10 trends in the timber industry for the 10th anniversary of the Russian Timber Association
On November 13, 2023, the National Association of Timber Industry “Russian Forest” turned 10 years old. Over the years, the Association has become a significant institution participating in the development of dialogue between business, government and society. The Association takes part in improving regulatory legal acts in the forestry sector, developing measures to support the industry, protecting the rights and legitimate interests of participants and promoting the principles of responsible forest management.
For the 10th anniversary of the Russian Forest Association, we have collected ten key trends that have influenced the forest industry over the past decade, and which will continue to shape it in the coming years.
1. Whitewashing the industry
The reform of the forestry sector with the aim of decriminalizing it began in Russia at the end of 2020. This was the result of three years of work by the National Forestry Forum under the auspices of the State Duma, with the participation of the National Association of Timber Industry “Russian Forest”.
Today, Russia has ensured traceability of wood in the information system from the place of procurement to production, processing or export consignments at customs points.
2. Ban on export of unprocessed wood
In September 2020, the President of the Russian Federation ordered, from January 1, 2022, to ban the export from Russia of unprocessed or roughly processed coniferous and valuable deciduous wood.
In the new conditions, lumber producers began to consider the domestic market as one of the main directions for selling their products, and the number of projects related to advanced wood processing has also increased.
3. Priority investment projects
On February 23, 2018, Resolution No. 190 of the Government of the Russian Federation was signed, which approved new rules for the operation of priority investment projects for the development of the forestry complex (abbreviated as PIP). This is one of the key measures to support the timber industry, in force since 2007. Its main goal is to reorient business from logging to the production of advanced wood processing products with a high share of added value, as well as increasing import substitution, effective development of forest areas and creating new jobs.
During the duration of the PIP program, Rosleskhoz approved 280 investment projects for the development of forestry complex, 19 of them this year. The Russian Timber Association has accumulated significant experience in implementing priority investment projects; now, with its participation, two investment projects are being implemented:
- The StarWood company is implementing the project “Creation of a timber processing plant in the city of Ust-Kut, Irkutsk Region” (included in the list of priorities by order of the Ministry of Industry and Trade of Russia dated 02/08/2022 No. 324). The project provides for the creation of a new production facility with a total investment of 4.5 billion rubles. The planned annual production volume is 625,000 m3 of lumber, processing waste will allow the production of 160,000 tons of pellets, and 1,100 new jobs will be created.
- The Basis company is implementing the project “Creation of a timber processing plant in the city of Lesosibirsk, Krasnoyarsk Territory” (included in the list of priorities by order of the Ministry of Industry and Trade of Russia dated 04/07/2023 No. 1253). The project provides for the creation of a new production with a total investment volume
RUB 8.5 billion The planned annual production volume is 660,000 m3 of lumber and 300,000 m3 of OSB boards. Recycling of production waste is also provided
with the production of 180,000 tons of pellets and 70,000 m3 of charcoal. 1,300 new jobs will be created.
In September 2022, new reforestation rules came into force: the terminology has changed, new responsibilities have been added, and the deadlines for fulfilling mandatory requirements have shifted. With changes in legislation and economic behavior of industry participants, technology has also changed. New equipment is being developed that can grow seedlings and seedlings in a shorter period of time.
One of the most popular modern reforestation technologies is the use of planting material with a closed root system (CRS). Its advantages are lower seed consumption compared to other growing technologies, obtaining standard planting material in one growing season and the ability to plant throughout this entire period.
Members of the Russian Timber association make their contribution to forest restoration. A tree nursery in the city of Angarsk, Irkutsk region, grows coniferous seedlings with a closed root system (CRS). Current production volume is 5 million seedlings per year with the possibility of increasing to 15 million.
High quality of seedlings is achieved primarily through strict implementation of the technological process and systematic implementation of the entire complex of agrotechnical measures. The required seedling standards are achieved through the use of the most modern high-tech equipment, which allows semi-automatic control of air and soil humidity, as well as temperature.
5. Development of new areas of deep processing
Over the past decade, Russia has created its own production of OSB boards from scratch. The first enterprise appeared in 2012, and at the end of 2016, the STOD company (Tver region) launched the largest OSB production in Russia - the Talion Arbor plant with a capacity of 500,000 m3 per year.
