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Wood Products Prices in Europe

01 – 15th November  2018


Report from Europe  

  STTC Conference raises questions about role of
tropical forest certification

The previous Tropical Timber Market Report (16 ¨C 31
October 2018) provided an introductory report of the
Sustainable Tropical Timber Coalition (STTC) annual
conference in Paris on 26 September. That report
highlighted the positive mood generated during the
conference by the firm focus on the new tropical wood
marketing initiatives launched by ATIBT and STTC with
their strong links to the development of FSC and PEFC

However, discussions at the STTC Conference also raised
important questions about the challenges of achieving
certification in tropical countries and the underlying value
of initiatives that promote FSC and PEFC certified wood
to the exclusion of other, non-certified, tropical wood

As noted in the previous report, STTC has established a
2020 target ¡°to increase European sustainably sourced
tropical timber sales to 50% above 2013 levels¡±. While
STTC does not explicitly define ¡°verified sustainable¡±, the
assumption in STTC reporting to date is that ¡°verified
sustainable¡± refers to FSC and PEFC certified timber.

The rationale for STTC¡¯s support for marketing of FSC
and PEFC certified wood was explained in a series of
introductory presentations to the Paris conference.

Daan Wensing of IDH, the Dutch agency financing STTC,
began by showing a slide with satellite data from Central
Africa to demonstrate that certified forest coincided
closely with areas free of deforestation.

Mr Wensing went on to say that while there was evidence
that certification could play an important role to help
conserve tropical forest, the level of market recognition
and reward for certified products was weak and had
declined since the global financial crises. STTC was
formed, he said, with the intent of reversing these trends.
Robert Hunink, President of ATIBT, said that ATIBT has
also formally associated itself with the STTC target to
achieve 50% certified timber supply to the European
market by 2020. He commented that ¡°certification is the
only guarantee that forests will continue¡±.

Mr Hunink said that a key role of ATIBT is to help
companies that want to achieve certification. However, he
also noted that achievement of the STTC procurement
target required measures outside the direct control of

Mr Hunink highlighted the need for greater focus on the
profitability of certified operations in tropical countries,
suggesting there should be tax incentives for certified
operations in the leading tropical supply countries and
greater willingness on the part of buyers to pay premiums.
The latter was heavily dependent, in turn, on the will of
European public agencies and other large buyers to
demand only certified wood.

However, Mr Hunink also said that each forest concession
must have the option to choose the appropriate
certification system, whether FSC, PAFC, and PEFC. He
hinted at the value of a phased approach and continuing
need for innovation in certification and procurement
practice, observing that certification using existing
procedures is ¡°a long and costly process¡± and concluding
that ¡°we need a change in approach that is radically
different and patient¡±.

Ms. Jessica Tholon of Le Commerce du Bois (LCB), said
the French trade association had been working closely
with STTC since 2014 to develop responsible procurement
policies and to boost sales of certified tropical timber.

However, in the case of LCB, rather than apply a target for
certified imports to the entire membership, LCB had
chosen to work with five companies willing to make a
public commitment and to report progress, namely Bois
des Trois Ports, CID, Rougier, Pasquet, and Tradelink.

According to Ms. Tholon, the proportion of certified
product in total tropical trade reported by the five
companies ranged from 10% to 55% in 2017, with most
companies reporting an increase compared to the previous
year. However, said Ms. Tholon, continuing supply
difficulties constrained these efforts to deliver more
certified tropical product.

UK TTF questions over-reliance on certification as
sustainability measure

While most speakers at the STTC Conference were cheer
leaders for the procurement targets adopted by STTC, a
cautionary note was introduced by David Hopkins,
Director of the UK TTF.

Mr Hopkins said that while the TTF supported the concept
of increased procurement of certified wood, in practice the
targets for certified tropical timber are overly-ambitious
and should be reconsidered.

Mr Hopkins said that TTF members have been
implementing a responsible procurement policy now for
many years, which is reflected in an impressive ¡°headline
statistic¡± from the latest annual audit report, that 90% of
timber placed on the UK market by TTF members is

However, closer analysis of this data shows that the high
proportion of certified is just indicative of the very large
proportion of UK timber imports sourced from
Scandinavia. Considering tropical wood in isolation, at
most 30% of wood traded by TTF members is certified
and the actual proportion may be even lower given
uncertainties of measurement.

In the tropical segment of the UK market, according to Mr
Hopkins, the total quantity of tropical imports continues to
fall, and there are even signs that the certified proportion
of this shrinking segment is declining.

Mr Hopkins asked the question, ¡°have we reached peak
certification?¡± He wondered whether the existing STTC
method of relying only on certification as a metric of
sustainable procurement is appropriate in the current
market situation.

Europe is declining in importance relative to other global
markets for tropical timber and needs to maintain leverage,
while there is also intense pressure on demand from other
materials, emphasising the need for a focus on wider
competitiveness issues.

Mr Hopkins said that ¡°in future plans, we need to redefine
goals and set targets based on careful assessment of the
market reality, to look and see what is actually out there,
rather than what we would like to be out there¡±.
¡°We need to be aware of other initiatives, such as FLEGT
which is also relevant.

