2011 Statistics - Germany

Transcription

1 2011 Statistics - Germany Timber trade monitoring in support of effective, efficient and equitable operation of the EU Timber Regulation (EUTR) Photo credit: AHEC

2 Introduction Background The EU Timber Regulation (EUTR), which comes into force in March 2013, raises important questions for the European wood trade. Will the regulation increase or decrease wood s competitiveness with other materials, or lead to discrimination against suppliers lacking technical or financial resources to provide assurances of legality? Might it discourage smaller operators from engaging in the wood sector at all and encourage retailers currently buying, say, wood furniture with long and complex supply chains from Asia to switch to European alternatives with shorter supply chains, or even to alternative materials? There s a question mark too over whether it will boost demand for certified sustainable forest products or favour alternative risk based legality verification systems. Will it divert wood imports from EU member states with tough enforcement regimes towards those where enforcement is weaker, or will implementation be so ineffectual that it has little impact? To help answer these questions, the European Timber Trade Federation (ETTF) has initiated a program of regular market monitoring to be undertaken by Forest Industries Intelligence Ltd (FII), with support from the UK Department for International Development (DFID). The reports, of which this is the first on Germany, will deliver consistent analysis of EU import and production data derived from Eurostat and a range of UN agencies, combined with statistics on other key criteria; supplier countries forest type (boreal, temperate, and tropical), FLEGT VPA status, and coverage by forest certification scheme and other systems of risk mitigation. It will also focus on corruption and national income levels. Data coverage, sources and assumptions The report includes the following data and assumptions for Germany: Import data: qcovering softwood and hardwood logs, softwood and hardwood sawn, softwood, hardwood and combi plywood, softwood & hardwood veneer, particleboard, fibreboard, softwood and hardwood joinery products (flooring, doors, glulam, windows), and wood furniture. qderived ultimately from Eurostat but validated using FII s trade database system. qreported in euro value and quantity unit (m3 for all products except fibreboard and flooring, which are reported in m2). Production data: qcovering softwood & hardwood saw and veneer logs, softwood and hardwood sawn, softwood & hardwood plywood, softwood and hardwood veneer, OSB, other particleboard, MDF, hardboard and insulating board. qin cubic meters (m3) between 2007 & qsourced from UNECE Timber Committee database Total supply of solid timber products : q solid timber products include all those assumed This report has been prepared with the support of the Department for International Development If you have any comments on this report please contact: Rachel Butler, Independent Technical Advisor to the European Timber Trade Federation Tel: +44 (0) ; Mob: + 44 (0) ; Skype: raichbutler The report has been prepared for the ETTF by: Rupert Oliver, Forest Industries Intelligence Limited, The Little House, 18 Church Street, Settle, North Yorkshire BD24 9JE, UK Mob: +44 (0) ; rjwoliver@btinternet.com; Skype: rupert.oliver to be derived from saw and veneer logs. Composite panels, such as MDF and OSB, and pulp and paper products are not included as these derive from small dimension logs or wood waste material. While imported wood joinery and wood furniture products contain composite panels, for this analysis it is assumed they are solid timber. It is also assumed that all wood joinery and furniture comprises wood material, so RWE volumes for these products are likely to be overestimates. qreported in m3 round wood equivalent (RWE) calculated from quantity data (m3, m2 or tonnage) using standard conversion factors. qdata provided for 2007 and 2011 as the latter is the most recent year for which full annual data is available and 2007 was immediately before global recession, so a useful indicator of the impact of recent economic trends. qsources of wood product supply to Germany are summarised by: wood type (softwood, temperate hardwood, tropical hardwood and indeterminate); major product group (e.g. logs, sawnwood, plywood); and region (e.g. domestic, other EU, N. America, S. America, CIS). 2

