Kevin Mason
Rising inflation and interest rates are getting a lot of press lately for good reason, but one specific force hitting all our companies is skyrocketing diesel prices. Commentary suggests the worst is yet to come, especially as refining capacity has been targeted in various war zones. According to a recent Doomberg article, “It is now certain that a full-blown and extended global diesel emergency is unavoidable, and the only questions remaining are those of degree and fallout.” High diesel prices hurt companies from the start of the supply chain (harvesting) through to delivery of the final product. Companies across our coverage universe have called out diesel and freight-based headwinds on earnings calls and in investor presentations… most notably, Smurfit Westrock.
The reality is that US has plenty of diesel, but prices are rising due to actions in the global market. As such, US prices could be capped, and likely reduced, if the Administration halts/reduces diesel exports. That would be beneficial for many US companies/consumers, but would leave Europeans in the lurch. Given the upcoming mid-terms, it isn’t a stretch to see an export reduction, but problems would spread rapidly around the globe as the U.S. is currently the world’s largest diesel exporter. Does the U.S. share the pain or “export” the pain to others? We think the odds are on the latter. Forestry contractors around the globe are pushing for government intervention, ranging from tax relief to additional grants or supports. A swift response is needed.
Canada and the European Union are laying out concrete steps to strengthen ties around digital security, critical resources and a would-be fleet of Canadian water bombers, according to a draft joint statement ahead of a major summit at month’s end. The document states that Ottawa and Brussels aim to let Canadian companies bid on cloud and artificial intelligence infrastructure contracts typically reserved for European companies in another push away from dependence on the United States. Dubbed an “alliance for the future,” the renewed partnership also launches plans for Canada to join in Europe’s Galileo satellite navigation system and wraps up a deal to facilitate European investment in Canadian critical minerals. It further announces the joint purchase of 50 Canadian-made De Havilland water bombers it claims will be ready for use in fighting wildfires in 2030. …The challenge lies in fending off backlash from the White House, said professor Patrick Leblond. 
Western red cedar, resawn and kiln-dried in New Zealand and on its way to American lumberyards, is now before the US Court of International Trade, with a New Hampshire distributor challenging a customs finding that it evaded the duties charged on Canadian softwood. That is 
Coastal Specialty Forest Products has 
The US and China reached new trade and investment arrangements during President Xi Jinping’s September 2026 state visit to Washington, including the relaxation of tariffs affecting lumber and other wood products exported from the US to China. …According to a September 25, 2026 
US Customs and Border Protection agents spent four days investigating Auckland timber processor Hermpac after a complaint from the US Lumber Coalition. The finding was uncomfortable. A wholesaler on America’s east coast had been routing Canadian-origin wood through New Zealand for processing before shipping it into the US. …The purpose, according to the investigation, was to dodge the punishing duties the US imposes on Canadian softwood lumber. This is the first confirmed case of a New Zealand processor being directly investigated by US Customs in connection with the Trump-era tariff regime. …The fight is no longer just about headline rates. It is now about who inspects your paperwork, and whether the value you add in New Zealand counts. …The practical takeaway is unglamorous but urgent. Review and document your origin classifications now, before a competitor files a complaint, not after Customs agents turn up.
CHINA — Century Sunshine is building a new pulp mill in Rizhao, Shandong province, China, with key technology delivered by Valmet. The mill is designed for an annual capacity of 1.2 million tonnes of hardwood or softwood pulp and 400,000 tonnes of softwood pulp. The delivery includes two parallel cooking and fiberlines – one Valmet Continuous Cooking swing line producing bleached softwood or hardwood pulp, and another producing bleached softwood pulp for fluff and dissolving pulp. …The mill will produce fluff, dissolving, softwood and hardwood pulp. The project forms part of Century Sunshine’s three-phase “Paper-for-Plastic” investment program, which targets 2.65 million tonnes of annual new paper production. Startup is expected in June 2028. …Century Sunshine Pulp and Paper is part of the Century Sunshine Paper Group in Weifang, Shandong Province, China. 
