Environmental issue and timber industry

Economic global forecast due to environmental. Global objectives, principles and priorities of timber industry. Regional historical, economic, political and cultural aspects of timber industry. Economic affect of issue on regional industry to date.

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Attractive prices for valuable hardwood, paid in cash by Chinese traders at the border encourage illegality, thus significantly damaging the forests and habitats of many species.

Of course, this was mostly sawnwood, not processed timber imported to China with an aim of further processing. Wood-based panels China accounts for 57 % of wood panel production in Asia. China is Asia's leading producer of paper and paperboard (38 % of Asia's production), consumer (40%) and importer of paper and paperboard (47%), followed by Japan. It also exports paper and paperboard.

About 87% of China's import of Russian timber is coniferous softwood, with hardwood making up the remainder. In China, coniferous timber is seldom used for furniture but rather in the building industry and for interior decoration. In the building industry, Russian timber is used to make wooden doors, planks for construction sites, cement forms and supporting material, and for interior decoration. In addition softwood is used for inner and outer materials for solid-wood furniture and upholstered furniture, solid-wood packing materials, transportation brackets, decorative materials for landscaping, and to refurbish old buildings. At present, China's rural houses are mainly brick and wood. But use of wood to frame houses is declining and it is increasingly used for doors and window frames.

MENA countries and China have traditionally been considered mainly as lower end markets. It is reflected in difference of prices for Russian timber in Europe and the MENA region. However, it must be noted that during the recent economic downturn, demand and prices stayed relatively high in the MENA region.

Even though overall imports have quadrupled in the Central Asian countries as well as in China during the last ten years, Russia's market share have further increased to a very dominant position.

Overall imports in North Africa have remained stable, whereas countries in the Middle East have

almost doubled their overall import volumes. All in all, Russia's share of the total imports to MENA region has increased and is approaching 40% . In Japan, Russia's share has increased only marginally; market share in Europe is decreasing. With the ban on Chinese wood harvest import of Russian timber to China increased.

But according to a recent report in The Wall Street Journal, China seems “to be leading the $30-billion U.S. timber industry, hit by a weak domestic housing market, out of the woods” . Russia was its main partner till 2007 when it increased duties on timber exports. Now China relies on Western and American timber.

So, the biggest challenges that Russia has in timber industry nowadays due to environmental issue are:

- Reducing of illegal logging,

- saving boreal forest of Eastern Siberian and RFE forests which play a vital role as a carbon sink and in the mitigation of global warming,

- retaining unique biomass,

- thinking of the ways how 100 % of timber biomass can be used,

- retaining cultures of indigenous people (in Siberia, e.g.) who live near forests which are used in timber production and whose way of living largely depends on forest,

- reducing fires that lead to CO2 emission and storage in atmosphere,

- reducing amount of pollution due to timber plants activity.

Besides that, Russia is burdened by corruption and bureaucracy, a shadow economy, weak institutional framework and a general lack of industrial infrastructure. Many Russian companies have to self-finance and use old equipment.

As the demand for end production and low-cost labor is high, added-value sectors of the industry should grow more rapidly than the raw lumber sector. This trend is expected to provide Russia with decreased reliance within the “cost-basis” segment of the market.

3.3 Suggestions for present responses

Several possible lines of future action for pursuing the development of the timber industry as a response to current challenges facing timber industry in Russia were identified during the analysis work.

In order to save Russian forests and at the same time to become world-leader not only in raw material but in end-production made of wood we suggest the following.

1. To introduce system of certification and labelling

Timber certification is “a system of forest monitoring, timber tracing and wood or pulp product labeling” .

Wood-processing and exporting companies should introduce procedures to trace the origin of wood so that their business may become more transparent. Companies producing or purchasing timber and pulp products can require that it come from legal and sustainable sources. Retail chain stores, architects, construction companies and producers, which purchase or produce timber and pulp products in China can adopt responsible purchasing policies.

