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The European timber trade regulation EUTR and the FLEGT agreement concluded with Indonesia are causing market shifts to a certain extent, says a survey by FLEGT IMM. Accordingly, less wood is imported from Africa in particular, and substitute products for tropical wood are generally used more often. That was not intended with the introduction of the EUTR, but it turns out to be a side effect. 

In 2013, the EU Timber Regulation (EUTR) came into force. The FLEGT Independent Market Monitor (IMM), founded by the EU and operated by the ITTO, has now published results from surveys in 2018 and 2019. Accordingly, the EUTR and FLEGT agreements cause market shifts.

As part of the FLEGT Independent Market Monitor 2018 and the EU Trade Surveys 2019, companies were asked whether FLEGT licensing and the introduction of the EUTR had a direct impact on the share of tropical timber in their total timber imports.

35% of those questioned in 2018 and 38% in 2019 stated that the share of tropical wood in total wood imports has either decreased slightly or significantly due to the introduction of the EUTR. It was not the aim of the EU Timber Regulation to promote or reduce the import of certain types of wood or wood products. However, market participants report such effects as a side effect.

Decline in imports from Africa

Respondents indicated that the EUTR due diligence had limited their supply base in tropical countries, particularly Africa. A concentration of the import trade with tropical timber in the hands of specialized exporters and importers was found. The EUTR also led companies to rethink their supply chain relationships. As a result, tropical hardwoods have increasingly been replaced by alternatives such as moderate hardwoods, chemically or thermally modified wood or non-wood substitutes.

None of the respondents in 2018 and only 2% of the respondents in 2019 stated that their imports of tropical timber increased as a result of the EUTR. The one or two respondents who saw an increase said that some of their key customers’ trust in the legality of tropical timber and wood products had grown and their demand had increased due to the EUTR.

Around 60% in both years said the introduction of the regulation had no impact. Most of these companies had already carried out due diligence procedures before the introduction of the EUTR and met the requirements of the EUTR before it came into force.

Imports from Indonesia increased

When it comes to the market introduction of FLEGT-licensed wood from Indonesia, the majority of those surveyed, 87% (2018) and 83% (2019), indicated no change (FLEGT = Forest Law Enforcement, Governance and Trade, licensing system for wood imports from partner countries). At the same time, 13% recorded a large or small increase in the share of tropical timber in their total timber imports in both years. Only 5% of respondents in 2019 said their imports of tropical timber had decreased due to the launch of FLEGT-licensed timber from Indonesia.

Most of these respondents blamed reputational issues related to tropical timber, which had returned to the spotlight with the introduction of FLEGT licensing. The demand for tropical timber imports – not just from Indonesia, but as a whole – had declined as a result.

Limited availability of certified tropical wood

According to the surveys, private certification systems, especially FSC, have benefited from the introduction of the EUTR. Accordingly, since the EUTR came into force, many of the respondents have preferred to buy certified wood and use certification as a means of complying with the EUTR due diligence obligations.

The capacities for certified tropical timber are limited, however, as no further progress has been made with forest certification in tropical countries. As a result, the greater focus on certified products has further intensified the substitution of tropical wood products with alternatives made from temperate wood, as these are much easier to obtain with an FSC or PEFC certificate.

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