ROSENTHAL, Germany —During the restart process following a four-week maintenance shutdown, the plant received a report on October 1, 2026, regarding discoloration in the vicinity of the wastewater discharge point. As a precautionary measure to rule out any adverse effects on the environment and water bodies, the company immediately halted the restart process and the wastewater discharge, retaining the wastewater in the plant’s own buffer basins. The Saale-Orla District Office subsequently issued a temporary swimming ban for the southern section of the Bleiloch Reservoir as a precaution. Since the wastewater discharge was suspended on Thursday, the company has been in constant direct communication with the relevant authorities. On this basis, discharge from the plant’s own wastewater treatment facility into the Saale River was gradually resumed on October 3 in close coordination with the relevant environmental authorities. At the same time, preparations are underway to resume pulp production. [END]
Used cooking oil and crude tall oil originate in different industries, but renewable fuel production connects their commercial value. As demand for suitable feedstocks changes, signals from the used cooking oil market can help explain pricing pressure reaching forest-derived materials. That connection gives tall oil a broader market context. Its value reflects demand from established chemical applications and its role in renewable fuel supply chains. Changes in fuel economics can influence that balance, even when conditions in pulp markets remain relatively steady. 
A US diesel export ban could become a self-defeating exercise that would do little to ease high US fuel prices but could worsen supply and economic disruptions around the globe, analysts said. US President Donald reportedly said on Tuesday he backed the idea of a ban. Average US diesel prices have jumped to a record $6.5107 a gallon. Diesel is critical to the global economy because it powers transportation, farm equipment and the machinery used to make and move goods. High fuel prices stoke inflation — already a pain point for Trump and Republicans. …”Given that a surplus of diesel in the US could paradoxically force American refiners to cut supplies of oil products – potentially within a few weeks – a ban would ultimately be self-defeating,” Capital Economics said in a note. Restricting US diesel exports would wreak havoc on fuel markets in the US and abroad.
Business registrations in Russia’s forestry and logging sector fell sharply in the first eight months of 2026 while liquidations increased, according to Rusprofile calculations reported by Kommersant. …Russia recorded 1,210 new registrations of companies and sole traders in forestry and logging during January–August 2026, down 19.9% from the corresponding period, according to calculations by business-information service Rusprofile cited by Kommersant. Over the same eight months, 1,590 liquidations were recorded, an increase of 9.6%. That left liquidations 380 above registrations. Rusprofile calculated that the number of businesses closing was 31.3% higher than the number entering the sector.
UK residential construction remains in a slump, with the value of started projects 33% lower than the same period last year, according to new data from Glenigan. The value of started projects fell 8% in the three months to the end of September 2026, the construction experts found. The figures, published in the October 2026 edition of the Glenigan Construction Index, show weakness continuing across the housing market despite growing government ambitions to increase housebuilding. The index tracks underlying construction projects valued at £100m or less, unless otherwise stated. The residential figures underline the gap between the government’s housebuilding ambitions and the number of schemes actually getting under way. …Overall construction activity also remained subdued. The value of underlying projects starting on site fell 2% against the preceding three months and was 18% below the level seen a year earlier.
UK — Demand in softwood markets remains patchy at best, and an overall weakness in the market predominates leading merchants to adopt an ultra-cautious approach. Now that the Scandinavian mills are back in production after the summer holidays, their attention is focused on which markets will be able to absorb their productions. With UK demand on the back foot, importers and are concerned that the Swedes may try to squeeze unwanted volumes into the UK with price inducements. If this happens, and an excess of softwood arrives, it can only result in another self-destructing price war. …To mitigate the effects of low demand, some sawmilling groups are reducing production. …Sawmillers Holmen have announced reduced output for their Linghem mill in Sweden, Stora-Enso is discussing permanent closure of the Veitsiluoto unit in Finland, and there has been an overall drop in production among German softwood producers. …Further afield, curtailments are spreading across the US and Canada.
