Key changes in the timber industry over 10 years

Over the past ten years, the Russian timber industry has undergone significant changes, reflecting trends in the economy and technological development. 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.

However, the industry has faced challenges related to the disruption of supply chains during the global pandemic, the pressure of sanctions over the past year and a half, increased attention to climate change issues and the implementation of strict standards in forestry activities.

For the #RussianForest10Years section, dedicated to the tenth anniversary of the National Association of Timber Industry "Russian Forest", we have compiled a digest of key changes in the industry over the past decade.

Whitewashing the industry

At the end of 2020, with the aim of decriminalization, the reform of the forestry complex in Russia began. 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”. Now our country has ensured traceability of wood in the information system from the place of harvesting to production, processing or export consignments at customs points.
Active work is underway to digitalize the industry, which is planned to be completed by 2025. The FSIS LC system has already been implemented and is operating. All this should make the industry transparent.

Ban on the export of round timber - development of deep processing and development of the domestic market

On January 1, 2022, a ban on the export of unprocessed softwood and valuable hardwood came into force. In these conditions, the domestic market is considered by lumber producers as one of the main directions for selling products.
Based on the results of the first eight months of 2023, the forestry industry demonstrates sustainability thanks to a fairly successful transformation of work. The lag from last year is 7%: in the period from January to August 2023, 112.9 million m³ were already harvested, in 2022 this figure was 121.3 million m³. If the gap closes at the same pace, by the end of the year we can predict the volume of wood harvesting in the region of 200 million m³.

Development of new areas of deep processing - OSB, CLT, pellets

Over the course of a decade, the Russian Federation created its own production of OSB boards from scratch. The first enterprise appeared in 2012, and already 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 thousand 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 was opened in 2021 by the forestry group of companies Segezha Group - 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).
In September, the Basis company (a member of the Russian Forest association) presented a priority investment project - the creation of a new production facility for the production of OSB boards, lumber and pellets in the city of Lesosibirsk, Krasnoyarsk Territory. The total investment amount will be 8.5 billion rubles.
In August 2023, a new workshop for the production of fuel pellets was opened in the city of Bratsk, Irkutsk region, as part of an investment project. The volume of investments is 2.37 billion rubles. The investment project “Development of full-cycle woodworking production in Bratsk” is being implemented by the DeKom company (a member of the Russian Forest association). With the launch of the workshop, the DeKom enterprise will be able to produce up to 96 thousand tons of pellets per year.
Large-scale work is underway throughout the country aimed at converting boiler houses to biofuel. The Ministry of Construction of the Russian Federation and the Ministry of Energy of the Russian Federation are developing amendments to laws on the priority of using local types of fuel in the regions (for example, wood waste and fuel pellets) for heating cities. The Komi Republic has already announced that it intends to increase the share of boiler houses using biofuel to 83%.

Development of wooden housing construction

In 2022, the number of wooden houses in individual housing construction for the first time exceeded the number of houses built from other materials. If 79.9 thousand houses were built from brick, 40.7 thousand from cement blocks, then 126.4 thousand residential buildings were built from wood in Russia.
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.
Regions continue to develop their programs: for example, in the fall of 2023, the concept of the interregional program “Development of wooden housing construction in the Siberian Federal District until 2035” was presented by the governor of the Irkutsk region, Igor Kobzev.
Segezha Group and the Irkutsk region will develop modern wooden housing construction: one of the largest agreements in the industry was signed by the President of the Segezha Group, Mikhail Shamolin, and the Governor of the Irkutsk Region, Igor Kobzev. The focus is on the development of wooden housing construction in the region. Since 2022, Segezha Group has been building a four-story residential building made of CLT panels in Baikalsk (Irkutsk region).
The Arctic regions of Russia are territories where wooden house-building technologies are especially beneficial, since they not only reduce costs, but also allow them to work effectively in conditions of low temperatures and a short summer period. It is no coincidence that it was in the Arkhangelsk region that a meeting was held on the development of the timber industry, following which the President of the Russian Federation ordered to expand the use of wooden low-rise construction for the resettlement of emergency houses, to increase the production of prefabricated house kits, and also to use wood for the construction of social infrastructure.

Priority projects, logistics, state support under sanctions

Since 2007, a large-scale state program began its work to reorient the timber industry from timber harvesting to its deep processing - a mechanism for priority investment projects for the development of the forestry complex (abbreviated as PIP). Now this is one of the key measures to support the industry.
During the duration of the PIP program, Rosleskhoz approved 280 investment projects for the development of forestry complex, 19 of them this year.
Leader in the number of priority investment projects for the development of the forestry complex in 2022–2023. is the Northwestern Federal District. Eleven of them are aimed at producing structures and materials for wooden house construction: five are being implemented in the Vologda region, three in the Komi Republic, one each in the Arkhangelsk, Novgorod regions and Karelia.
In 2022, Russia developed its own voluntary forest certification system, “Forest Standard,” which is designed to maintain high standards of forest management in the country. 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.
One of the measures of state support for enterprises in the timber industry is the inclusion of companies in the list of systemically important ones. A mechanism for monitoring the status of all organizations from the list has been implemented on the basis of the State Industry Information System (GISP). The mechanism will allow us to identify emerging critical situations and respond to them in a timely manner.
In 2023, to compensate for transportation costs for the supply of all types of forest products, the subsidy limit was increased from 300 to 500 million rubles. These measures are designed to help businesses maintain financial stability. This year, 57 industry companies have already received 6.3 billion rubles. for transportation of timber. The receipt of these subsidies in the summer of 2022 was announced by the Ministry of Industry and Trade of the Russian Federation.