“2024 will be a challenging year for the entire forestry sector and timber industry,” Dr. Bertil Burian, Professor of International Forest and Wood Management at Rottenburg University, emphasized in his keynote speech. “Energy costs will continue to rise this year, and it will be a difficult year for the construction industry in general – not just in Germany,” he added.
Revenue and sales crisis
The Covid pandemic and the war in Ukraine have led to rising energy costs and interest rates. High inflation and disruptions to supply chains were added to that. Furthermore, the housing construction market is facing a crisis both in Central Europe and in China, a very important export market for the forestry and timber industries. “The residential construction segments of one- and two-family homes have been seriously affected by the sharp increase in construction costs. As a result, there has been a halving in this segment. The packaging industry, too, was affected by decreasing orders,” Burian informed the other participants. From the second half of 2023 onwards, timber trading companies and retailers have reduced their previously high stock levels and placed fewer orders for goods.
Starting in the second quarter of 2023, Germany’s exports of hardwood lumber to China fell noticeably. By the end of November, a total year-on-year decrease of 40% was recorded. “At the same time, competitors on the export market are able to offer lower prices compared to German suppliers, as we have seen prices for hardwood logs and energy wood increase in Germany,” Burian explained. “We remain an export nation even though there is a revenue and sales crisis in Europe. The log and lumber markets are decoupled. Increases in purchase prices of logs or higher energy costs cannot be passed on to our customers,” Dr. Stephan Lang, President of the Association of the German Sawmill and Timber Industry (DeSH), added.
Construction industry needs security in planning
“The construction industry is in a deep crisis,” Erwin Taglieber, President of the German Timber Industry Council DHWR emphasized. For the timber construction expert, the “catastrophic subsidy policy in the residential construction sector” is to blame for this. “Nowhere else, the number of building permits is as low as in Germany,” Lang agreed. Taglieber called for better subsidy policies and a reduction of bureaucracy in the timber construction sector. The participants of the round-table meeting quickly agreed that a long-term perspective and security in planning are crucial. The sawmill and wood processing industry in the DACH region have adapted well to the accumulation of damaged wood, where a distinction is made between fresh wood and wood which has been stored for several years. In timber construction, especially in the area of timber frame construction, damaged sawlogs are accepted.
“We are an important part of the value chain,” Gabriele Köstner, Managing Director of the Berlin-based company Müller-Zeiner Industrieverpackungen, explained. “Wood that isn’t used in construction is used in the packaging industry, and the wood that we don’t need is used by the wood-based materials industry.”
Timber stock is being lost
According to Dr. Ralf Petercord from the Ministry of Agriculture of North Rhine-Westphalia, calamities will accompany us in the coming years as well © Philipp Matzku
“Our trees are fighting for survival. The number and dimension of calamities will increase worldwide, and that includes Germany. In Bavaria and Thuringia, for example, bigger volumes of beetle-damaged wood are to be expected in the next few years as well,” Dr. Ralf Petercord from the Ministry of Agriculture of North Rhine-Westphalia, analyzed. The timber stock in German forests decreased by 7% due to the damaged wood situation in recent years. 2.3 million m³ of spruce and 600,000 m³ of beech wood are already lost. “In the Harz, everything that can be infested is, in fact, infested,” as Petercord put it. Pine and beech trees are struggling with the dry conditions, and oak will soon be doing just as badly as ash, according to Petercord.
“Since 2018, we have lost half of our timber stocks,” Benjamin Krug, head of wood sales at HessenForst, explained. In 2018, spruce logging amounted to around 500,000 m³. By 2021, it had risen to 3.1 million m³, before falling to 800,000 m³ last year. Beetle-damaged wood accounted for two thirds of this logging volume but nevertheless, fresh wood was harvested as well. HessenForst has 400,000 ha of clearings due to various calamities, which corresponds to 10% of the existing forests.
Industrial wood market – cascading use as challenge
In the industrial wood sector, last year’s sales were driven by price developments in the energy wood market. “The use of wood for energy generation is sensible, but not at any cost. The material use of industrial wood should have priority,” Wolfgang Beck, Senior Vice President Global Wood Sourcing at Mercer International, emphasized. Beck also criticized subsidies for setting aside land during the climate crisis. “The outflow from forests that have been set aside will come back onto the market as calamity wood anyway.”
Josef Ziegler, President of the Bavarian Forest Owners Association, is critical of the withdrawal of the pulp and paper and wood-based materials industries from the DACH region, as this means losing important buyers of industrial wood for material use. “Who will still be there in fifty years?” Beck made it clear that Mercer would certainly not turn its back on Germany, adding that Mercer will increase its focus on biochemistry – similar to UPM with its biorefinery in Leuna.