An analysis originally published by Austria’s Landwirtschaftskammer Kärnten says Europe’s timber industry continues to face weak construction activity, high financing costs and subdued demand. Global Wood’s English-language report says… The European timber industry is facing a prolonged period of consolidation as weak construction activity, industrial recession and higher financing costs continue to pressure the sector. The outlook was discussed at International Wood Day in Klagenfurt, Austria, where around 300 industry leaders and experts gathered. Raiffeisenbank International chief economist Gunter Deuber said Germany’s continued industrial weakness is affecting Central European sawmills, panel manufacturers and timber construction companies, with building permits remaining at historically low levels. High household savings and cautious spending are also limiting residential construction, while stricter lending conditions and elevated construction costs are delaying projects. Although interest rates have fallen, financing remains more expensive than before 2022. 
New housing starts in England rose sharply in the second quarter of 2026. This came even as the number of homes granted planning permission continued to decline, according to figures published Thursday by the Ministry of Housing, Communities and Local Government (MHCLG). Builders started work on 35,910 new dwellings between April and June. That was a seasonally adjusted 6% increase on the first quarter and 20% higher than the same period last year, the department’s “Housing Supply: Indicators of New Supply” release showed. Completions, however, fell to 35,800, down 3% quarter-on-quarter, though still 1% above a year earlier. Over the same period, permission was granted for 212,000 homes in the year to June 30. That was a 12% drop from the 242,000 approved a year earlier, according to provisional figures MHCLG compiled with contractor Glenigan. …MHCLG estimates 196,900 net additional homes were delivered in England in 2025-26. That was a 6% fall from the previous year. 
Developing formaldehyde-free and high-performance wood adhesives is imperative for sustainable wood utilization. To overcome performance trade-offs in lignin adhesives, we developed a formaldehyde-free aqueous adhesive formulation via reactive cysteine-functionalized lignin, achieving high performance with an unprecedentedly low lignin loading (20 wt %), which is sprayable and injectable and exhibits excellent fluidity. It undergoes self-curing via forming amide bond, achieving robust bonding performance under simple hot-pressing conditions. The solvent-free lignin adhesive for plywood outperforms commercial resins, demonstrating exceptional dry strength (4.0 MPa), high wet-strength retention (83.7%), and superior durability against extreme temperatures (−196° to 190°C), humid heat aging, and solvents. …This work establishes an environmentally friendly and scalable strategy for constructing full bio-based adhesives with exceptional processability and durability, providing a paradigm for lignin valorization within lignin-first biorefinery frameworks.
SINGAPORE – Asia Pulp & Paper (APP) has been issued a Notice of Temporary Restrictions on its green label by the Singapore Environment Council (SEC) as fires from its suppliers’ land have been causing the current haze in the region. Under this notice, APP is subjected to daily fire response reporting requirements and strict monitoring to ensure effective fire prevention and suppression in the concession areas managed by its suppliers, said the council on Oct 19. These suppliers are Bumi Mekar Hijau, Bumi Andalas Permai and Sebangun Bumi Andalas (SBA) Wood Industries. APP’s Singapore Green Labelling Scheme Plus (SGLS+) certificate may be suspended if its additional reporting is unable to demonstrate that strengthened monitoring, fire prevention and suppression measures have been implemented effectively, SEC added. “If so, the use of the SGLS+ logo on products associated with the certification would have to cease,” it said.
