The impact of directives and regulations on logging costs depends on the scale at which the policies are implemented. Under a high-impact scenario, logging costs could rise by as much as 18% compared with the current level.
The European Union's influence over national forest policy is growing, and the implementation of the forest-related policies proposed by the European Commission will affect forestry practice across Europe. The Nature Restoration Law, for example, sets specific targets for restoring and conserving forest ecosystems; the Deforestation Regulation requires the origin of timber to be tracked closely; and the updated Renewable Energy Directive RED III sets new criteria for the sustainable sourcing of forest biomass.
A scenario-based approach
To date, no study has examined the impact of these policies from the point of view of economics and forestry operations. This study first carried out a structural systems analysis in order to identify the relevant variables and how they behave in relation to roundwood harvesting and the operating environment; a scenario-based approach was then used to represent the potential levels at which EU forest-related policies might be implemented. Finally, using the various scenarios – low, medium and high impact – together with the systems analysis, the effect of different levels of policy implementation on logging costs was quantified, expressed in euros per cubic metre.
The results indicate that under the low and moderate impact scenarios, logging costs in three different regions of Finland would rise by less than 10% compared with the current level. An increase of this size – less than 10% – could be absorbed over a few years, but a sudden rise would be likely to create difficulties for companies seeking to improve their operations. Under the high-impact scenario, logging costs would rise by 15–18% depending on the region. An increase of that order, roughly one sixth, corresponds to serious changes in timber harvesting and in the operating environment.
The European Union has no common, comprehensive, statutory forest policy
Forest policy is a competence of the member states; nevertheless, Europe does have a forest strategy and, more importantly, the forest sector is affected by several EU sectoral policies – such as climate, energy, environment and agriculture policy – which fall within the EU's supranational competence. Historically, European forest policy can be divided into three periods: emergence, 1958–1960; expansion, from 1970 to the late 1990s; and stabilisation, from the late 1990s to the present. It can be argued that a second phase of expansion is under way today.
The current European Green Deal and its associated documents make forest conservation, forest restoration and afforestation priorities – that is, ways of tackling two global crises simultaneously: climate change and the loss of biodiversity. The contribution of forests as carbon sinks to climate change mitigation was already emphasised in the 2030 Climate and Energy Framework. In addition, the regulatory framework for accounting for the role of forests in meeting climate targets, together with national forest reference levels and legally binding targets for the land-use sector, was set out in the EU Land Use, Land Use Change and Forestry (LULUCF) Regulation.
More recently, the European Climate Law and the proposals in the Commission's "Fit for 55" legislative package – such as the revision of the LULUCF Regulation – have placed still greater emphasis on the need to promote carbon removals in forests and to maintain and increase the carbon stocks held in them.
In the Green Deal and its underpinning document, the EU Biodiversity Strategy for 2030, the biodiversity targets are closely tied to the EU's climate targets. Many of the forest-related policy proposals published by the Commission between 2020 and 2023 give prominent expression to the aims of the Biodiversity Strategy, such as preventing adverse effects on biodiversity, soil, and forest health and productivity. There is an evident shift from voluntary measures to legally binding regulation.
The new EU Forest Strategy aims to strengthen forest conservation in line with the goals of the Biodiversity Strategy while at the same time promoting sustainable forest management in the European Union. Alongside promoting the cascading use and circular economy principles and introducing the concept of closer-to-nature forest management and an associated certification scheme, the Forest Strategy seeks to establish a new European definition of sustainable forest management.
Proposals to revise existing legislation
In order to deliver the strategies in which these aims are set out, the Commission has published a number of proposals to revise existing legislation and introduce new legislation that will affect forestry. First, the proposal for a Nature Restoration Law sets targets for the restoration of the ecosystems listed in the Habitats Directive, for the volume of deadwood, for the extent of continuous cover forestry, for forest connectivity, for the common forest bird index and for the amount of organic carbon in forests. Second, the revision of the Renewable Energy Directive RED III tightens the sustainability criteria for forest biomass, for example by restricting harvesting on sensitive soils and the removal of deadwood, and by limiting the extent of clear-felling.
In addition to increasing the time required for the actual harvesting operations, these requirements may raise logging costs, because harvesting sites have to be planned in greater detail, operations have to be monitored, and the administrative work associated with the requirements has to be carried out. Finally, the EU Deforestation Regulation sets targets on a number of matters, such as the traceability of harvesting operations, that is, geolocation reporting, which requires the precise coordinates of the particular operation, linking the site and the felled, unprocessed timber to the end products made from that timber.