Also a new direction has become the production of CLT panels - cross-glued wooden panels made from softwood and hardwood lumber. The first large-scale CLT plant in 2021 was opened by the Segezha Group timber industry group of companies - the Sokol CLT plant in the Vologda region. Already in February 2022, the Ministry of Construction of the Russian Federation allowed the use of CLT panels in the construction of buildings up to 28 meters high. And in August 2023, a housing complex made of CLT panels was included in Circularity Concepts in Wood Construction 2023 - a collection of research results on the possibilities of organizing closed-loop production in the field of wooden housing construction, published by the United Nations Economic Commission for Europe (UNECE).
6. Development of wooden house construction
The reduction in timber exports from Russia has spurred the industry to more actively develop the domestic market for the consumption of timber products. The development of wooden house construction is one of the key areas of the strategy for the development of the Russian forestry complex until 2030. As part of the implementation of this direction, in July 2022, a road map for the development of wooden housing construction was approved, and the action plan was approved by the Ministry of Construction and the Ministry of Emergency Situations of Russia.
In November 2022, a state program was launched to subsidize the production of wooden house kits worth up to 3.5 million rubles. Manufacturers give a 10% discount when selling house kits and receive a subsidy of the appropriate amount from the state.
At the end of 2022, the number of wooden houses in individual housing construction for the first time exceeded the number of houses built from other materials. Along with the development of the individual housing construction market, the government intends to stimulate the construction of social facilities made of wood.
In October 2023, the Government of the Russian Federation supported three bills on the development of wooden housing construction, prepared by the Ministry of Construction of the Russian Federation. Their adoption will protect citizens from unscrupulous contractors, reduce the cost of individual housing construction and increase the construction of wooden houses.
Digitalization and the introduction of modern technologies in logging processes have led to an increase in labor productivity and a reduction in environmental impact. The effective use of geographic information systems has made it possible to more accurately plan deforestation and conduct sustainable forestry.
Active work on digitalization of the industry is being carried out not only by the business itself, but also at the state level. Rosleskhoz has developed and is gradually implementing a federal state information system for the forestry complex (FSIS LC), which will make forestry as transparent as possible through improved control over the turnover of wood. The system supports processing, storage and generation of more than 30 types of data.
8. Voluntary certification
In 2020, Russia took first place in the world in the number of voluntarily certified forests (at that moment - under the FSC scheme, Forest Stewardship Council, Forest Stewardship Council). With a record area of 52.45 million hectares of certified forests, Russia has overtaken the long-time leader, Canada.
In 2022, Russia developed and implemented its own system of voluntary forest certification - “Forest Standard”. In the first year alone, the company issued 250 certificates in 47 regions of the Russian Federation and Belarus.
Also in 2022, the Russian Federation introduced its own certification system for wood fuel pellets - “Eco+”, developed taking into account the experience accumulated since 2013.
9. Forest climate projects and the carbon market
In 2020, the transition to a new carbon regulation system began, which allows reducing the carbon footprint of economic activities through the creation of climate projects.
In 2021, the Strategy for socio-economic development with low greenhouse gas emissions until 2050 was approved, and the law on limiting greenhouse gas emissions also came into force. Since 2021, a climate experiment has been launched on Sakhalin, and in 2022, the Ministry of Economic Development of the Russian Federation approved the criteria and procedure for classifying projects as climate projects. Mandatory carbon reporting is being introduced for the largest issuers.
Russia accounts for 20% of the world's forests, which absorb about 700 million tons of CO₂ equivalent per year. Forest climate projects aim to store carbon in forests, thereby reducing its impact on warming the planet's atmosphere and, therefore, climate change.
In September 2023, information about the first forest-climate project that was independently verified for compliance with legal standards was entered into the Russian register of carbon units. This is a project in the Sakhalin region, the implementation of which should ensure the absorption of 1.5 million tons of greenhouse gases over the next 75 years.
10. Development of specialized training
Education has always been the cornerstone for the development of any industry, and the forestry industry is no exception. This year, within the framework of the federal educational project “Professionality”, educational and production clusters have already opened and continue to open in different parts of Russia, in which new educational programs are being introduced, including in the field of the forestry complex
Colleges being modernized on a turnkey basis are guided by an industry-specific training model to meet the needs of industry-specific labor markets and specific enterprises. For this purpose, educational institutions and timber industry enterprises sign partnership agreements on personnel training.
The Russian Timber Association also tries to support and develop educational projects. This year, the “Russian Timber” became part of the scientific consortium “Yakut Model Forest” in partnership with the Arctic State Agrotechnological University, Voronezh State Forestry University, the Institute of Permafrost Science of the SB RAS IMZ, the Almas forestry complex and the Lestekh Association.