Medium timber supply strong but will fall off a 'cliff edge' after 2035

If Irish forestry continues with a business-as-usual approach, the sector faces 3,828 full-time equivalent (FTE) job losses by 2040 (Table 1).

“This will have a knock-on reduction of €399m to the annual economy,” maintains Henry Phillips, forestry consultant, in a report commissioned by the Social, Economic and Environmental Forestry Association (SEEFA).

“A major contributory factor has been the collapse of the afforestation programme, amounting to 52,000ha since 2010,” he explains.

Conversely, short-term timber production forecasts are positive based on log supply data supplied by the Department of Agriculture, Food and the Marine to the Irish Farmers Journal last week.

We asked the Department to break down log supply annually (Table 2) to reflect the harvesting schedule of licence applicants over the duration of the felling licence period, which is 10 years.

This information is important because up to now, the Department provided bulk volumes for total licences issued annually, which amount to approximately 9m m3 in recent years.

However, this data provides no indication of when these volumes would reach the market as they are spread over a period ranging from one to 10 years and more if applicants decided to avail of a five-year felling licence extension. Now, the breakdown of when applicants are likely to thin and/or clearfell their forests provides much more realistic data on a year-by-year basis.

Table 2 shows that forest owners with licences, schedule 33% of their harvesting on the year of licence approval which means that, in theory, at least 3.1m m3 should be available for sale now.

If the buildup of previous year’s licences and Coillte’s annual production (2.8m m3) is added, there should be up at least 6m m3 of logs available this year.

All of this data presupposes that forest owners with felling licences are prepared to sell. While it is understandable that many will hold out for better prices for clearfells as the large sawlog market is static, there is no excuse at the moment for not thinning.

At least 40% of total volumes provided by the Department comprises thinnings which have ready energy, wood-based panel (WBP) and fencing markets.

A number of steps need to be taken to increase wood mobilisation not least the publication of up-to-date log prices by size category on at least a monthly basis.

The confidential wood price quarterly (WPQ) initiative by the Irish Timber Growers Association and UCD needs support from the sector.

Readers who have sold or purchased timber should submit prices in the standard roundwood sales data form, which can be obtained from UCD (email: roundwooddatabase@ucd.ie).

Ireland is fortunate to have strong and competitive sawmilling, WBP and energy outlets.

These have traditionally paid prices in excess of their UK and European counterparts. It’s now time for forest owners to test these market and activate their felling licences.

In addition, if more private sector licences are activated, it would reduce and eventually remove our dependence on log imports and the threat of bark beetle damage to our forests.

The current healthy log supply is built on large-scale afforestation, especially by the State and major planting programmes by the private sector – mainly farmers – since the early 1990s.

It is also a result of a sustained yield forestry policy, which ensures the equilibrium between felling and planting.

However, that policy is now under threat, as long-term forecasts show that production after 2035 will fall off a “cliff edge” because of rapidly declining afforestation as the Henry Phillips study shows.

Creating a balanced forestry programme will not be achieved by abandoning productive forestry or persisting with a business-as-usual approach, maintains Phillips. The afforestation targets expected by the Climate Change Advisory Council and by successive climate action plans need the guidance and leadership of an independent forestry development agency (FDA).

Phillips calls for the establishment of an FDA to bring Irish forestry back from the post 2035 cliff edge. It is a call worth heeding.

The recent study by Henry Phillips, forecasts major reductions in the forestry economy, job losses and a major shortfall in timber production if current forestry policy continues. This has led to a reduction in annual afforestation to 2,200 including only 800ha of productive forests – the lowest levels of commercial forestry in the history of the State.

“If Irish forestry continues with a business-as- usual approach, the sector faces 3,828 job losses by 2040 (Table 1), Phillips maintains, in his report Impact of Forest Policy and Forest Regulations on Future Commercial Timber Supply and the Sustainability of Timber Processing.

“This will have a knock-on reduction of €399m to the annual economy,” he says.

“The collapse in the afforestation programme since 2010, combined with a future significant loss in the commercial productive area of mainly spruce forests, will result in a reduction in future timber supply of sawlog and pulpwood material of 18.7m m3 by 2040 if current afforestation levels do not improve,” Phillips says.

Current policy

“Current forest policy is short-sighted, ignoring the long-term impacts on rural employment and the timber processing sector,” he adds.

Timber processors will not invest in new and replacement technology as production will fall off a cliff around 2035

“This policy is seriously flawed as it has not taken account of the medium- to long-term impacts on employment, timber supply and the development of the processing sector.

“Timber processors will not invest in new and replacement technology as production will fall off a cliff around 2035,” he maintains.

Phillips is basing his data on current and recent afforestation programmes. The current forest policy which commits future afforestation to at least 50% native species, along with depressed commercial planting due to increased regulatory framework, are contributing to a major reduction in production forestry.

“Add in setbacks, site and soil restrictions and small planting lots – now less than 7ha”, he sees little or no opportunity for the timber processing sector to expand as the overall sector is regressing.

He says it is impossible to see the Department responding to this crisis in its present format and stresses the need “for an independent forestry development agency (FDA) to lead the sector”.

Timber production in the short- to medium-term is strong according to recent felling licence data issued by the Department.

While bulk annual felling licences have been approved for approximately 9m m3 of logs over a 10-year licensing period, it has been difficult to translate this into annual availability of logs.

Now, the Department has taken all information on indicative felling years by applicants, for thinning and clearfells, and broken them down by predicted harvesting year over the period 2020-2033 (Table 2).

“This table shows the volume and the area of expected felling for approved felling licences received since 2020, as notified by the applicants in their felling licence applications,” said a Department spokesperson.

He said these volumes are in line with the “Coford Roundwood Production Forecast 2016-2035 [which] indicates an upward trend in harvesting in the years ahead”.

It is too early to say if the 9m m3 forecast in 2023 can be maintained in 2024, but licences issued for January (866,909m3) would indicate that this level of approval is achievable.

Table 2 shows a number of trends emerging regarding felling years after licence approval. For example, licence holders in 2022 and 2023 indicated that they planned to harvest 33% of the total volume before the end of the year of application.

Over the following years there is a levelling off in production, while there is a late surge in the years before the 10-year licensing period expires. For example, applicants who received licence approval in 2023 indicated that they planned to harvest 2.17m m3 in 2032 and 2033.

So, what volumes can sawmills, board mills, wood energy and other outlets expect to be harvested annually from data released by the Department?

If the 2023 “fell years” for thinning and clearfells are added, 3.05m m3 of logs should be available this year (Table 3) comprising 1.31m m3 thinnings and 1.74m m3 clearfells.

Farmers need the same price transparency and information for their timber as they receive for other produce to encourage them to sell

This may be optimistic, especially for licences approved in the second half of the year but as Table 2 demonstrates, there is a buildup of volumes licensed from previous years, especially 2000-22 as many of these licences have yet to be activated.

Getting these logs to the market is now a major challenge.

Farmers need the same price transparency and information for their timber as they receive for other produce, as recorded in this paper, to encourage them to sell.

Other issues such as certification need to be addressed as sawmills are restricted to 30% of their intake from uncertified forests.