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Wood Products Prices in Europe

16 每 29th February 2016

Report from Europe  

 EUTR - progress yes, but still a long way to go
The European Commission released the results of the first
review of the EU Timber Regulation (EUTR) on 19

The review covers the period from March 2013 to March
2015 and is based on Member States* reports on the
application of the EUTR, an open public consultation,
targeted stakeholder surveys and an evaluation report
produced by an external consultant. It analyses the EUTR
for relevance, effectiveness, efficiency, coherence and EUadded

The overall conclusion of the analysis was that the EUTR
※has the potential to achieve its objectives§. However,
various shortcomings were identified as well, especially
the slow pace of implementation in many member states
and the unequal levels of enforcement and penalties.

EUTR contributes to raising awareness of illegal

One of the primary achievements of the EUTR, according
to the review, was its raising awareness of the problem of
illegal logging and also creating an incentive for producer
countries to develop systems to demonstrate compliance
with EUTR requirements.

Six producer countries have started implementing a
bilateral agreement (Voluntary Partnership Agreement)
with the EU in this context and nine other countries are
negotiating similar agreements.

Moreover, the EUTR is encouraging non-EU consumer
countries 每 such as Australia, Japan and Korea - to adopt
or consider similar regulatory measures. And other non-
EU European countries, such as Norway, Iceland, and
Lichtenstein, are currently implementing the EUTR as

Within the EU, there is evidence that the EUTR ※has
encouraged more responsible sourcing policies and,
therefore, demonstrated its potential to change operators*
market behaviour§. Communication campaigns carried out
by both the Commission and member states played an
important role in this context.

Legal action against four EU member states
Delays in national implementation of the EUTR, both in
designating Competent Authorities and drawing up
national legislation and penalties as well as in checks on
operators have been identified as major shortcomings
during the reporting period. All of these factors have
hampered the creation of a ※level playing field§ for all

Several Member states started implementing the EUTR
※only late in the reporting period§, according to the report,
that is almost two years after the Regulation entered into

Against this background, the Commission started bilateral
dialogue with eight member states, as a result of which
several countries ※were brought to compliance§. However,
the Commission says it has started legal action due to noncompliance
against Hungary, Greece, Romania and Spain.

Spain had not appointed a competent authority during the
period under report. Moreover, all four affected countries
are still in the process of working out sanctions for EUTR

Authorities understaffed and underfunded
The Commission also noted that the amount of financial
and human resources dedicated to EUTR implementation
by the Member states varies considerably. The numbers of
staff assigned to the EUTR in the individual member states
varies from 1 to 200, for example.

In many case, resources appear ※disproportionately low
compared to the number of operators in those countries,
leaving the deterrent effect of the enforcement activities
rather limited§.

The Commission also found that only a fraction of
operators had been subject to checks by CAs; and several
member states had not yet started carrying out checks at

Where financial resources are concerned, the Commission
noted that some member states have not allocated any
additional financial resources at all for the implementation
and enforcement of the EUTR.

Unequal penalties, variations in speed of appointing
Competent Authorities, and lack of staff and money for
EUTR enforcement have prevented the creation of a level
playing field throughout the EU.

Cooperation and communications more favourably

Both the Commission and member states carried out
awareness raising campaigns before the EUTR entered
into application. On the part of the Commission, a
Guidance Document was developed to help ※align the
interpretation of key provisions of the regulation§.

Moreover, the Commission and member states cooperated
in the form of expert meetings on implementation and

The Commission also set up an electronic communication
platform for information exchange between member

At the same time, the Commission conceded that guidance
for small and medium-sized enterprises (SMEs) 每 both by
the Commission and member states 每 was rather limited.

SMEs are finding EUTR compliance difficult
On private sector compliance during the first two years of
application, the EC found that SMEs were struggling more
than larger companies to fulfil EUTR obligations.
According to the review, SMEs consider EUTR
compliance ※a challenge, due to difficulties in
understanding the technical requirements of the due
diligence system (DDS), lack of staff with adequate
knowledge and experiences necessary for exercising the
DDS and/or limited financial resources§.