3 Introduction Total supply of wood products (in RWE terms) to the EU-25 and individual ETTF countries is summarised against the range of criteria relevant to EUTR implementation. Exposure to verified negligible risk This is a rough measure to identify gaps in independent certification and verification systems intended to mitigate the risk of illegal wood entering supply chains. It is based on the percentage area of certified or legally verified commercial forest area in each individual supplier country. For example, if 40% of its forest area is known to be independently certified or legally verified, the level of exposure to verified negligible risk of a country s wood products is assumed to be 40%. The certified/ verified forest areas are calculated by comparing data from the various certification and verification systems with UN FAO figures for areas of productive forest land. Level of exposure data is broken down by verification system, including FSC, PEFC, or system of legality verification (such as SGS TLTV, Smartwood VLO, or OLB). For this exercise, wood from countries covered by FSC-endorsed National Controlled Wood Risk Assessment is also considered verified negligible risk. To avoid double counting, areas dual certified to FSC and PEFC are accounted separately. Adjustments are also made for a few countries, such as Brazil and the USA, where there is a big difference in the level of certification in hardwood and softwood forests. The verification systems covered are summarised in the report Annex on Programs delivering verified wood products. The list is not comprehensive for private sector initiatives, and does not imply endorsement of a system s reliability by the ETTF or sponsors of this report. It only identifies independent third-party systems that claim to offer legality assurance. The initiatives identified also do not include systems of state regulation that may be at least as effective in eliminating illegal supply risk. Corruption Perceptions Index Each year non-governmental anti-corruption organisation Transparency International (TI) publishes a Corruption Perceptions Index (CPI) ranking countries by perceived levels of corruption, as determined by expert assessments and opinion surveys. This currently ranks 178 countries on a scale from 10 (very clean) to 0 (highly corrupt). The index is not perfect as, for example, variability in a country s score can result from both changed perception of a country s performance, or a change in the sample and methodology of surveys used. However, separate studies have found significant correlation between the CPI and other proxies for corruption; black market activity and over-abundance of regulation. A 2004 study of global illegal logging for the American Forest and Paper Association also suggested a strong relationship between independent estimates of suspicious log supply in different countries and CPI scores. The CPI is also seen by the FSC and PEFC as a useful starting point for identifying whether timber suppliers are high or low risk on illegality. EUTR-specific measurements In this report, exposure to corruption is assessed for both domestically supplied and imported wood products and wood supply to the EU-25 and individual ETTF member countries is classified into three types; low exposure to corruption from supply countries with a CPI of 7 or above moderate exposure to corruption from countries with a CPI of between 4 and 6.9 high exposure to corruption with a CPI of less than 4. World Bank Income Group The report summarises wood supply to the EU and ETTF member countries using the World Bank Income Groups, which are based on calculations of gross national income (GNI) per capita. The World Bank classifies every national economy as follows; high income (GNI greater than $12,475) upper middle income (GNI of $4,036 to $12,475) lower middle income (GNI of $1,026 to $4,035) and low income (GNI less than $1,025). This measure is used here to assess whether significant changes are underway in the proportion of wood sourced from high and low income countries. In the interests of equity, it is important to monitor the impact of the EUTR on trade flows with the world s poorest nations. EUTR might encourage a reduction in EU imports from poorer countries as buyers seek to minimise potential risks. Studies by TI suggest a strong relationship between levels of corruption and national income, so it is likely that risk of illegal logging will be higher in poorer countries. Suppliers are also likely to lack resources for independent legality verification. FLEGT VPA Licensed Timber This report assesses the proportion of wood imports by the EU as a whole, and by individual ETTF member countries, derived from countries that are currently negotiating or implementing timber licensing systems through Forest Law Enforcement Governance and Trade Voluntary Partnership Agreements (FLEGT VPAs). Under the EU FLEGT Regulation (2008), controls are established for entry of timber to the EU from FLEGT VPA countries. Once agreed, VPAs include commitments from both parties to halt illegal timber trade, notably with a license scheme to verify legality of timber exported to the EU. Under the EUTR, VPA-licensed timber does not have to undergo due diligence illegality risk assessment by companies that first place it in the EU (termed operators ) and no further risk mitigation action is required. By November 2012, six countries had agreed VPAs with the EU; Cameroon, Central African Republic, Ghana, Indonesia, Liberia, and Republic of Congo. A further six are negotiating VPAs; Democratic Republic of Congo, Gabon, Guyana, Honduras, Malaysia, and Vietnam. Fifteen more from Africa, Asia and Latin America have expressed interest in VPAs.

4 germany supply trends Wood supply Germany s wood supply position is unusual in the European context. Germany s forest resources are the largest in Europe. The country has more than 11 million hectares of high-grade diverse forests with steadily growing timber stocks. However Germany is also characterized by high levels of domestic forest utilization and only limited potential to expand commercial timber production. Wood utilization rose dramatically from the early 1990s and peaked in Considerable investment in roundwood processing in the 5 years between 2002 and 2007 led to a particularly significant increase in output. Since then domestic harvesting has declined, partly due to the recession, but also due to constraints on Germany s forest resource. Utilisation of spruce, the most important commercial species, has exceeded growth and stock has been falling in recent years. The total annual timber harvest in German forests has remained below increment. Additional domestic production is technically feasible. However this would require a shortening in rotation periods which would conflict with government policy favouring closeto-nature forestry and would be strongly resisted by environmental groups. Much of the production increase would have to come from small private forest holders, few of which depend on forests for income and have little incentive to boost supply. As a result Germany is becoming relatively more dependent on imports, mainly from other EU countries. Wood production Softwood sawlog production fell 40% from 42.8m m3 to 25.5m m3 between 2007 and Hardwood sawlog production fell 9% from 4m m3 to 3.5m m3. Sawn production fell between 2007 and 2008, but then recovered slowly as declining domestic softwood log supplies were supplemented by imported logs. Germany s formerly dominant veneer sector has shrunk since 2007 as production has moved to lower-cost countries. Production in Germany s large composite panels sector fell from 17.1m m3 in 2007 to 11.7m m3 in Import overview Between 2007 and 2011, Germany s intra-eu imports of solid timber products increased 26% to 25.1 million m3 (RWE), mainly due to rising log imports, particularly from the Czech Republic, Poland and France. In contrast, imports from outside the EU fell 9% to 7.7 million m3. Extra-EU imports are dominated by sawnwood (notably softwood from Russia), and plywood (particularly softwood from Brazil, and hardwood from China and Russia).

