Finnish upturn threatened by sulphur directive

The Finnish forest products sector pulled further from recession in the first half of the year, but it is warning that new EU regulations on marine fuel sulphur content and tougher economic conditions could throw its recovery off course.

According to the Finnish Forest Industries Federation (FFIF) the value of Finland’s forest sector production rose 10.5% in the first six months to €10.5bn.

Sawn timber production reached 5.4 million m³, a rise of 8% on the previous year, while plywood output increased 16%.

The Finnish timber industry was boosted by an improvement in construction in “some European regions, including the Nordic regions”, said the FFIF.

The industry reports paper and board production on a par with 2010 at 5.8 million tonnes, but a 2% improvement in pulp output to 3.5 million tonnes.

The rising trend in wood purchases in the period also indicated the industry in positive mood. In total the industry bought 7 million m³ of timber from April to June, “with all grades in good demand” said the FFIF. This, it added, was almost double the figure for the first quarter, although prices are at their “highest level for a few years”.

While acknowledging the improvement in the sector’s health, FFIF director-general Timo Jaatinen said that economic conditions were set to become more challenging and at the same time the new EU sulphur directive “could jeopardise the cost-competitiveness of Finnish manufacturing facilities”.

The EU ruling made in July is that from 2015 sulphur content of all maritime fuel used in the Baltic, North Sea and English Channel be cut to 0.1%. This is 10 years earlier than similar international legislation for other sea areas and, said the FFIF, could add €200m to the Finnish forestry setor’s transport costs annually.

“This decision poses a significant threat to the competitiveness of our export-dependent industry because over 90% of its products are shipped overseas,” said Mr Jaatinen. “The Finnish government must actively engage other Baltic Sea countries to safeguard the prerequisites of the export sector.”

He added that the FFIF wants the EU directive delayed until 2025.

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