Forest products markets research in the face of structural changes
Outlook studies have exceptionally long roots in the forest sector. These studies have taken many shapes, but typically they have produced projections showing the expected trends for the major forest products markets for a couple of decades ahead, based on the continuous growth of population and income. In the period extending from the 1960s until the beginning of the 21st century, these projections have been actualized remarkably well.
In the 2000s, the operating environment of the forest-based sector has changed fundamentally. This can be seen clearly in a figure comparing the GDP per capita and the consumption per capita of the main forest products over the past two decades. Clearly, the set of market drivers have become more diversified in the 2000s, with e.g. policies driving up bioenergy demand and the increased use of electronic media driving down the demand for newsprint. A more systematic presentation on the structural changes of the forest products markets can be found, e.g., from Paul Rogieux’s doctoral dissertation (2017).
Figure. Consumption per capita in Europe (excl. Russia) (source: FAOSTAT, World Bank).
For a broader overview of the changes taking place in the forest products markets and their implications on the industries and for research, one can have a look at Hetemäki & Hurmekoski (2016). An important finding in this market review was that research has started to respond to the big changes in forest products markets with a delay. Furthermore, while the ongoing changes in the markets are almost unprecedented in terms of their scale and nature, the overall volume of independent academic market research on these topics seems to be declining rather than increasing. More academic research is needed to critically evaluate future scenarios in preparation for alternative futures and to connect the market developments to wider sustainability concerns.
Two ongoing projects, funded by the Academy of Finland (ORBIT and FORBIO) aim to address some of the gaps of knowledge regarding the structural changes in the sector. A better understanding will be pursued with several ongoing studies in cooperation between European Forest Institute (EFI) and the University of Helsinki.
As one of the highlights of the ongoing research, we are dealing with new forest products such as novel wood construction applications, textiles, plastics, transport fuels and platform chemicals. New products are a critical topic, since based on the current trends and investments plans, the productivity of wood use (revenue per unit of wood used) in Finland may stagnate or even decline towards 2030. Systematic analysis is needed to explore the possibility of new products to compensate for the maturing markets in terms of revenue and volume, as well as the possible implications on the environment.
In the evermore complex global economy, new spices are added to the soup constantly. For example, a recently announced draft of the EU LULUCF policy may end up penalizing growing harvests, which has been suggested, in the worst case, to mean some of the pro-bioeconomy countries to rethink their EU membership. Clearly, long-term market studies are needed as much as ever.
Elias Hurmekoski works as a postdoc in the Bioeconomy Programme of the European Forest Institute and is visiting the research group Forest bioeconomy, business and sustainability at the University of Helsinki in 2017.
This commentary article is based on the following scientific articles:
Hetemäki, L., Hurmekoski, E., 2016. Forest Products Markets under Change: Review and Research Implications. Current Forestry Reports, 177-188.
Rougieux, P., 2017. Modelling European Forest Products Consumption and Trade in a Context of Structural Change. Université de Lorraine, Doctoral dissertation.