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New Data: Is 40% of Softwood Entering Europe at Risk Under EUDR?

Less than five months before the roll out, European supply chains are still at massive risk as large parts of the supply chain are not "EUDR ready"


Mon 19 Aug 24

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Up to 40% of all softwood entering the EU comes from Ukraine, with 491,000 cubic metres of timber travelling from the war-torn country to European ports via road and sea during the first six months of 2024 alone.

That is according to new data published by Eurostat—the European Union’s statistics bureau—which reports that Ukraine, Norway (32%, or 409,000 cubic metres), and Bosnia and Herzegovina (10.5%, or 133,000 cubic metres) are Europe’s new big three in the wake sanctions imposed on Russia, which together with Switzerland and Canada make up the vast majority of the 1.262 million cubic metres trade into the block.

And when it comes to species, spruce and fir accounted for almost half (48%) of all softwood imports (more than 600,000 cubic metres), which, along with pine (41%, or 521,000 cubic metres), spruce, pine, and fir (SPF) (6% or 73,000 cubic metres) made up the balance of trade.

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The EU’s top import markets for softwood lumber for the first six months of 2024. (Image Credit: Eurostat via Lesprom Network)
Ukraine War Sparks New EUDR Chaos Months Out From Rollout

The new data comes after Wood Central earlier this month revealed that Russia’s invasion of Ukraine is causing major EUDR headaches less than five months before the formal rollout of the new regulations.

In June, Wood Central reported that Ukraine – also Europe’s second-largest timber furniture import market behind China – is scaling up logging and timber production to revive its war-torn economy.

Already, the Zelenskyy administration has introduced policies, including Resolution No. 454, which will ramp up timber processing in the controlled (west). And whilst timber processing made up just 1.2% of Ukraine’s GDP in the years leading up to the war:

“That all changed when the invasion started, with the Ukrainian Government declaring its intention to increase logging in controlled territory.”

Yehor Hrynyk, Andrii Biletskyi, Amanda Cabrejo le Roux, author of a Basel Institute of Governance Report.

According to Svitlana Kuts, the WWF-Ukraine Director, the new policy risks making Ukraine a “high-risk” country as defined under the EUDR’s terms and definitions: “There is a risk that the new regulation will unjustifiably increase felling and corruption in the industry.”

A new report, How Corruption Threatens the Forests of Ukraine: Typology and case studies on corruption and illegal logging, published last year, underscores the challenges the Zelenskyy government faces in cracking down on illegal logging and deforestation in Ukraine's vast forest resources. (Photo Credit: Basel Institute of Governance)
The Zelenskyy government is looking to boost timber production to help rebuild its war-torn economy, however, there are concerns that the EUDR could make it difficult to trade into the third most valuable timber market (Photo Credit: Basel Institute of Governance)

For Yuliya Ovchynnikova, a Ukrainian member of the Alliance for Liberals and Democrats for Europe and a significant opponent of Zelenskyy, the resolution poses a major risk to Ukraine’s trade with the European bloc: “The new EU regulation on deforestation—EUDR—will enter into force next year, and timber harvested in an illegal and unsustainable way will not be allowed on EU markets.”

Are Bosnia and Herzegovina at high risk under EUDR regulation?

Whilst Ukraine remains a headache for policymakers, the heavily forested Bosnia and Herzegovina, inundated by landmines during the 1990s, is far better prepared for EUDR. That is according to the WWF, which has been working with IKEA on A Forest Partnership for Change over the past decade to make swaths of the local timber industry FSC-certified.

The project has seen the EU’s third-largest softwood exporter work with the Ministry of Agriculture, Water Management and Forestry of the Federation of Bosnia and Herzegovina and cantonal ministries of agriculture, water management and forestry to make the industry “EUTR ready” (the precursor to EUDR).

Bosnia is rebuilding its forest economy after years of neglect after the Bosnian war. Footage courtesy of @APArchive.

According to the WWF, “Bosnia and Herzegovina is the first and currently the only country in the region that has developed its FSC Standard.” The certificate guarantees that a particular company manages its forests transparently, in accordance with key international regulations and domestic legislation, including a higher degree of nature protection.

“The partnership has resulted in certification of more than 56,000 hectares of forests in Tuzla Canton and 184,205 hectares in Central Bosnian Canton.”

How the EUDR will work
  • The regulation will assign regions within countries inside and outside the EU a low, standard, or high-risk level associated with deforestation and forest degradation.
  • This risk classification will guide the obligations of various operators and the authorities in member states to perform inspections and controls. Consequently, this will streamline monitoring for high-risk regions and simplify due diligence processes for low-risk regions.
  • Authorities responsible for these areas must inspect 9% of operators and traders dealing with products from high-risk regions, 3% from standard-risk areas, and 1% from low-risk regions. This inspection aims to confirm whether they are effectively meeting the obligations stipulated by the regulation.
  • Further, these competent authorities will inspect 9% of relevant goods and products either placed on their market, made available, or exported by high-risk regions.
  • Lastly, the EU plans to enhance its cooperation with partner countries, focusing primarily on high-risk areas.

For more information on EUDR and its impact on global furniture supply chains, visit Wood Central’s special feature on EUDR and its implications for the European supply chain for timber-based furniture products.

Author

  • Jason Ross

    Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.

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