A new study by the US Forest Service has found that the USA, Canada and European Union member states could benefit from the Deforestation Regulation adopted by the European Union.
According to information provided by a leading trader in timber, panels and decorative surfaces, the European Union's new deforestation regulation has triggered a rapid influx of cheap, uncertified hardwood timber into the United Kingdom's timber supply chain.
“The EUDR could cut timber imports from high deforestation risk countries (including Indonesia, Malaysia and Brazil) by more than 25% by 2040 – and by as much as 38% if the definitions are changed to include agricultural conversion as well (the so-called EUDR+),” states the report The European Union Deforestation Regulation and its impact on global forestry. It explains that high-risk countries will find it difficult to locate new markets for their timber unless they make use of other mechanisms, such as the European Union's Forest Law Enforcement, Governance and Trade.
A team of researchers led by Craig Johnston (Craig Johnston), Jingang Guo (Jingang Guo) of the Department of Agricultural Economics and Agribusiness at Louisiana State University and Jeffrey Prestemon (Jeffrey Prestemon) of the US Forest Service used the Forest Resource Outlook Model (FOROM) to model the impact of EU forest legislation on production, trade and pricing:
“The results indicate that countries with very intensive logging, such as Brazil, Indonesia and Malaysia, can expect a significant fall in roundwood production and exports, which will in turn affect sawnwood and panel prices. At the same time, in countries with low levels of deforestation, including Canada (up 1.4%) and the United States (up 0.1%), production may rise slightly to meet EU demand.”
The new report compares the impact of the EUDR on wood product supply chains around the world.
The EUDR will bring substantial shifts in production as European Union member states reduce risk
According to the study's figures, Indonesia's roundwood output could fall by as much as 7% under the current EUDR, and by 6.8% under the EUDR+. Indonesian sawnwood production could fall by 1–1.2%, and panel production by 16% and 15.4% respectively. In Malaysia, correspondingly, roundwood production could fall by 8.5% under the EUDR and by 7% under the EUDR+. Finally, Brazil's roundwood production could fall by 7% under the EUDR and by 10.1% under the EUDR+, while sawnwood and panel production could fall by 12.6%.
Although production in high-risk countries could fall, roundwood harvesting in Europe could rise slightly as supply chains become “EUDR-ready”: “Germany's roundwood volumes, for example, are expected to rise by 0.5% under the EUDR and by 1% under the EUDR+, while timber and panel production will change only slightly. Austria, Poland and Latvia may also see small, positive changes.”
A substantial effect on timber price fluctuations
The researchers calculated that Brazilian roundwood prices will fall by 7% and 10.2% under the EUDR and EUDR+ settings respectively, while the prices of finished sawlogs (14.6% and 19.9%) and panels (7.9% and 10.3%) will rise under the new settings. And although prices will fluctuate in high-risk countries, prices in the European Union and North America are expected to remain relatively stable:
“Roundwood prices in Germany, for example, are forecast to rise by 0.5% under the EUDR and by 1% under the EUDR+, while sawlog prices could rise by 0.7% under the EUDR and by 1.1% under the EUDR+. Panel prices in Latvia, meanwhile, will rise by 2.4% under the EUDR and by 2.6% under the EUDR+.” In the United States, “roundwood prices are expected to rise by 0.1% under both the EUDR and the EUDR+, while sawnwood prices could increase by 0.7% and 1.1%. Panel prices are projected to rise by 0.6% under the EUDR and by 1% under the EUDR+”.
ITTO (the International Tropical Timber Organization is an intergovernmental initiative that promotes the sustainable management and conservation of tropical forests, as well as the expansion and diversification of international trade in tropical timber from sustainably managed and legally harvested forest resources) reports that roundwood imports have fallen by more than 60% since African countries introduced new laws restricting trade in unprocessed roundwood.
The new study follows reports that tropical timber imports into Europe have fallen to their lowest level in a decade. Uncertainty surrounding the EUDR, changes to logging rules and excessively high shipping costs have driven imports into the 27 EU member states down to just 726,000 cubic metres, which is the lowest level on record for the International Tropical Timber Organization (IITO).
“In 2024 the EU27 cut its tropical sawnwood imports by 14%, only the second time in history that the European Union's annual tropical sawnwood imports have fallen below 800,000 cubic metres. The only other instance was in 2020, the first year of the pandemic, when imports reached 784,000 cubic metres,” states the ITTO tropical timber market report (16–28 February 2025).