Russia’s invasion is creating timber supply chain challenges for EU and UK construction. In related news: the Timber Trade Federation’s guidance on ‘conflict timber‘; and Cepi says the pulp & paper sector should have ‘essential supplier‘ status.
Companies making news include: Paper Excellence (asking price for Kamloops mill); GreenFirst (Q4, year end financials); and Louisiana Pacific (new PEFC standard in Chile). On the Market front: the latest updates on US and Canadian housing starts.
In Forestry/Climate news: tree rings help reveal a warming future; tropical forests help keep air cool and moist; and more on ENGO efforts to link Canada’s GHG emission reduction plans with old-growth forests and logging emissions.
Finally, the Southern Forest Products Association is seeking a new EU-based market rep.
Kelly McCloskey, Tree Frog Editor
The Timber Trade Federation (TTF) told its members that purchases from suppliers in the ostracised nations could fall foul of regulations to tackle illegal logging abroad. Guidance published by the government last year to clarify the Timber and Timber Products… stated that due diligence by purchasers must include “consideration of the prevalence of armed conflict”. …TTF said “it is the legal duty of importers to be able to prove that there is ‘negligible risk,” he said. …Chief executive David Hopkins [said] “We are now advising all members of TTF to cease trading with Russia and Belarus.” …The federation has since moved to clarify when material, which was already in the process of export to the UK, should be classed as “pre-conflict timber” and allowed to enter the domestic supply chain. …“We are advising our members to follow the PEFC and Forest Stewardship Council guidelines.”
Russia’s invasion of Ukraine is likely to cause ‘huge disruption’ to EU and UK timber supplies, following an already-turbulent period of record demand and rocketing prices for timber products across Europe throughout the Covid-19 pandemic. Although few manufactured timber products are imported directly into the UK from the warzone, shortages across the continent will intensify competition for already limited wood supplies – increasing prices and reducing the likelihood of meeting net-zero targets through growing the use of timber in construction. ‘Beyond the human tragedy that this conflict is causing, the European timber industry will be negatively affected by a shortage of wood products,’ said Silvia Melegari, Secretary-General of CEI-Bois, the main European organisation for the timber and woodworking industry. PEFC now labels all timber originating from Russia and Belarus as ‘conflict timber’. …Likewise, FSC has suspended all trading certificates in Russia and Belarus.
A year ago this week, this page began an editorial with a colloquial observation: “Canada’s housing market is bonkers.” Since then, the stew of factors prompting that observation have only intensified. Low interest rates, escalating purchases by investors, and a general mania convinced the hot market will just get hotter have exacerbated the long-term lack of supply. Today, bonkers is ever more so the right word. The latest data show the MLS home price index climbed 3.5 per cent in February from January, the biggest-ever monthly gain. …Solving the long-term supply shortage does not address the short-term mania. …The building of housing in cities has been too heavily restricted. Most land is reserved for the least density possible – the detached home. …But it’s obvious that supply is the real, long-term issue.
The average of seasonally adjusted and annualized (SAAR) housing starts in the U.S. through the first two months of 2022 has been 1.713 million units, +11.5% versus January-to-February of 2021. Canada’s comparable 2022 performance has been 238,200 units, -18.2% on a year-to-date basis versus 2021’s same time frame. The U.S. in February of this current year managed its highest monthly number (SAAR), at 1.769 million units, since before the 2008-2009 recession. Canada, in its monthly readings so far in 2022, has yet to come close to the 300,000-unit level it busted beyond on three occasions in 2021. Graphs suggests ongoing good news for U.S. housing starts. Residential building ‘permits’, which often lead starts, are near 1.9 million units. …However, the 12-month moving total of the difference between permits and starts, using ‘actual’ rather than SAAR numbers.
A new report from Capital Economics is warning the expected magnitude of interest rate increases from the Bank of Canada could “topple” the domestic housing market. Capital Economics Senior Canada Economist Stephen Brown said the 2.5 per cent benchmark rate markets are now pricing in for 2023 would likely not only slam the brakes on home price appreciation, but could put it in reverse. “Can the housing market withstand a return to pre-pandemic mortgage rates, even though prices have risen by more than 50 per cent in the interim? The answer is a firm ‘no’,” he said. …Even with Capital Economics’ more modest view of the benchmark rate topping out at two per cent, Brown said he expects home price inflation to stall next year.
Days before the federal government is expected to explain how it will meet greenhouse gas targets, 90 prominent scientists have written a letter urging it to ensure that old-growth forests are a big part of that plan. “We are deeply concerned by the evidence of continued deforestation and degradation of primary forests globally and in Canada because of the resulting impact on greenhouse gas emissions and the biodiversity crisis,” says the open letter to Prime Minister Justin Trudeau. “Canada’s primary boreal and temperate forests have a vital role to play as natural climate solutions, and it is important that their protection is central to Canada’s climate and biodiversity policies.” On Tuesday, the federal Liberals are expected to unveil their emissions reduction pathway, the strategy by which Canada is to become carbon-neutral by 2050. Nature-based solutions are expected to play a large role. Canada has a ways to go, the letter says.
Canada’s ability to meet its climate targets, as outlined in its soon-to-be-released 2030 Emissions Reduction Plan, might already be compromised. Success will depend on whether or not Canada recognizes that addressing climate change will require both eliminating dependence on fossil fuels and properly accounting for industrial logging. …Industrial logging causes a net release of more than 80 million tonnes of greenhouse gas emissions a year, equivalent to the emissions from all of Canada’s oilsands operations. Unfortunately, how Canada counts and reports on GHG emissions is hiding logging’s true climate impact. The federal government considers net emissions from the forest sector to be minimal, claiming that emissions from the harvesting of wood are almost totally offset by carbon captured by other growing forests. …Canada can be a global leader… But only if it recognizes the full extent of emissions associated with logging.
TUCSON — Each specimen in a strangely beautiful “treehouse” laboratory here tells a story of resilience — from droughts and floods to catastrophic wildfires and bitter winters, some occurring thousands of years ago. Nowadays, though, much of the work at the University of Arizona’s Laboratory of Tree-Ring Research is about the future of a planet that’s squaring off against global warming and its cascading disasters. Armed with the largest collection of its kind in the world — 700,000 samples and counting — scientists are trying to better comprehend what’s ahead by translating the autobiographies that trees record in their rings. The basics are known: Rings reveal a tree’s age, with thin rings indicating drier years and wide rings, wetter years. Pockmarks on rings identify years of extreme cold; blackened blotches are burn scars from fires a tree survived. “Climate variability drives tree-ring variability,” said fire ecologist Thomas W. Swetnam.
The world’s forests play a far greater and more complex role in tackling climate crisis than previously thought, due to their physical effects on global and local temperatures, according to new research. The role of forests as carbon sponges is well established. But comprehensive new data suggests that forests deliver climate benefits well beyond just storing carbon, helping to keep air near and far cool and moist due to the way they physically transform energy and water. The study found that the band of tropical rainforests spanning Latin America, central Africa and south-east Asia generate the most local and global benefits. Researchers from the US and Colombia found that overall forests keep the planet at least half of a degree Celsius cooler when biophysical effects – from chemical compounds to turbulence and the reflection of light – are combined with carbon dioxide.