There is a huge opportunity for FSC and PEFC within that
process, but we should move away from current model of
sole reliance on certification and find a new way forward¡±,
concluded Mr Hopkins.

Measuring certified trade in Europe
To be useful, not only do targets for procurement of
certified wood trade have to be realistic, they must also be

Much of discussion at the STTC conference in Paris
revolved around the methodology to monitor share of third
party certified and legally verified tropical timber in the
European market and more widely in the global market.

The challenges of accurate monitoring were recognised at
the Conference. Neither FSC nor PEFC centrally collate
data on flows of certified material.

An attempt by FSC to achieve this a few years ago, by
requiring certified operators to use of their On-line Claims
Platform (OCP) to record all certified wood transactions,
collapsed in the face of industry concerns about
commercial confidentiality and costs.

This means that monitoring of certified volumes placed on
the EU market is dependent on the willingness of
companies to voluntarily report how much certified wood
they are trading.

However, gathering survey data from traders in often
fragmented supply chains is expensive and companies are
usually reluctant to provide information when under no
obligation to do so. If anything, gathering this data in
Europe is becoming more challenging now that
companies¡¯ procurement practices are under intense
scrutiny by EUTR regulators.

There¡¯s also no way to verify that the information
provided by individual companies is accurate. The
widespread use of volume credit systems and percentagebased
or ¡°Mix¡± labels adds another area of uncertainty.

More positively, at the STTC Conference there was clear
willingness on the part of all those present, including
representatives of FSC, PEFC, European trade
associations, the FLEGT IMM, and large distributors to
co-operate more closely in collating and analysing the data
that might be acquired from surveys. It was also noted
that, in time, expansion of formalised responsible
procurement policies by associations can facilitate
improved data collection.

There was also widespread agreement that efforts to gather
data from traders in Europe should be combined with
efforts to improve the quality and level of access to data
on production volumes of certified timber in tropical
countries. FSC, PEFC and ATIBT all offered to facilitate
this process at the Conference.

To conclude the conference, George White of the Global
Timber Forum (GTF), presented on work commissioned
by STTC to develop and refine the methodology for
monitoring against the STTC targets.

GTF is undertaking the work jointly with PROBOS, the
Dutch consultancy responsible for monitoring
implementation of the NTTA policy which commits Dutch
importers to procurement of certified wood.

Mr White explained that, given the significant challenges
of acquiring comprehensive survey data from EU traders,
the project will be heavily dependent on so-called
¡°exposure to certification¡± analysis to calculate market
share figures.

Essentially the ¡°exposure to certification¡± measure takes
the percentage of certified forest area in a supplier country
and applies this figure to import flows from that country
into specific markets. The method has been pioneered by
the FLEGT IMM, an ITTO project funded by the EC,
which is also advising the STTC project.

¡°The exposure to certification method has its limits,¡± said
Mr White. ¡°But we believe it can be refined by, for
instance, using percentage of certified timber produced
rather than forest area along with targeted trade

Tropical forests fall further behind in global uptake of

There was no detailed consideration of global uptake of
certification at the STTC Conference in Paris, although
this is critical to the success and impact of the
procurement targets set by European operators.

Analysis of this data tends to support the conclusions of
David Hopkins of the UK TTF to the STTC Conference,
that there are signs of ¡°peak certification¡± being reached
and that reliance on certification as the only metric of
sustainable procurement is inappropriate.

In fact, there is reason to believe that reliance on this
metric may be potentially damaging, both environmentally
and with respect to fair and equitable market access for
tropical producers.

According to data derived from the respective certification
frameworks, the total global area of third party certified
forest in June 2018 was 200.5 million hectares by FSC and
307.5 million hectares by PEFC.

Data issued jointly by FSC and PEFC in January 2018
reveals that 71 million hectares of forest worldwide is
certified by both frameworks. Taking account of this
duplication, the total area certified worldwide in June 2018
was around 437 million hectares.

Further review of the certification data reveals that,
following a surge in the decade to 2010 when global
certified forest area increased on average around 30
million hectares each year, the rate of increase has
averaged only around 3 million hectares each year in the
last 5 years.

To put this into perspective, certified forest currently
accounts for 11% of global forest area, only a marginal
increase from around 10% in 2012.

The progress of FSC and PEFC certification is particularly
slow in tropical timber supplying countries. Between 2011
and 2017, the total area of certified forest in tropical
countries increased by less than 10 million hectares
compared to 103 million hectares in non-tropical countries
(if no adjustment is made for double counting of dual

Nearly all the increase in FSC and PEFC certification in
tropical timber supplying countries between 2011 and
2017 was in just two countries, Indonesia (rising 5.5
million hectares) and Brazil (rising 2.7 million hectares).
Much of the rise in both countries was in plantations and
in Brazil a large proportion was likely outside the tropical

Of total global FSC and PEFC certified forest area in
2017, less than 25 million hectares (6%) was in tropical
regions compared to over 410 million hectares (94%) in
non-tropical regions.

