The recent weeks have brough a slow-down in forest management activities across Europe. In most Member States (MSs), such activities have not been subject to direct restrictions, however are impacted by various national measures – for the forest sector the limited movement that applies for people, goods and machinery needed for the work in forest has struck the hardest.
Forest management activities are considered as basic during the lockdown in some MSs and are authorised with some security and sanitary measures in place, such as the application of appropriate distance, minimum number of people in the car, individual visits of forest sites and usage of protective masks. In others only essential work in forests is carried out, ranging from work to prevent and control fires and bark beetles and supply to essential industries. The sector sees difficulties in obtaining administrative permits and certifications that will affect the work in the next months.
Potential workforce shortage in this period could impact the forest cycle activities (management, planting, harvesting) and reflect along the value chain. Current evidence do not necessarily predict a workforce deficit; however the arrival of foreign workforce could be disturbed by applied travel restrictions. Some activities where potential workforce shortage could present a challenge are for example tree planting, which is around the corner in the Nordic countries, cork extraction in Southern Europe taking place from June to August and treatment of forest calamities. Some countries are exploring how to replace the potential lack of foreign workforce with a domestic one.
Covid-19’s impact on forest-based industries will have immediate consequences for the forest owners, arising primarily from the continued decline in wood runoff and sales, mainly due to currently interrupted wood supply chain. Prices and volumes are linked to the general situation, which in the industry sector, shows different intensity, depending on the sector. Generally speaking, if the packaging, wood pallets (retail) and pulp for tissue and toilet paper see stability or some increase, others such as graphic paper, wood energy, construction, furniture and panel see a decrease in activities. As a result, sawmills have been largely impacted and some forest-based enterprises adapted their production chain to produce fibre protective material for sanitary use.
Relevant to note is that the challenges in the forest sector linked to the coronavirus should be seen also in light of forest calamities 2018/19 in some MSs. Their accumulation brings breakdown of timber markets and prices, which might lead to a potential wood sales stagnation. With dry summer ahead and thinking about the winter, this could present a serious forestry sanitation problem as well as difficulties in terms of wood storage where solutions need to be found (e.g. wet storage). Export-oriented forestry sees decline in demand across the EU, while on the other hand, there are some signs of exports to China and Asia being activated again following their improved situation.
When it comes to supporting measures, in most MSs there is no forest sector specific support, however enterprises can benefit from different national measures ranging from public-backed loans, temporary unemployment, delayed tax payments to different compensations and subsidies. The EU should work towards safeguarding the single market and allow enterprises to compete on equal terms in the EU.
Reflecting on the future needs and opportunities, the EU must see the European forests as a solution and the European wood as the material to support the revival of the European economy. In this view the EU should include forests as part of the green recovery allowing them to play a central role in the realization of the EU Green Deal. The EU should not lose sight of climate change solutions and supporting measures for forest owners, as the management and regeneration will need to continue. Possibility to provide financial support including through CAP and rural development funding to forest owners to contribute to forest management activities will be key.
The summary report gathers information from CEPF member organisations (last reporting 23 April). Information reflects the situation in the entire forest sector. The developments and related impact on the sector will continue to be monitored in the following weeks.