area, increment and age-structure of existing forest resources. Combined with similar trends in several regions outside Europe, this makes it very unlikely that roundwood prices will increase in the near future. However, it does also present an opportunity to expand the area of forests in Europe that are managed for objectives other than wood supply. The extent to which forest management is redirected towards non-wood management objectives will depend upon the economic viability (for forest owners) of different forest management options. This is closely linked to the issue of public subsidies for the sector and the ability of forest owners to commercialise non-wood forest outputs in the future.

Alternative future scenarios for the sector

The analysis of policies affecting the sector included an assessment of historical trends in policies and an inquiry of expert opinion on future trends in policies and their likely impact on important variables such as: forest area; production; trade; and consumption. This resulted in the elaboration of a number of possible future scenarios, of which the following three scenarios were explored in the analysis.

Baseline scenario: the baseline scenario assumes that the long-term historical relationships in forest products markets will remain the same in the future. In terms of forest resources, it assumes that future developments in the bio-physical characteristics of Europe’s forests will be largely determined by the existing status of forest resources. Constant prices and the baseline economic growth projections were used to produce the forest product market forecasts under this scenario.

Conservation scenario: the conservation scenario assumes that there will be an accelerated shift towards environmental enhancement and conservation of forest resources in the future. This will be driven by an increase in public awareness of and demand for environmental benefits and will be supported by policies that will move society in this direction. Under this scenario, it has been assumed that forest products prices may increase slightly and that economic growth will be slightly slower in the future.

Integration scenario: this scenario assumes that there will be more rapid economic integration and market liberalisation across all of Europe. This will result in higher economic growth, so the higher economic growth projections have been used to produce the forest product market projections under this scenario. These will tend to exert downward pressure on forest prices, so an assumption of a small decline in forest product prices has also been used to produce the market projections.

Outlook

Processed wood products

Consumption and production of wood products is expected to show stable growth in Western Europe over the next 20 years, with growth rates similar to those in recent years. However, market growth may gradually decline towards the later part of the period. In Eastern Europe and the CIS sub-region, markets will expand considerably and grow much faster than in the west (see Section 4.1 on page 153.

Annual growth in production in Eastern Europe will be about twice the level of growth in Western Europe across all product categories and growth in the CIS sub-region will be as much as three times higher (see Table 2). Nevertheless, Western Europe will remain the largest producer of all forest products in Europe.

Table 2 Average annual projected growth rates in production and consumption of forest products from 2000 to 2020 under the baseline scenario

The rapid market growth expected in the east is due to the higher rates of economic growth expected in these sub-regions and their higher elasticities of supply and demand (i.e. supply and demand in Eastern Europe and the CIS sub-regions will increase by more than in Western Europe for a given increase in GDP). These higher elasticities of supply and demand reflect the generally lower levels of personal income in these countries and their need for forest products for reconstruction, investment and general development.

Likewise, trade patterns will change, with a significant absolute and relative increase in exports from the east. This will occur as the Russian Federation and other countries succeed in redeveloping their forest sectors to supply the world’s expanding markets in Asia as well as the traditional European markets. Because of the sheer size of the forest resource in the Russian Federation and its potential to increase exports significantly, developments in that country will strongly influence the global supply and demand balance for forest products. For example, the CIS sub-region’s share of total European production of all forest products (measured in WRME) will increase from 10 percent at present to 20 percent by 2020.

Trade patterns will also change as net exports increase strongly, in particular from the CIS sub-region. Net exports from Eastern Europe will increase less rapidly and even decline in some cases, because the domestic market will grow as fast as or faster than domestic production. The main developments in European net exports in the future will come from the Russian Federation (see Table 3).

Table 3 Net trade by European sub-region in 2000 and 2020 (in millions)

Note: positive values are net exports and negative values are net imports.

Roundwood and fibre

The forecast expansion of production, consumption and trade will require a higher level of fellings in all European countries (see Section 4.3 on page 176). For Europe as a whole, production and consumption of industrial roundwood are forecast to increase by slightly more than 40 percent from 2000 to 2020 (see Figure 118 on page 183). The ratio of fellings to net annual increment, which is a crude indicator of the sustainability of wood supply, is expected to rise in all countries, but it is not expected to exceed 100 percent. Furthermore, European production and consumption are expected to remain roughly in balance, with exports from east to west in 2020 at levels that are similar to at present.

