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This, in turn, can potentially delay the European Green Deal’s momentum
Most of the focus in the past weeks has been on European reliance on Russian fossil fuels and the way this affects the economies on the continent, however, there are other markets where Russia is an important player, chief among them – the wood industry.
At the end of last week, the EU authorities imposed a ban on wood products from Russia and Belarus. Concurrently, Russian authorities made a similar move by prohibiting exports of these products to the European Union until the end of the year in what is becoming an increasingly tough economic and trade war.
The wood product trade ban, however, will likely negatively impact several critical industrial supply chains, for example, food and medicine, which are logistically based on wooden pallets. Many wood-based construction materials, such as birch plywood and sawn timber, will be very hard hit, which in turn could hamper the EU’s Green Deal push to decarbonise the built environment and construction sector with organic materials.
Sweden, as a major producer of timber and wood products, is one country in the EU that is not concerned about the severing of trade links. Its annual production of sawn timber rounds up to 18-19 million cubic metres meaning that at least locally there won’t be any shortages.
However, the impact on the European market may be greater. Europe, as a whole, imports 5-10 million cubic metres annually from Russia and Belarus. Imports, which are now expected to decrease significantly or cease entirely.
According to official statistics, slightly less than 10% of the sawn softwood consumed in Europe in 2021 originated from Russia, Belarus and Ukraine. In the hardwood sector, oak goods originating from Ukraine made up a significant quantity. Shortages are therefore expected.
“We see that competition for the wood products available on the European market may increase. At the same time, we follow how the conditions for the transport sector develop with rising energy prices and the logistics challenge in the rest of the world. There is a risk that a previously pressured situation will get worse,” explained Christian Nielsen, market analyst for the Swedish wood industry.
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