For example, in Russia (in Vologodskaya region) labelling and issuing transport certificates were introduced for each lot of wood. It is operated in the following way: copies of a certificate go with every wooden lot. In order to reduce fake there is a hologram. This certificate contains felling license information, also tax number of a company that is involved in harvesting this wood and leskhoz or other logging enterprise. After that one copy remains in a logging enterprise. Another one is stored at road police and control police office. The last one is given to an organisation-buyer of wood. Still there is a disadvantage in connection with this practice: there are no certificates for transit wood or wood transported in the boundaries of a region and to regional customs. “Another shortcoming of the system is that a certificate is issued by a logging enterprise although on blanks of the regional Department of Natural Resources. Hence it is intended to stop poaching but not illegal harvesting of logging enterprises themselves” .

This system already has results since its introduction in 2001. Illegal wood was revealed.

2. To draw investment in processing equipment that helps to use biomass in its fullest and to retain soil and forest.

3. Developing and implementing accurate reporting of actual logging volumes, including sanitary logging by leskhozes.

4. To involve local communities in forest relations and to increase their level of life.

It will help to reduce illegal logging.

5. Converse to biomass power energy and recycling.

Energy can be derived from biomass, which is by the way material that can be obtained on a constant basis. It is in fact byproducts remaining during sawmilling and other timber process. Thus it helps to decrease greenhouse gas emissions, because oil and gas will not be used. Studies by the U.S. government have found “the country's combined forest and agriculture land resources have the power to sustainably supply more than one-third of its current petroleum consumption” .

This kind of technology is already used in the countries of North America.

Some companies use facilities that combine power and heat, thanks to which biomass in converted into electrical energy.

Pulp and paper production is energy-intensive; however mills can generate substantial quantities of energy for their own needs. For example, kraft pulping and bark will be turned to black liquor. Using this technology can help pulp and paper to be self sufficient in terms of heat and power.

6. To observe deforestation.

To co-operate with Center for Global Development's FORMA (Forest Monitoring for Action) initiative and the Group on Earth Observations Forest Carbon Tracking Portal which track deforestation at global, national and sub-national levels.

Especially in the remote areas in Khabarovskiy Kray, Primorskiy Kray, Krasnoyarskiy Kray, Amurskaya Oblast and Chitinskaya Oblast.

7. To re-use timber.

Many companies in USA sell so-called “antique” timber used in decorative purposes.

The utilization of wood broken down into its constituent elements, to a degree depending on the particular industry, is steadily growing as compared with traditional methods of using this raw material in solid form.

The way in which wood is used in construction can be rethought. For example, high posted timber frames can be used.

New materials which are alternative to wood (strawbales, adobe clay or rammed earth) can be used.

Industries are increasingly able to use more various categories of wood and "wood-waste" formerly abandoned or burned. The result is not only a much fuller and more efficient utilization of the basic raw material but also a change in cutting and extraction practices and in forest management. This may be of even greater significance for tropical forests than for forests of temperate zones.

The need for new timber in future should be reduced. Companies such as Procter & Gamble, Kellogg's and Nestle in the UK are replacing wooden pallets with recyclable cardboard versions.

8. Improving the forest inventory system at logging sites.

9. To strengthen state control in the forestry sector and to make every effort to provide transparent information on the timber's origin on the part of companies.

In connection with illegal logging and trade and corruption associated with the Russia-China timber trade WWF recommends the following measures:

* “Government and aid agencies should improve forest sector governance in Siberian and the Russian Far East (which includes reforms in legislation, harvest permits and licenses, transportation documents).

* Russian producers should demonstrate a commitment to responsible forestry by joining the Association of Environmentally Responsible Timber Producers.

* Russian producers must adopt systems to verify the legality and/or sustainability of their operations.

* Companies manufacturing or sourcing wood and paper products in China should ensure it comes from legal and sustainable sources.

* The Chinese government should introduce policies and regulations to prevent the import of products containing illegally-sourced wood.

* The Russian and Chinese governments should enhance bilateral cooperation to combat illegal trade” .

3.4 Suggestions for future responses

Recommendations for future can be summarized as follows.