The greatest increase in production is expected in the CIS sub-region, where production in 2020 could be double the level recorded in 2000. In Western Europe, production and consumption will expand at the same rate as in the past (or maybe slightly higher, due to maturing forest plantations in some countries). In Eastern Europe, production and consumption growth will slow down compared to recent years (i.e. since 1990) as some countries start to reach the limits of available wood supply. However, the forecast rate of growth will be similar to the long-term historical trend for this sub-region.

Production and consumption of recovered paper in Europe are expected to double over the next 20 years and annual net exports of recovered paper are expected to increase from about 3 million MT to 8 million MT (see Section 4.2 on page 168). Furthermore, the importance of wood and fibre from sources other than industrial roundwood is expected to continue to increase as it has in the past (see Table 4).

Table 4 The European wood raw material balance in 2020

Note: the above figures are expressed in million m³ WRME. For trade in chips, particles and residues, imports are shown as a positive number and exports are shown as negative numbers.

Non-wood forest products

Quantitative forecasts for non-wood forest products and forest services could not be produced, due to problems of measuring many of these outputs and a general lack of information about some of these outputs. However, a qualitative assessment of the outlook for some of these outputs was produced (see Section 4.5 on page 186) and the main features of this analysis are presented below.

Production of non-wood forest products: in Western Europe, commercial collection of non-wood forest products is likely to continue to decline, due to the labour intensive nature of these activities and the relatively high labour costs in Western Europe. However, in many cases, collection is more of a recreation activity, so total collection may increase in the future. In Eastern Europe and the CIS sub-regions, relatively low labour costs will continue to give these sub-regions a comparative advantage in commercial non-wood forest product production, so production will probably continue to increase in the future.

Demand for edible non-wood forest products: in Western Europe, it is possible that demand for many edible non-wood forest products will increase in the future (in particular, for some of the higher value products such as mushrooms and honey).

Demand for medicinal plants: an increase in demand for medicinal plants might be expected in Western Europe in the future. However, if such an increase were to arise, it would probably be only a gradual increase.

Markets for cork: stable and moderate growth appears to have returned to the market for cork bottle stoppers and it seems unlikely that producers of high quality wines will switch to alternative materials, so long as the product remains price competitive and reliable. Thus, it is expected that this market will continue to grow in line with recent historical trends.

Decorative foliage and Christmas trees: both of these products are luxury items, so it is likely that demand will increase in the future, particularly in Western Europe. Furthermore, it may be possible to raise prices in Western Europe, with innovative marketing and advertising.

Tree nuts: the historical statistics for tree nut production and consumption show quite strong trends, indicating level consumption with declining production in Western Europe and increasing consumption and production in the other two sub-regions. It would be reasonable to assume that these trends will continue.

Forest services and employment

Protection of soil, water and infrastructure: historical statistics have shown that demand for this forest function is quite small overall, but very high in specific locations. It seems likely that the importance of this function will remain unchanged in the future.

Demand for recreation: demand for forest recreation is already probably very high in Western Europe, so high growth in visitor numbers seems unlikely given the expected changes in population. In the future, it seems more likely that demand will increase for a higher quality of forest recreation experience. In contrast, high growth in demand for forest recreation (i.e. visitor numbers) can be expected in the other two sub-regions.

Demand for biodiversity conservation: demand for biodiversity conservation will probably increase in all countries, due to the projected changes in socio-economic driving forces. Again, the largest increases in demand might occur in the future in Eastern Europe and the CIS sub-region, where economic growth will be most rapid.

Supply of recreation and biodiversity: the supply of these forest services in the future will very much depend upon government policies. Some forest owners will probably develop commercial forest recreation businesses, but supplying forest recreation services (as well as biodiversity conservation) will remain a loss-making activity (in a financial sense) for the majority of forest owners and managers. Therefore, the future supply of these services will depend upon the level of public support for these activities.

Mitigation of climate change: Europe’s forests are almost certainly going to continue to increase in volume over the next 20 years, so increased “supply” of carbon storage in the future is virtually guaranteed. On the demand-side, much will depend on future policies and the incentive mechanisms that are developed to encourage reductions in net carbon emissions. Mechanisms for controlling net carbon emissions that could affect the forest sector are as follows:

• measures to maintain or increase carbon stocks in forest ecosystems;
• incentives for the use of wood energy as part of renewable energy policies; and
• measures to encourage the use of forest products instead of less “carbon-friendly” materials.

The scope for encouraging the establishment of new fast-growing plantations (some for the supply of wood energy and some for carbon sequestration) will vary across Europe. In Western Europe and parts of Eastern Europe, the scope is likely to be limited by competing land uses. But in the rest of Europe there is considerable development potential.