A viscose shirt and a roll of toilet paper are two very different products, but they have one thing in common. They’re both made from wood fibre – a commodity that is in growing demand, placing undue pressure on forests, environmentalists warn. According to Canopy… more than 300 million trees are felled every year, including from some of the world’s most biodiversity-rich forests, to make wood-based fibres for the fashion industry. …“Reducing dependency on forests and forest-based fibres just makes business sense from a resiliency perspective,” says Canopy founder Nicole Rycroft. As the devastating wildfires in Europe and North America have demonstrated, “this is a fibre basket that is literally going up in smoke”. She expects the EU’s deforestation regulation to increase competition for the wood, driving up cost. In addition, viscose production is chemically intensive, so closure of the Strait of Hormuz has also pushed up prices. [To access the full story a Reuters subscription is required]
Nature-based infrastructure (NBI) delivers essential services like flood protection, water regulation, and climate resilience, but remains difficult to finance because its value shows up as avoided costs, not direct revenue. Drawing on 45 assessments across 29 countries, this report shows that for every USD invested, NBI delivers USD 3.21 in benefits, and sets out how to finance it at scale. Nature-based infrastructure (NBI), such as wetlands, forests, coastal systems, and urban green spaces, is increasingly recognized as a viable alternative to conventional “grey” infrastructure. NBI delivers essential services such as flood protection, water regulation, and climate resilience, while also restoring ecosystems and supporting local livelihoods. Despite this potential, NBI remains difficult to finance. Its value often shows up as avoided costs and co-benefits rather than direct revenue, making it hard to fit into conventional infrastructure appraisal and budgeting. IISD has spent five years building the evidence base to close this gap. 
LONDON — With rising expectations to prove material origin, a 
Work to increase the use of timber in construction in Ireland has entered the “next phase” with the first meeting of a group tasked with delivering on this government ambition taking place. …The group is responsible for delivering the seven priority recommendations from a report by the Timber in Construction Steering Group. 
EUROPE — The European Federation of Wooden pallet and Packaging Manufacturers (FEFPEB) fully supports the PPWR’s objectives to strengthen circularity and promote reuse.However, following our review of the work concerning wooden pallets, we have seriousconcerns that the current assessment does not adequately reflect how pallet reuse operates inpractice or provide a sufficiently representative basis for establishing a mandatory minimumnumber of rotations. For the reasons set out in the attached statement, FEFPEB does not support the introduction ofa mandatory minimum rotation requirement for wooden pallets on the basis of the currentassessment. In particular, we believe that the evidence base and methodology should bereassessed, with meaningful involvement of the wooden pallet sector, before any suchrequirement is considered. Wooden pallets already operate within mature systems of repeated use, repair, reconditioning,and recycling across Europe. Their circular performance cannot always be captured through individual rotation counts.
Timber traders, pallet makers, and furniture suppliers selling into Europe will not have to trace bamboo, rattan, or used and second-hand wood to a forest plot after the European Commission’s rewrite of the EU Deforestation Regulation’s product list came into force on Friday. That is according to 
The European Union has updated its regulation on deforestation-free products (EUDR), which is intended to ensure that products placed on or exported from the EU market do not contribute to deforestation or forest degradation. …The EU amended the regulation in December 2024 and December 2025, introducing simplification measures intended to reduce administrative costs and compliance burdens for affected companies. The EUDR will begin applying to large and medium operators on December 30. Micro and small operators will be subject to the regulation beginning June 30, 2027, while micro and small operators already covered by the EU Timber Regulation will have a December 30 compliance date. The EUDR replaces the EU Timber Regulation and is part of the European Commission’s broader effort to reduce the EU’s contribution to global deforestation, greenhouse gas emissions, and biodiversity loss. …An 
Environmental organization Greenpeace International has accused Ikea Group of wood sourcing practices that are destroying forests in Europe despite the furniture retailer’s reported commitment to sustainable wood sourcing standards, according to an Oct. 13 press release. 
Europe is emerging from one of its worst wildfire seasons on record. Deadly blazes this year ripped through countries including Spain, France and Greece, forcing hundreds of thousands to evacuate and burning 699,000 hectares – four times the size of London. The disasters highlighted how climate change is fuelling hot and dry conditions that amplify wildfires. But another, often-overlooked factor played a pivotal role in some instances: How governments and private landowners are managing Europe’s emptying countryside. In the 195s, the countryside west of Madrid, Spain’s capital, was a mosaic of crop fields and pastures. If a fire ignited, the fragmented landscape would limit its spread. By 1975, the first signs of decline rural activity were visible in aerial photographs. …In the decades that followed, young forests took root. The woodland spread grew denser, joining together to form more continuous forest. Now, if a fire starts, the continuous vegetation provides fuel for the flames to spread.