Wood plantations.

A new tendency which will dominate in timber industry within the upcoming years is harvesting from plantations which offer growing of fast-growing species on small areas of land. It has several advantages - “replacement of cut trees responsible for absorbing of carbon dioxide” ; off-setting the cost of planting, offering a source of timber where there are not enough forests.

If such plantations are managed, they can help to prevent soil erosion, reduce CO2 emissions and prevent flooding.

Disadvantage of such plantations is that they do not possess the same ecological benefits as natural forests do, i.e. liability to fires, soil erosion, flooding, lack of biodiversity due to which local economies and cultures can not use non-timber forest products.

Fast growing species such as Acacia and Eucalyptus can significantly lower water table and deplete the soil of nutrients. Besides that, there is a threat that as legal enforcement and political institutions are weak, natural forest will be purposely cut for plantations. Or they may be named degraded, thus giving an opportunity for establishment of plantation.

New technologies.

Techniques such as star-sawing and turning softwoods into hardwoods (e.g. PLATO and acetylation) are new developments that can help in future.

As discussed in Chapter 2 on page 25 new technologies that are less reliant on wood fibre, can be used.

Also as it was discussed on page 25 new substitutes for plywood and other wood products (density fibreboard, Medium Density Fireboard or wheat straw, Parallam, GLULAM, I-joists, Laminated Veneer Timber, bamboo and soybean stalks for example) can be used. It is good from environmental point of view, as less number of logs is used.

In order to produce some products logs of smaller diameter from plantations can be used.

The use of palm oil and palm oil fibre in mechanical and chemical pulping processes.

Companies can reduce paper consumption by 20 % by simple measures, such as double-sided copying and shift towards electronic communications.

The third chapter covered critical analysis of the timber industry.

We found out economic affects of deforestation on timber industry (shift to re-cycling facilities which is quite expensive, replanting of forests and growing forest plantations) and economic affects of pollution on timber industry (increased use of renewable energy, enhanced energy efficiency, biofilter; green belts; skidders).

In the second section we revealed challenges the industry faces regionally due to environmental. Mostly it is illegal forest activity; then - saving a unique biomass and indigenous people that start to disappear because of timber industry; pollution of atmosphere; export of roundwood due to the shortage of processing facilities.

Later we made some suggestions for present and future responses to challenges the forest sector faces. At first, system of certification and labeling should be introduced. Second, investment in processing equipment and involving local communities in forest relations. Then, converse to biomass power energy and recycling, re-use of timber, observing deforestation and improving the forest inventory system should be present. Also strong state control should be present in timber industry.


During long history man has always interfered into the environment. It resulted in environmental issues such as: climate change, environmental degradation, intensive farming, land and soil degradation, ozone depletion, pollution (water pollution, air pollution), resource depletion, toxins, waste.

The focus of this work was made on forest resources and its preserve. Many forests started to disappear even during the prehistory era due to climate change. It was not until industrial times when forests started disappearing in huge volumes, as people used them for their own needs as a fuel and material.

Appearance of timber industry is connected with humanity's history and his basic needs for heat, protection, fuel and materials. When faced with deforestation, formal forestry practices, forestry schools and tree plantations were established. Forestry laws and regulations, recycling practices were introduced in most developed countries in the 20th century.

Nowadays, governments and international organizations do their best to reduce the effects of environmental issues. These actions include The Kyoto Protocol that helps to reduce greenhouse gases, Reducing Emissions from Deforestation and Forest Degradation (REDD) programs.

That is why although there are definite weaknesses in current environment situation (decreasing total area of forests, illegal logging and clear-cutting) there are definite victories: the global rate of deforestation has recently been slowing and many countries started reforestation programs and programs aiming at mitigating greenhouse gases emission. Good news is that forest is a renewable resource. If nothing is done, emission of CO2, which usually is absorbed by forests, will result in climate change and other global problems.