Employment: over the last few decades, labour productivity has been rising faster than the volume of production, so total employment in the forest sector has been steadily falling. It is expected that this trend will continue, Regarding employment quality, wage levels in the pulp and paper sector compare favourably with those in the other two forestry sub-sectors and with average manufacturing wages, but wages in forestry and the wood industries are typically lower than average. Ageing populations may reverse this trend. The health and safety situation has improved in the forest processing industry but continues to be a major problem in forestry in many countries. In some regions and for some groups, the situation has actually deteriorated significantly over the past decade (most notably for the self-employed and private forest owners in Eastern Europe). This situation may persist unless remedial action is taken.

Summary of main policy relevant forecasts

Recycling and residue use will continue to expand

In all future scenarios, it is projected that wood and wood products will continue to be used in an efficient way, resulting in minimum waste and high use of recycled and recovered sources of wood and fibre. By 2020, it is expected that the direct use of industrial roundwood will account for only 44 percent of wood raw material consumption in Western Europe (compared with just under 50 percent in 2000). In contrast, recovered paper will account for 32 percent of wood and fibre inputs (compared with 27 percent in 2000).

Renewable energy policies will increase the demand for wood

Over the next 20 years, it is considered very likely that more policies will be put in place to promote the production and use of renewable energy. It is expected that one of the likely consequences of renewable energy promotion could be the creation of a major new market for small-sized roundwood. This could encourage more active forest management, as well as raise pulpwood prices.

Europe’s forest resource will continue to expand

The total forest area in Europe is expected to increase by around five percent between 2000 and 2020. This will occur due to a mixture of afforestation and natural processes and will occur both on former agricultural land as well as along the tree margin in mountain and boreal areas. However, the area available for wood supply might decrease, due to increasing demands to set-aside forests for other functions, such as: biodiversity conservation; recreation; and protective functions.

Average increment will continue to increase over the next two decades, but this increase will slow down markedly by 2020. There are also studies that indicate that the productivity of European forest sites is increasing. Although the evidence is not very strong at the moment, this could lead to further increases in increment in the future.

Fellings will remain below annual increment in Europe

At the moment, about 45 percent of the annual increment on forest and other wooded land is harvested in Europe. This proportion will increase in the future, due to the forecasts of increased in fellings. However, the expected increases in European roundwood production can be covered by the potential roundwood supply, without threatening the sustainability of forest resources.

The gap between fellings and increment, plus the increases in increment expected in the future, will result in a significant increase in the growing stock volume over the next two decades. This presents a range of opportunities to increase fellings and/or set-aside forest areas for purposes other than roundwood production.

Forest products trade will intensify further

International trade, both within Europe and between Europe and the rest of the world, is expected to increase in the future. Intensified trade is expected between Western Europe and the other two sub-regions. Furthermore, the European forest sector is also expected to face increasing competition from producers outside the region (especially from countries with extensive areas of fast-growing forest plantations). On the other hand, foreign export markets will also increase dramatically in some countries.

Economic viability of forest management will remain threatened

Recent downward trends in roundwood prices and the generally low harvesting intensities in much of Europe all indicate that the income from forest operations is declining at the same time that costs may be rising. There are few possibilities to increase profitability (e.g. by reducing costs or increasing prices). Furthermore, the potential to develop markets for previously non-marketed goods and services is probably quite limited. Therefore, without appropriate policy intervention to address this situation, it appears that the economic viability of European forest management will remain threatened.

Forest sector institutions will continue to evolve rapidly

In recent years, many forest sector institutions and legal frameworks have adapted to changing circumstances (e.g. separation of “authority” and “management” functions for public forests, increased emphasis on extension services, national forest programmes, etc.). Future developments will continue to place greater demands and a wider range of demands on forest sector institutions and policies. This will force them to adapt to ever-changing circumstances and open decision making processes to many specialists who are not conventionally trained foresters. To some extent, it will also require a redirection of skills and capacities in the sector to deal with these new challenges.

Policy recommendations

This section presents, on the responsibility of the secretariat, some recommendations for policy and indications of the main stakeholders that should consider these recommendations. It is suggested that these should be discussed at the European level as a follow-up action to this study.

General policy development

Necessity of a cross-sectoral approach (governments, all stakeholders): forest sector stakeholders should intensify the policy dialogue, proactively drawing the attention of other policy areas (such as agriculture, trade, environment and energy) to the social and environmental benefits of sustainable forest management, as one component of the overall sustainable development of society.