Alterations made to Australia’s forests during British colonial rule have amplified the effects of climate change and rendered the country more prone to bushfires, a new study suggests. The research provides evidence for the value of cultural burning by Indigenous communities, scientists from the University of Melbourne say. “Climate records show seasons of comparably dangerous fire weather such as those seen during Ash Wednesday and Black Saturday reoccurred in the region repeatedly before colonisation, yet the open landscape maintained by cultural burning protected the land from catastrophic fire,” Michael-Shawn Fletcher, an author of the new study, said. “When colonisation ended that care, the forest expanded and thickened across the region, loading with fuel.” The study, published in the journal Nature, reconstructed the last 1,000 years of vegetation, fire and erosion in the Croajingolong National Park, East Gippsland, one of the most fire-prone forests in the southeast.
In an interview with The Ethical Corporation, Inter-IKEA Group’s global head of forestry Mikhail Tarasov pointed to biodiversity loss as one of the biggest threats to the world’s forests. Competition for forest resources and accelerating climate change, which is driving wildfires and the spread of pests and disease, add to the challenge for IKEA. The company, which processed 14.7 million cubic metres of round wood for its products last year, is one of the world’s largest consumers of timber, most of it sourced from Europe. That figure, however, represents a 30% reduction in its consumption since 2019, in part by recycling and reusing wood in its products. IKEA is working to promote better forest management so that decisions on the harvesting of trees take account of local conditions, and combine management with protection and regeneration. The different IKEA entities own over 500,000 hectares of forest. Tarasov’s group is piloting “climate smart” forestry on 16,000 hectares in Latvia.
UK — When energy supplies are disrupted, governments have little choice but to move fast. …Biofuels can offer an immediate, homegrown answer. But without strong safeguards and global policy coordination, rapid expansion of mandates can encourage the clearing of more forests, create more pressure on farmland and divert crops from food markets, raising prices and leaving some communities struggling to afford to eat. Those kinds of trade-offs do not mean we have solved energy insecurity but merely shifted the cost somewhere else — often onto the people and places with the least power to absorb it. This is what makes the warning at the heart of a new paper so urgent. The report, developed through a partnership between Chatham House and the Forest Stewardship Council, estimates that policy changes introduced in response to the Mideast Gulf energy crisis could drive a 70% increase in global biofuel production by 2030 and require an additional 36 million hectares of land for feedstocks.
New Zealand’s Energy Efficiency and Conservation Authority on Oct. 1 announced it is investing in five new wood energy aggregation facilities and four projects that aim to produce torrefied biomass and wood pellets. Funding awarded to the torrefied biomass and wood pellet projects is in the form of repayable grants that will help cover costs associated with developing detailed information required for final investment decisions (FID). If brought to market, the four projects could produce more than 500,000 metric tons of wood fuel annually, spread across torrefied biomass and white wood pellets. Awards made to torrefied biomass and wood pellet projects include… five wood energy aggregation facilities to secure low-grade wood from commercial forestry alongside the private sector. According to EECA, the sites will provide a central repository for nearby forest operations to collect, store and prepare wood that would otherwise go unused or left in the forest. 
Aden Pellet Enerji, a subsidiary of Pasifik Holding, has completed an export shipment of 3,375 tonnes of Green Planet branded wood pellets from its production facility in Giresun’s Espiye district, dispatched via 125 containers through Giresun Port to buyers across the European Union and the United Kingdom, with Italy and Slovenia identified as primary destinations. The shipment forms part of an ongoing export programme rather than a standalone transaction, with Pasifik Holding indicating that Aden Pellet’s international commercial operations continue on an established basis. This positions the company within Turkey’s growing wood pellet export sector, which has increasingly targeted European biomass markets as demand for solid biofuel continues to be shaped by EU renewable energy directives and member states’ efforts to reduce reliance on fossil fuels for heating and power generation.
