Impact of sanctions on Russian logging industry – Williams Lake Tribune
With news of Russia’s invasion of Ukraine, I thought it might be interesting to see what sanctions might be possible against the Russian logging industry.
As described in France 24, Russia is home to a fifth of the world’s forest and exploiting this resource further could help the country reduce its economic dependence on oil and gas.
Hydrocarbons represent half of Russian exports by volume, while wood and its derived materials represent around 3%. Increasing exports of forest products could help Russia improve its environmental image, as wood is a much greener building material than concrete, which releases a lot of carbon into the atmosphere during its production. The trees can be replaced, although environmental groups are skeptical of Russia’s record on this front.
According to an article in Fastmarkets, “Russia has 20% of the world’s trees and only harvests 30% of its designated ‘production forests’, and there is potential through genetic engineering to increase its sustainable harvest volumes by a factor of 10.”
“It would put Russia’s productivity on a par with that of Finland with its much smaller land base. Russia produces the highest quality softwood (especially Angara pine and spruce) and birch hardwood in the world.
“The Russian government foresees an increase in exports by 2030 of: 70% lumber, 60% plywood, more than 130% particle board, more than 300% MDF, more than 3000% OSB, and more than 500 percent pulp.
If they realize even a modest part of these increases, Russian wood products will hit the shores of all existing customers of all American and European wood manufacturers within the next five to ten years, or even longer. early.
Russia (and foreign companies) have already spent billions on modern sawmills and new plywood and composite panels (PB, MDF and OSB) factories – along with many other factories “the largest and most advanced in the world under construction or on the drawing boards.
A good example is a new factory launched by Segezha which launched the first factory in Russia to manufacture cross-laminated timber (CLT) panels which, thanks to the layers of wood glued at right angles, are rigid enough to build on several floors. . buildings.
Using CLT for buildings is growing in popularity in Europe but remains a niche market in Russia, where companies hope it will be approved by regulators in the coming months. In the meantime, Segezha hopes to increase its exports to Germany, Austria, Italy and Japan.
As is the case in British Columbia, Russia is concerned about the loss of local jobs due to massive exports of logs and green lumber, particularly to China.
A just-released targeted report titled Russian Log Export Ban 2022 notes that Russia exported 15 million cubic meters of logs in 2020, which accounted for almost 12% of roundwood traded in the world. world.
“Much of this trade could come to a halt next year when a new law proposed by the Russian President will ban the export of high-value softwood logs and hardwood logs from January 1, 2022. The government Russia is also considering new regulations aimed at reducing the export of green softwood lumber.
“This regulation is also expected to come into force in 2022 and aims to improve investment in kilns to produce dried timber for export. Reducing log and green wood exports will likely boost value-added processing in Russia and better control illegal logging.
With enough countries restricting forestry investment and exports to and from Russia, this could have a major impact on the abuser’s economy, which could convince its citizens that a change in leadership is needed.