This article deals with the sanctions of the European Union against the Russian government, the consequences for the timber trade with the logistical and financial impacts, the consequences on the maintenance of sustainable management certification schemes in Russia and Belarus (positions FSC and PEFC labels) as well as the weight of the Russian and Ukrainian timber sectors in world markets with a focus on trade with France.
Update on EU sanctions against the Russian government:
On February 28, the Council of the EU approved:
On March 2, the EU established the exclusion of 7 Russian banks from the SWIFT system of global financial transactions. The SWIFT system is the most widely used international financial messaging infrastructure. It allows banking establishments to communicate with each other the essential information of the transactions they wish to carry out with each other.
On March 15, 2022, the EU decided to impose new economic sanctions. None of them directly concern the timber industry . The new measures include the prohibition of:
The Council extended the list of persons linked to Russia ‘s industrial and defense base , to whom stricter export restrictions were imposed with regard to dual-use goods and goods and technologies which could contribute to the strengthening technology of Russia’s defense and security sector. The EU has also introduced:
To find out about all the EU measures in response to the crisis in Ukraine, you can consult the website of the Council of the EU .
At the moment, no measures are taken to stop the supply of timber to the EU from Russia. Nevertheless, financial and logistical impacts can be expected, adding to market volatility. Indeed, EU financial sanctions can complicate financial transactions and supply logistics. For example, some shipowners have already stopped their bookings to and from Russia ( CMA CGM, Maersk, etc.). To date, the majority of container transport has been blocked, but timber can still be repatriated via conventional ships or RORO. To adapt to these difficulties, importers and planers are redirecting their supplies to Scandinavian countries, their good stock level also allows them to find alternatives.
Regarding Belarus, on March 2 the Council of the EU decided to go further, by introducing a new wave of sanctions, given its role in the invasion of Ukraine by Russia. In particular, the Council introduced the ban, until June 2022:
Faced with the invasion of Ukraine by the Russian government, the PEFC and FSC sustainable forest management certification schemes reacted.
On March 4, PECF International’s Board of Directors met to discuss Vladimir Putin’s military aggression against Ukraine and its implications for PEFC and PEFC-certified forest owners and companies . It has been decided that “all wood from Russia and Belarus is ‘ conflict wood’ and therefore cannot be used as PEFC certified products”. The categorization of wood from Russia and Belarus as conflict wood follows the adoption of the resolution on aggression against Ukraine by the United Nations General Assembly, which “deplores in the strongest terms the aggression of the Russian Federation against Ukraine […] [and] the involvement of Belarus”. The PEFC International Board continues to monitor the situation and will consider further action as necessary. A FAQ on PECF’s position is available here
PEFC stands for:
For its part, FSC international also took action on March 8 by banning the marketing of certified products from Russia and Belarus. After taking a few days to analyze the situation in order to take “wise steps that can guarantee the continuation of sustainable forest management “, FSC decided that ” due to the link between the forestry sector in Russia and Belarus with the conflicts armed, no FSC-certified product or controlled wood from these countries will be authorized to be marketed . “. This means that wood and forest products from Russia or Belarus cannot be sold as FSC-certified while the armed conflict continues.However, to continue to protect forests in Russia, FSC will allow forest management certification holders to maintain their forest management certification, but without permission to trade or sell FSC-certified wood.
An FAQ on FSC’s position is available here . It also specifies the disposal possibilities of existing stocks: products in stock outside Russia (i.e. invoiced to a company not located in Russia) can be sold as FSC certified without time limit. . Products purchased in Russia can still be FSC certified until April 8.
FSC stands for:
Some figures on the Russian timber market:
French Russian timber market:
In relation to overall French consumption of around 9 million m3 of softwood, Russia weighs around 3% with 300,000 m3 of Russian wood consumed in France. Nevertheless, concerning the quality of “wood from the North” (wood from Finland, Norway, Sweden or Russia above the 57th parallel and recognized for their mechanical properties) the consumption of Russian wood represents 20 to 25% of the wood market. from the North in France.
The main Russian wood products imported into France are:
The main uses are structural uses, facings, exterior coverings, decking.
International Russian timber market:
With 815 million hectares of forest, the Russian Federation alone represents 20% of the world’s forests ( source FAO ). The total forest area consists of approximately 33.5% primary forest, 64.1% other naturally regenerated forest and 2.4% planted forest. All forests located in Russia belong to the state.
According to data from the Russian Federal Statistical Service FEDSTAT, the Russian forest industry produced around 212 million cubic meters of logs in 2017 which were mainly used by local industry, while 19.4 million cubic meters of logs ( around 10%) were directly exported. Russia is one of the largest softwood lumber exporters in the world. More than half of the volumes of sawn wood, veneered wood and plywood produced in Russia are exported.
Monthly Russian softwood lumber exports to major world importers in 1000 m3 (source woodstat)
In 2021, Russia exported 30.6 million m3 of sawnwood. Russia’s main partners for the timber market are by far China (16.6 Mm3), Uzbekistan (2.2 Mm3). For comparison, France imported 270,000 m3 of Russian sawnwood in 2021.
Monthly Russian roundwood exports to the main world importers in 1000 m3 (source woodstat)
In 2021, Russia exported 14 million m3 of roundwood. Russia’s main partners for the roundwood market are China (7 Mm3) and Finland (5.8 Mm3).
Some figures on the Ukrainian timber market:
According to FAO data published in 2015, Ukraine has approximately 9.7 million hectares of forest, which is 16.7% of its total land area. The main tree species are Scots pine, pedunculate oak, common beech, common spruce, silver birch, black alder, common ash, hornbeam and common fir. Coniferous forests (42% of total forest cover) and particularly Scots pines are predominant. In the hardwood category, the most represented species are oak and beech (32%) (FAO, 2004).
According to data from FAOSTAT, the Ukrainian forest industry produced more than 8.2 million cubic meters of logs in 2015, of which 36.5% was exported.
Data table :