2nd Meeting of theEU-China Round TableBrussels, 14 November

2007

Seppo Kallio

Forestry and Forest Industry in EU

2Source: EFI Research Report 14

High quality forest industry products High quality forest industry products to the European marketsto the European markets

European forest resources are located in Scandinavia and in Russia

HelsinkiHelsinki

27 April 2007

Main global forest industry companies, total turnover in 2006, bill. EUR

27 April 2007

Population and global consumption of forest industry products

332293

0,68

North America

55739

0,09

Latin America

734132

0,26

Europe

3821 28

0,04

Asiaexcl. Japan

904 7

0,02

Africa

32 159

0,34

Oceania

127 247

0,26

Japan

Population mill. personsPaper and paperboard consumption kg/person/aSawn wood and wood-based panels consumption m³/person/a

Business environment in a major change Low profitability, increasing costs

and decreasing prices

Markets and competitive advantages in radical change Strong demand growth in Asia Low growth in traditional markets -

overcapacity Low cost raw material sources in Latin

America

ICT, Internet and electronic media changing consumption patterns

Energy, climate and environment issues gaining importance

Growth comes from Asia and Latin America

Source: Jaakko Pöyry

Global growth of paper and paperboard demand in 2004 - 2020

Growth in global paper capacity 2004-2020, 135 million tons

0

10

20

30

40

50

60

China OtherAsia

WesternEurope

LatinAmerica

OtherEurope

Russia NorthAmerica

Japan Otherworld

mill. tons

Source: Jaakko Pöyry

7

North America

China

Europe as a technological leader?

Central Europe & Scandinavia

1970

-198

519

85

2000-2010

2010 +

New technology 2010

Old technology

Changing technological flows

- coated magazine paper as an example

Traditional demand for paper

Volume business

Digital printing and hybrid media

Traditional demand for sawn timber and plywood

Volume businessReactive and

protectivepapers

High living quality,characteristics of wood

Building with wood, building systems

Trasportation,packaging, hygiene products

Competitiveness through higher value-added production

Forest-Based Sector Technology Platform: European paper industry

vision for 2030

1. The European forest-based sector plays a key role in a sustainable society.

2. It comprises a competitive, knowledge-based industry that fosters the extended use of renewable forest resources.

3. It contributes significantly to a bio-based, customer-driven and globally competitive European economy.

EU FOREST ACTION PLANtowards a coordinated framework

for forest related policies

1. Background EU Forestry Strategy 1998 Commission Communication on the

Implementation of the Forestry Strategy (March 2005)

Council Conclusions: an EU Forest Action Plan to be presented in mid-2006

Forest Action Plan adopted by the Commission on the 15.6.2006

Council Conclusions under preparation (expected to be adopted in October 2006)

2. Preparation Workshops with invited experts Co-operation with the Member States: 3

working groups of the Standing Forestry Committee

Stakeholder consultations: Advisory Group for Forestry and Cork, informal contacts with representatives of forest owners and other professional groups

Taking into account the opinions of European Parliament Economic and Social Committee Committee of the Regions

3. Purpose of the Action Plan

The overall objective of the Action Plan is to enhance

Sustainable forest management and The multifunctional role of forests.

The Action Plan will provide a framework for forest-related

actions at Community and Member States level

serve as an instrument of coordination between Community actions and forest policies of the Member States

The Action Plan builds on The EU Forestry Strategy The principle of subsidiarity in forest

related policies

4. Four main objectives To improve long-term competitiveness of the forest sector To maintain and enhance biodiversity, carbon

sequestration, integrity, health and resilience of forest ecosystems

To contribute to the quality of life by preserving and improving the social and cultural dimensions of forests and forestry

To improve coherence, co-operation and communication in forest related matters

5. Examples of key actions

Competitiveness Promote and support research and technological development Valuation non-marketed forest goods and services Assess feasibility of mobilisation

Environment European Forest Monitoring System Enhance the protection of European forests

Quality of life Maintain and enhance the protective function of forests

Coordination and communication Improve working methods of the SFC Strenghten EU profile in international processes Encourage the use of wood from sustainably managed forests

6. Key actions and their implementation

18 key actions supporting the four objectives

Joint implementation by the Commission and the Member States

Additional actions that Member States may take with support from EARDF or Life+

Standing Forestry Committee as the co-ordinating body

Road-map for implementation under preparation

FOREST PROTECTION IN EUROPE

Protected and protective forests in Europe, no active or minimum intervention

Sources: State of Europe’s Forests 2003; Global Forest Resouces Assessment 2005, FAO

27

%

15

,4%

7,3

%

7,2

%

7,1

%

5,9

%

4,9

%

4,3

%

3,9

%

3,9

%

3,9

%

2,6

%

2%

1,3

%

1,3

%

1,2

%

1,1

%

1%

0,8

%

0,7

%

0,7

%

0,6

%

0,6

%

0,6

%

0,4

%

0,4

%

0,3

%

0,2

%

0,2

%

0,2

%

0

500

1000

1500

2000

2500

30001000 ha

0%

5%

10%

15%

20%

25%

30%%

1000ha%

EUROPEAN FOREST CLUSTER

Forest industry cluster in Finland

Woodconstruction

ForestryPackaging

Printing

Chemical industry

Machinery and equipment

Automation and information technology Logistics Energy

Research and education

Services- consulting- risk management

FOREST INDUSTRY• Paper, board, pulp• Wood products industry