5 germany supply trends Imports by supply region Overall the proportion of German extra-eu imports derived from different regions has remained quite stable over the last 5 years. The proportion of imports has declined from Russia/CIS (46% to 42%) and Africa (4% to 2%). The proportion of imports has increased from non-eu Europe (9% to 12%), China (18% to 20%) and SE Asia (10% to 11%). Imports have remained stable from Latin America (9%) and North America (4%). Imports & FLEGT VPAs Countries having signed or now negotiating VPAs supplied Germany with 800,000 m3 (RWE) of wood products in 2011, 10% of imports from outside the EU. VPAs have strong potential to fill the gap in alternative risk mitigation options for products supplied to Germany from South East Asia and Africa. Lack of FLEGT VPAs or equivalent legality verification systems in Russia/ CIS and China is a challenge for EUTR implementation in Germany. Imports by income group Between 2007 and 2011, German imports from low income and low middle income countries fell from 3.2 million m3 (RWE) to 1.3 million m3. Extra-EU imports from upper-middle income countries increased from 4.4 million m3 to 5.4 million m3. These changes were due mainly to China shifting from lower middle to upper middle income status. Increasing imports from other European countries boosted the proportion derived from high-income countries. Exposure of imports to legality verification The level of exposure to verified negligible risk for German domestic wood increased from 90% in 2007 to 100% in PEFC certified forest area in Germany increased between those years and the remaining gap has been filled by an FSC approved National Controlled Wood Risk Assessment confirming low risk of illegality for Germany. Between 2007 and 2011, level of exposure to verified negligible risk of German imports from within EU increased from 59% to 67%, with a particularly large increase in exposure to forest areas dual certified to both FSC and PEFC. Level of exposure of imports from outside the EU also increased from 15% to 29%. This last trend is mainly due to Germany importing more from non-eu European countries where there are relatively high and rising levels of both FSC and PEFC certification. Level of exposure to verified negligible risk of German imports from Asian countries is particularly low and is a challenge for EUTR Photo credit: AHEC implementation Imports and corruption Much imported wood derives from regions with both high perceived levels of corruption and low levels of certification - notably in Russia, China and Latin America. While N. American supply is not well covered by certification, this is less of a problem in a region with low corruption. In 2011, some German imports from with the EU came from countries with high perceived corruption - the largest volumes from Italy.

6 germany imports The total value of German imports of wood products fell from 7 billion euro in 2007 to 6.2 billion euro in 2009 before rebounding to 8 billion euro in Wood furniture is the single largest component of wood product imports, accounting for 49% of total import value over the last 5 years. Most wood furniture imports derive from other EU countries, notably Poland, Italy and Denmark. However, the recent volatility in German imports is due much more to timber products rather than furniture. German imports of logs, sawnwood and plywood dipped in line with a slowdown in German construction activity in However imports of these commodities increased strongly in 2010 and 2011, partly owing to relatively robust economic conditions in Germany and partly to declining availability of domestic logs. Imports of softwood and birch logs, mainly from other EU countries, increased very strongly during this period. Imports of softwood sawn lumber also rose significantly between 2009 and 2011, notably from Scandinavia, Austria, and the Czech Republic. However tropical wood imports have remained low overall. Source: Forest Industries Intelligence Ltd analysis of trade data supplied by Business Trade Statistics Ltd

7 germany imports Source: Forest Industries Intelligence Ltd analysis of trade data supplied by Business Trade Statistics Ltd

8 germany imports Source: Forest Industries Intelligence Ltd analysis of trade data supplied by Business Trade Statistics Ltd

9 This report has been prepared with the support of the Department for International Development If you have any comments on this report please contact: Rachel Butler, Independent Technical Advisor to the European Timber Trade Federation Tel: +44 (0) ; Mob: + 44 (0) ; Skype: raichbutler The report has been prepared for the ETTF by: Rupert Oliver, Forest Industries Intelligence Limited, The Little House, 18 Church Street, Settle, North Yorkshire BD24 9JE, UK Mob: +44 (0) ; rjwoliver@btinternet.com; Skype: rupert.oliver