Kevin Mason
The European Union’s Deforestation Regulations (EUDR) are set to come into force by the end of this year, but many market participants feel that too many questions remain unanswered. The regulations would apply to seven commodities, including timber (fibre/pulp/paper/board). Producers must be able to prove that their production did not contribute to deforestation at the source (including within Europe) and must include specific geolocation data for raw-material inputs. Participation in existing certification schemes (e.g., FSC, PFEC) can provide some, but not all, of the required documentation and assurances.
There has been a range of reactions to the EUDR deadline across the companies in our universe, from “non-event” to “unworkable,” with far more in the latter camp. Huge hurdles to implementation remain, including the lack of a sufficiently robust European Union IT system to receive information (the test systems crashed with data from a single company!), insufficient auditors and potential conflicts between very granular geospatial data and privacy regulations. One aspect of the regulation has already been pushed back, with all countries initially classed as “standard” risk rather than the ulimate high/standard/low rating system (which will initially disadvantage low-risk countries). Senior U.S. administration officials have asked for delayed implementation, citing “critical challenges” for timely compliance.
Most of our contacts expect some form of the regulation to eventually be put in place, but timing—at least regarding enforcement—is likely to be pushed back. There will be costs for compliance, but there may be benefits too, with spot suppliers and/or producers with a weaker focus on sourcing and documentation simply choosing not to ship to Europe. Given the scope of the regulations, we see an extended (Brexit-like) adjustment period.” [END]
In a 
In early 2023, Canfor closed the original mill as it was too old and oversized for the available timber supply, later announcing they would move forward in with building a new, smaller mill. In May 2024, they then announced, “we have made the difficult decision to suspend our plan to build a new state-of-the-art sawmill in Houston, as we are not confident that an investment of this magnitude can be successful at this time.” …This announcement may look somewhat like many sawmill closures from a lack of fibre in BC, but this one is much more serious. It is a message to government that BC is “uninvestable” as some analysts have stated due to policy changes that create business uncertainty. …In terms of BC marketing, permanent mill closures and withdrawn investments are some of the worst news a lumber exporting region can deliver to world markets. …What a shame it has gone this way, and so quickly.
The twin-peaked lumber bubble of 2021 and 2022 is now nothing more than a memory. Spot lumber prices have plummeted 75% from their May 2021 record high to just $366 this week. …While the demand side of the lumber market is ailing, the supply side may be in an even worse position. …“It’s a classic bullwhip,” Jalbert noted. “The supply side [responds] in a like manner to demand, and by the time it comes to the market that demand picture is already changed—and in this case in a negative way.” …Jalbert also believes lumber prices will likely stagnate through year-end 2024, but in 2025, he argues things could turn around. Some sawmills will be forced to slow or shut down production due to depressed lumber prices in the second half of this year, lowering lumber supply—“the bullwhip in the opposite direction.”… “But that’s going to take time.”
High interest rates continued to batter the housing market in May as both 
The threat of increasing climate risks has energized the transition to a low-carbon economy. However this transition comes with its own set of risks and challenges. …These are evident in insurance perspectives on two of the most popular green industries: green building and the use of new materials like mass timber, and solar energy. They also are playing out in how insurers and agents view writing green business risks. …In April, USGBC jumped into resilient building by announcing its draft rating system, LEED v5. Centered around three areas, LEED v5 will seek to advance improvements in decarbonization, quality of life, and/or ecological conservation and restoration. One example, McBride and Zurich NA are bullish on is the use of mass timber for constructing larger buildings. …The growing interest in mass timber projects led to an update to the International Building Code in 2021. Now towers can be built as high has 25 floors.
A federal court judge in Montana has halted a logging project near White Sulphur Springs in the Helena-Lewis and Clark National Forest after he said the U.S. Forest Service failed to take into account a decline in nesting goshawks, which violated federal law. The Alliance for the Wild Rockies and Native Ecosystems Council successfully argued before federal magistrate Kathleen L. DeSoto that both the U.S. Forest Service and the United States Fish and Wildlife Service hadn’t properly considered the species, which are considered an essential indicator of old-growth forests. …DeSoto found that the Forest Service’s lack of monitoring the goshawk population violated the National Forest Management Act as well as the National Environmental Protection Act. …DeSoto found officials had data showing the population was declining and that the project would likely harm the species. It had failed to include that information in its assessment.
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SACRAMENTO, California — Swaths of California sweltered Tuesday and things were only expected to get worse during the Fourth of July holiday week for parts of the United States, with nearly 90 million people under heat alerts. The torrid conditions were being caused by a ridge of high pressure just off the West Coast and a separate ridge that spawned heat warnings and advisories from Kansas and Missouri to the Gulf Coast states, according to the National Weather Service. California’s capital, Sacramento, was under an excessive heat warning expected to last until Sunday night, with temperatures forecasted to reach between 105 degrees and 115 degrees. …About 70 miles north of Sacramento, crews working in scorching conditions were battling a wildfire in Butte County that forced the evacuation of about 13,000 people in and around Oroville. The governor’s office announced late Tuesday that federal funding had been approved to help with firefighting efforts. 
SCOTTSDALE, Ariz. — Air tankers and helicopters helped douse flames from the sky as nearly 200 firefighters on the ground battled a wildfire northeast of Phoenix on Friday that threatened scores of homes and forced dozens of residents to evacuate. Authorities expanded the evacuation area in a subdivision on the northeast outskirts of Scottsdale, closed roads and shut down part of a nature preserve as gusty winds continued to fan the flames in extremely hot, dry conditions. But there were no immediate reports of any injuries or structure damage, Arizona fire officials said. Near Phoenix, where the high reached 110 degrees Fahrenheit (43.3 Celsius) on Friday, about 60 residents evacuated homes in the Boulder Heights subdivision overnight after the human-caused fire broke out Thursday. Fire officials said they were investigating exactly what sparked the blaze about 5 miles (8 kilometers) east of Carefree, just outside northern Scottsdale on the edge of the Tonto National Forest.
California firefighters battling a blaze that has ripped through more than 13,000 acres of the Sierra National Forest just north of the Giant Sequoia National Monument and close to several hydroelectric facilities finally began to gain control Monday afternoon. Crews had the Basin fire 17% contained after days of being unable to get a handle on the fire. The wildfire was one of several burning throughout the state as officials braced for the longest heat wave so far this year, set to kick off Tuesday, two days before the Fourth of July. Forecasters predict broiling weather and increased wildfire risks. …The heat wave is expected to bring dangerous temperatures through the Fourth of July holiday and into early next week in many areas, particularly across Northern California, the Central Valley and southwestern deserts. Most of Fresno County is under an excessive heat warning with little overnight relief from the high temperatures.
