Finnish forestry sector sees accelerated growth in 3Q; future competitiveness hinges on energy costs

Finland’s softwood production accelerated in the July–September period compared to the first half of 2016.

Softwood sawn timber production grew 9.2% in the third quarter to 2.6 million cubic metres. Since beginning this year, forestry companies have produced 6.5% more softwood sawn timber, a total volume reaching 8.4 million cubic metres, compared to the same period last year. However profits fell on lower export prices and higher raw material costs.

The government must ensure that energy and logistics costs are competitive in Finland and that forest policy is used purposefully to increase the supply of wood in response to the strong growth in demand, said Timo Jaatinen, director general of the Finnish Forest Industries Federation.

The forestry sector produces two-thirds of Finland’s renewable energy.

In September, the government submitted a proposal to the parliament on implementing compensation for the costs of emissions trading at a rate of 50% of the maximum allowed by the EU, which would reduce the competitive disadvantage of Finnish industry. Germany, for example, has implemented compensation for the costs of emissions trading at the full rate allowed by the EU. It is important to ensure that the model drafted by the government will not be changed.