There are also indications that certified area globally is
becoming more concentrated in larger state and industry
forest enterprises at the expense of smaller non-industrial

At least half of all newly certified FSC and PEFC forest in
the last five years is in Russia and likely to comprise large
state-owned and operated management units. Nearly all
the rest is in Belarus, Ukraine, Sweden, Canada, and
Norway where most forest production is concentrated in
larger state and corporate management units.

Without a radical change in certification practice in the
tropics, so that there is more recognition of progress
within realistic timescales, serious efforts to increase local
certification capacity, and more equitable access to
certification frameworks, it seems likely that procurement
targets focused exclusively on certified wood will
contribute to a continuing decline in European trade in
tropical products. It may also actively exclude smaller
operators from the European market.

Given the considerable and increasing opportunities for
tropical suppliers in other emerging markets, this approach
would also contribute to a continuing decline in the
leverage of European buyers over forestry practices in
tropical countries.

The success of certification in the tropics is heavily
dependent on ensuring that the costs do not exceed the
willingness of markets to pay so that financial returns to
sustainable forestry operations are enhanced and not
diminished. Any diminution of profits due to certification
of these operations is more likely to encourage than
discourage forest conversion.

There are potential solutions to this problem now being
discussed, notably new forms of ¡°landscape¡± and
¡°jurisdictional¡± certification. In fact, there is significant
progress to develop and pilot these forms of certification.

FLEGT licensing may be viewed, in one sense, as a form
of ¡°jurisdictional certification¡± since it confirms that
timber is supplied in accordance with an effective
framework of national laws governing forest management.

However, excepting FLEGT, there is a certain irony in the
fact that much of the work on ¡°jurisdictional certification¡±
is being applied to commercial cash crops such as palm oil
and soy, rather than to timber products from sustainably
managed forests.

If such certification systems are to be used to justify the
¡°responsible procurement¡± of products from converted
forest land, there is every justification to use similar
systems for those areas maintained as forest. Otherwise the
certification movement will only further erode the
financial incentives for sustainable forest management.

Certification alone ¡°will not get the wood sold¡±- a
demonstration of successful tropical wood promotion

Innovative efforts to promote tropical timber in the
Netherlands featured in the presentation by Eric de
Munck, Manager of Centrum Hout, to the Annual Market
Discussion of the ITTC in Yokohama on 6th November.
Centrum Hout is the Netherlands Timber Information
Centre, an initiative of the NTTA.

Mr. de Munck focused on Centrum Hout initiatives to
increase demand for tropical timber in civil works. As
background he observed that the construction sector in the
Netherlands, the main source of demand for tropical wood
in the country, was hard hit by the financial crises which
led to a sharp downturn in activity in the 2012-14 period.

While the Dutch economy is growing rapidly again, Mr de
Munck said consumption of tropical timber in the
Netherlands in 2017 was only around half that typical
before the financial crises. Main suppliers are Malaysia,
notably of meranti for the window sector, and Cameroon
and Gabon which are especially important for supply of
durable hardwoods for civil works.

Mr de Munck said the NTTA has a target of 90% wood to
be certified sustainable by 2020 and that, through
development and communication of this policy, the trade
is recognised by government and NGOs as a credible

However, Mr de Munck also emphasised that certification
alone ¡°will not get the wood sold¡±. There also needs to be
a strong focus on improving competitiveness relative to
other materials such as PVC which is gaining market

Centrum Hout has developed campaigns targeting specific
end use applications. For example, one plan which aims to
increase use of certified tropical timber in water protection
works is supported by 12 companies. All are provided
with detailed technical and environmental guidance.

Centrum Hout communication activity is also carefully
targeted at the most influential decision makers in the
specification and procurement process. Civil engineers
have been identified as a particularly crucial group and
there is a strong focus on direct contact with the largest
engineering firms to identify their concerns and their
information needs.

Centrum Hout has also commissioned work on life cycle
assessment (LCA) and full life cycle costing studies to
assess the relative environmental impact and costs of using
different materials on a cradle to grave basis.

According to Mr de Munck, science-based LCA studies
have shown that tropical timber from sustainably managed
forests has a lower environmental impact than key
competitors such as concrete, steel and composites.

Centrum Hout has developed a free online carbon
calculator to allow users to easily calculate the carbon
footprint of sustainably sourced tropical timber products.
Short fact-sheets for engineers, architects and other
specifiers have been prepared covering a range of topics
including carbon footprint, the circular economy, and
technical properties of tropical timbers.

Centrum Hout has also established a task force to ensure
an immediate expert response to policy and standards
changes which are becoming increasingly important in
driving demand for different materials.

Mr de Munck said there are signs that these targeted
campaigns are having an impact after two years of
promotion, with tropical wood imports showing signs of
strengthening in the Netherlands, and Centrum Hout
regularly receiving calls from engineers and specifiers
asking for more advice.

A new action plan covering 2019 and beyond is now being
developed, said Mr de Munck, with one aim to link
Netherlands promotional activities more closely with
similar initiatives in other countries.

Mr de Monke concluded, ¡°while we obviously have to
promote sustainable forest management, it¡¯s also
important to share experience of best marketing practices,
to carefully target communication, and above all to focus
on the competition from other materials rather than
competition between different wood products¡±.



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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