In order to carry out more cost-effective due diligence, the
Commission recommends that operators make more use of
voluntary third-party verified schemes in the riskassessment
and risk-mitigation process.

It also conceded that the ※role of third-party verified
schemes in the implementation of the legislation could be
further clarified in the Guidance Document§ and found
that ※the main timber certification schemes have adapted
their standards to reflect the scope of the legality definition
embedded in the Regulation and have emerged as a
practical option that can be used by EU operators§.

Private sector compliance ※uneven and insufficient§
The analysis of private sector compliance also revealed
that ※operators have not consistently implemented due
diligence requirements§ during the reporting period.
However, the situation is gradually improving.

One of the main points of criticism identified by
Competent Authorities during checks was that there was
often a lack of understanding of all elements needed for
the due diligence system, so ※while many operators had
some type of DDS, they did not always meet the EUTR

Enlisting the help of a Monitoring Organisation (MO),
which provide compliant DDS may be helpful in many of
these cases. However, the review found that operators*
interest in MO services has so far been very low. This was
partly attributed to the fact that MOs are obliged to alert
the Competent Authorities in cases of major EUTR

Enlarging the product scope under consideration
The product scope of the EUTR 每 or existing ※loopholes§
每 has been a subject of frequent criticism by media and
NGOs. As a result, it was part of the recent stakeholder

The outcome of the consultation was mixed, according to
the Commission; while many stakeholders do not consider
the current product scope optimal and wanted to include
products like wooden seats, print media, musical
instruments and wooden coffins, others believed the scope
should not be expanded before the EUTR was fully

Especially in the case of print media, the Commission
concluded that the ※variety and complexity of printed
good would need to be taken into account when
considering enlarging the current product scope§.

Commission calls upon member states to step up

As a result of the findings of the review, the Commission
main concern was that member states need to put more
effort into implementing and enforcing the EUTR. Human
and financial resources, in particular, should be increased
to raise the number and quality of checks on operators.

Moreover, there should be additional efforts to inform
operators, especially SMEs, about their obligations and
cost-effective possibilities of carrying out due diligence.

The Commission says it will continue to provide guidance
and facilitate communication between member states, with
the ultimate aim to achieve uniform implementation and
enforcement of the Regulation. The Commission says it
may also consider expanding the product scope. On the
other hand, it sees no occasion for changing the
substantive provisions of the EUTR, as ※the evaluation did
not identify a clear need for changes in the core elements
of the legislation§.

Industry echoes call for EUTR enforcement
During a meeting with the EU Environment Commission
in November last year representatives of the EU timber
industry and NGOs joined forces and called for the EUTR
to be more stringently enforced.

This meeting followed a statement organised by WWF last
September, which was signed by more than 65 companies
and seven industry associations.

This statement urged the Commission to expand the scope
of the Regulation, claiming that less than 50% of the EU*s
wood product imports are currently covered. It also called
for uniform implementation and enforcement of the EUTR
in all Member States.

Norway prepares for EUTR enforcement
Outside the EU, Norway is making progress in
implementing the EUTR, according to a report in the
ETTF Newsletter. A Norwegian importer was quoted
saying that Norwegian companies were informed in
December they had one year to get their DDS in place.

Norway*s approach to implementing and enforcing the
EUTR will be very similar to Sweden*s, according to the
article. Norway will apply the EUTR to both join in efforts
against illegal timber trade and also to facilitate trade with
EU countries, by operating to similar standards.


LM       Loyale Merchant, a grade of log parcel  Cu.m         Cubic Metre
QS        Qualite Superieure    Koku         0.278 Cu.m or 120BF
CI          Choix Industriel                                                       FFR           French Franc
CE         Choix Economique                                                        SQ              Sawmill Quality
CS         Choix Supplimentaire      SSQ            Select Sawmill Quality
FOB      Free-on-Board     FAS            Sawnwood Grade First and
KD        Kiln Dry                               Second 
AD        Air Dry        WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through MR              Moisture Resistant
              the boards from one log are bundled                      pc         per piece      
              together                      ea                each      
BB/CC  Grade B faced and Grade C backed MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF        Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot              Price has moved up or down

Source:ITTO'  Tropical Timber Market Report

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