Several largest timber companies dominate in timber industry. These are International Paper Company, Stora Enso Oyj (Finland), UPM-Kymmene Corporation (Finland), Oji Paper Company (Japan), Weyerhaeuser (USA), Lee&Man Manufacturers (Hong Kong), Shandong Chenming (China), Ballarpur Industries Limited (India).

Timber companies carry out many activities, sometimes inclining towards extensive usage of forest resourced. That is why management of timber industry should be based on the principles defined by Food and Agriculture Organization of the United Nations, Forest Stewardship Council and local policy in each country.

Principles of forestry policy adopted in 1949 by Food and Agriculture Organization of the United Nations include soil and water conservation, the regional approach to forest policy, the approach by subject, importance of international co-operation, function of world congresses (i.e. The World Forestry Congress).

These principles are supplemented by Principles and Criteria for Natural Forest Management adopted in June 1994 by the Forest Stewardship Council. These are compliance with FSC Principles, Tenure and Land-Use Rights, Indigenous Peoples' Rights, Community Rights and Relations, Optimizing Benefits from the Forest, Environmental impact, Management Plan, Monitoring and Assessment, Relation Between Natural Forests and Plantations.

The development of timber industry is influenced by a set of factors in political institutions: degree of political stability, policy climate, laws and regulations, formal policies, infrastructure, ownership of the land, trade restrictions. Government may impose its regulations that largely influence timber industry, such as logging ban or reduction in cutting rights, rules to regulate development of planted forests, regulations limiting landfill and incineration, trade restrictions. Due to political patronage and corruption, liberalization of policy people and companies may be granted concessions for illegal logging, especially it the land is owned by state, thus leading to uncontrolled deforestation. Policy towards doubling gross domestic product may lead to intensification of timber industry. Although level of infrastructure influences just the opposite: an underdeveloped infrastructure, not very good business environment and rapidly increasing production input costs result in worse level of wood harvesting.

Economic factors also influence timber industry - economic growth rate, transportation, taxes, and unemployment. World economic crisis leads to the decrease in timber industry due to the decrease of construction volumes, but when financial crisis ends, rise in exports starts once again which leads to rapid depletion of commercial timber stocks and widespread environmental degradation. Rising transportation costs result in higher end price for timber. Increasing processing within the country would raise export revenues and create jobs.

Factors of social sphere include employment and income statistics, population growth rate, general attitudes - have and impact on timber industry. Unemployment and dependence on forest by indigenous people may lead to conflict with companies that start to operate in the area where these people live. Besides that, unemployed people living in this area may start illegal logging. Population growth rate may also influence timber industry, resulting in construction boom and consumption of timber products. But environmental campaigns and public opinion may change attitude of corporate companies to the usage of wood production.

Technological factors include rate of technological progress and research, development activities and new materials, technical facilities and infrastructure. Modern processing equipment usually results in more intensified timber processing. Appearance of new products-substitutes, such as rubber wood, recycling would decrease the volume of harvested wood.

Timber industry in each area collides with its own problems as a result of current situation setting objectives for each region. Main objective of European and North American timber industry is to increase the productivity of the forest and of industry. In Latin America it is vital to put still virgin forest under management, to bring it in conjunction with land settlement and development. The main objective in Near East timber industry is to improve the areas of forest that were devastated in the past through new plantations. Development of silviculture and less utilization and industry is needed in Far East.

The current situation sets a number of challenges for the forest sector in Russia. First of all, illegal logging that threatens forest resources and especially boreal forests in Eastern Siberian, North European and Far Eastern territories that play a vital role in mitigation of global warming. Other challenges include saving a unique biomass and indigenous people who largely depend on forest resources. Besides that Russia is faced with common timber industry challenges - pollution of atmosphere due to timber plants activity.

What can be done as a successful response to the challenges now is introducing system of certification and labeling, new investment in processing equipment, involving local communities in forest relations, converse to biomass power energy and recycling, re-use of timber, observing deforestation and improving the forest inventory system. Also strong state control should be present in timber industry.

Although nowadays Russia is rich in forest resources, intensified use can lead to depletion of forest resources. In this case establishment of wood plantations and using alternative sources of wood may help.


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