Forestry, wood and climate change (governments, research institutions): forest sector institutions should be proactive in analysing the consequences of climate change policy decisions for the sector and urgently take measures to reconcile the provisions of climate and energy policies, strategies and commitments with national forest programmes and other forest sector planning documents.

Monitoring environmental and social benefits from forests and forestry (governments, international organisations, research institutions): there are still rather few reliable quantitative and policy relevant data on the environmental and social benefits of forests available to policy makers. The situation in this respect has improved notably over recent years, notably through the pan-European indicators of sustainable forest management, but is still not satisfactory. It will require political will and resources to provide satisfactory instruments for well informed policy discussions and for careful coordination of efforts and good communication between all actors.

Forest law enforcement and governance (governments, all stakeholders): governments should work together, first to ensure that domestic forest law enforcement and governance are at an acceptable level, and then to help other countries, inside and outside the region, to improve the situation in this respect. It should be stressed that sustainable forest management in all countries is threatened by bad governance in a few.

Market policies

Need for policies to stimulate the sound use of wood (governments, forest industries, forest owners): governments and EU institutions should develop a policy and legislative framework to support and promote the sound use of wood as an integral part of overall sustainable development and considering the long-term sustainable development of forest resources. All major forest sector stakeholders should identify and implement new financial mechanisms to support these actions.

Balanced implementation of wood energy policies (governments): governments should promote wood energy production and use. They should fund research and development into wood energies and create the necessary infrastructure for a modern and competitive wood energy sector

Developing the region’s comparative advantages (forest industries, governments): in the increasingly competitive global markets, the European industry and its raw material suppliers (the forest owners of Europe) have been put on the defensive in many areas. Stakeholders, led by Governments, should identify, region by region, what are Europe’s areas of comparative advantage and disadvantage in the forest/timber field and how they should be developed.

Sustainable forest management

Improve the economic viability of forest management in Europe (governments, forest industries, research community): the EFSOS analysis confirms the perception that there is a significant structural threat to the economic viability of forest management. This is now widely recognised and at the Vienna Ministerial conference the ministers committed to implement a series of measures, Governments should attach sufficient political priority to implementing the commitments made in Vienna.

Employment and the work force (governments, employers, unions): in spite of the decline in employment volumes, the sector is likely to be faced with difficulties in finding adequate employees with relevant qualifications in the future. This issue would appear to merit closer scrutiny at the national and local level. Improvements in employment quality such as wages, training and career prospects, as well as working environment and safety, will be critical to maintain adequate levels of new workers, in particular women.

Need to control forest fires and to intensify international cooperation in this area (governments, forest owners): the highest political authorities of southern Europe and the Russian Federation should attach sufficient priority to preventing and controlling forest fires National strategies for forest fire control should also address international co-operation.

International co-operation

Urgent need to address threats to sustainability in south-eastern Europe and the CIS sub-region (governments, donors): the situation in some countries in Eastern Europe and the CIS sub-region is not well understood by the international community. However, it is clear that poverty, civil disturbance or war, with weak institutions, have put some of these countries in an unsustainable situation with excessive forest fires, increasing wood demand, notably for fuel wood, overgrazing, illegal logging leading to forest depletion, shortages of forest products, erosion and deforestation, even desertification. A special problem concerns the management of forests contaminated by radioactivity, notably, but not exclusively, as a result of the Chernobyl catastrophe. Governments of these countries should give more priority to forest policy issues and the international community should work together to support them.

Need to devote policy attention to the consequences of the dynamic developments in Eastern Europe and the CIS sub-region (governments): the likely future developments in Eastern Europe and the CIS sub-region will have a significant impact on forest products trade and production (also in Western Europe and Asian markets). Further policy analysis is needed of the consequences of these trends, and the dialogue between East and West should be intensified in order to assist with the sustainable development of the forest sector and to avoid any undesirable outcomes.

Institutional change in countries in transition (governments, international institutions): there have been profound and rapid changes in the forest sector institutions of many of the advanced reform countries in Eastern Europe, which have left them much better equipped than in the past to face the challenges of the future. Yet many countries are only just starting on the complex processes, and could benefit from the experience accumulated up to now. Mechanisms should be strengthened to share this experience.

The European forest sector in the global context (all stakeholders): In a period of general globalisation, one of the principal questions is: How can forest policy making - still focused at the national level - respond to the changing global environment? European forest sector stakeholders should strengthen their efforts on an international level. The European experiences in sustainable forest management need to be promoted more actively on a global level.

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