Europe, including the UK, accounted for around 10% of the US hardwood sector’s export total of US$2.7bn in 2023.
Underlining the importance it attaches to the market was the cluster of US stands at the Carrefour International du Bois (CIB) around that of the American Hardwood Export Council (AHEC). These represented both individual companies and the sector in the states of Virginia, Wisconsin, and North Carolina.
“The industry wants and needs to diversify its export markets, not least to reduce its dependence on China, where demand has been hit by its housing sector crisis,” said AHEC executive director Mike Snow. “And besides continuing to develop our European markets, we’re also increasingly exploring other prospects including India and the Middle East and the CIB is also a valuable venue in that context given its international profile today.”
The US industry is also under pressure to boost sales generally. After rising around 11% in 2022, driven by the domestic US home improvement boom and with exports of around US$3.36bn, overall US hardwood production fell last year to a long-term low. Besides leading to some production capacity shrinkage, this has hit harvest levels, resulting in fears that they may be overtaken by tree mortality. There are concerns the level of dead wood in the forest could result in greater incidence of forest fires, and said Mr Snow, it also has emission impacts.
“Currently tree mortality in the US releases an estimated 160 million tons of carbon a year,” he said.
This forms the backdrop to and intensifies the US hardwood industry’s concerns about the implementation, set for the end of this year, of the EU Deforestation Regulation (EUDR).
The significance it attaches to the new EU rules were highlighted in a seminar at the CIB, which AHEC co-hosted with the International Tropical Timber Technical Association.
The EUDR replaces the legality focused EU Timber Regulation. It requires that all operators and large traders placing timber and wood products (as well as six other ‘forest and ecosystem risk commodities’) on the EU market, or exporting them from the EU, must undertake due diligence to show they’re not just legal, but not implicated in deforestation or forest degradation.
In another departure, EU operators and large traders must also provide geolocation co-ordinates for the plot of land from which timber and other affected commodities originated.
At the seminar, Mr Snow, said the EUDR “was going after the right things”, in terms of its prime aim, to combat deforestation caused by conversion of forest land to agriculture, and particularly in its coverage of the agro commodities most heavily implicated in this.
And he said the risk of US hardwood deriving from such land was exceedingly low.
“It’s estimated that disturbance of hardwood forest land in terms of conversion to agriculture affects about 0.005% of the total area a year,” he said. “In anyone’s book that is negligible risk.”
At the seminar, however, AHEC environmental policy director Rupert Oliver underlined the task facing the US hardwood sector in terms of providing timber origin geolocation information, given the fragmented nature of forest ownership in the country – including 9.5 million private, often family and largely small-scale holdings.
With mills sourcing from a constantly shifting supply base of small forest plots, often harvested once a generation, he said, US hardwood mills not only faced providing multiple geolocation co-ordinates for timber, these would be different from consignment to consignment.
Some, including the tropical suppliers speaking at the seminar, are looking to use third-party certification as a risk mitigation tool under the EUDR. While stressing that certification alone would not provide a ‘green lane’ through the Regulation, Mr Oliver also said it was not a significant option in the US as there is negligible take-up by private nonindustrial forest owners.
Consequently, AHEC has focused on developing a bespoke system to assure global markets that US hardwood is sourced legally and only from forest land where there is a negligible risk of conversion to agriculture.
One of the pillars of the system, which has government backing, is ‘high resolution’ legality risk assessment of the 33 principal hardwood forest states. This is set to be completed this year by a team of experts from non-profit sustainability and environmental management consultants and advisers Dovetail Partners.
It will combine with the provision of geolocation co-ordinates for every county within those hardwood states, with the AHEC system capable of overlaying satellite data to monitor forest disturbances on to the uniquely detailed land ownership mapping available in the US. And it was highlighted that the average area of US counties is less than that of a typical tropical forest concession, which can count as a single plot under the EUDR.
The monitoring process will use AI to assess the likelihood of any forest disturbance being followed by conversion to agriculture and thereby to accurately quantify deforestation risk for each individual county.
“The conclusion is that satellite forest monitoring is best done on an annual basis to show whether forest disturbance is part of regular forestry processes or long-term, and potentially deforestation,” said Mr Oliver.
“A pilot of the system undertaken earlier this year in Georgia picked up 11,000 points of forest disturbance, but the preliminary AI analysis suggested only a vanishingly small proportion of these would likely be followed by conversion to agriculture.”
AHEC plans to link the satellite assessment with new scientific techniques such as stable isotope ratio and trace element analysis that can identify the provenance of wood products using a simple lab test or even a hand-held device to assess their chemical composition. Under favourable circumstances, these technologies can demonstrate provenance to within a 40 square mile area with a high degree of confidence. Such high levels of resolution require the prior availability of a comprehensive database of timber samples collected in line with strict protocols from across the supply region, a process now getting under way in the US hardwood sector and likely to take up to three years.
The seminar speakers from the tropical sector were operating in a very different context. They represented companies with large forest concessions in Africa, each of which, as previously mentioned, can be presented as a single ‘plot of land’ under the terms of the EUDR.
That hugely simplifies provision of geolocation data. In addition, they said, they were relying for compliance on their own traceability systems, plus FSC and PAFC/ PEFC certification schemes, which the latter organisations say are now in the process of ‘aligning’ with the Regulation.
Vincent Istace, CSR head of Olam Agri, parent of Republic of the Congo-based CIB looked at the forest management record of the Congo Basin more widely. Supported by the ATIBT, he said, there was co-operation across the region to drive sustainable management practices – and to meet the requirements of the EUDR.
“The rate of deforestation is now less than 1% a year – lower than current levels in parts of South-east Asia and South America,” he said.
CIB itself, he added, manages around 1.8 million ha of FSC-certified concessions.
“We operate a cutting cycle of one tree per hectare every 30 years,” he said. “And our certified management process includes social aspects and habitat and wildlife protections. In addition, we have a major planting programme.”
CIB was also confident its traceability systems would help meet EUDR requirements.
“Using identification numbers for each tree, we can track timber from stump through processing,” he said.
Emmanuel Bon, general-director of Cameroon-based Alpicam also expressed confidence that his company could meet EUDR demands through the combination of FSC sustainable forest management certification, which it achieved in 2023, and its own tracking and forest inventory systems.
He said geolocalised data for cutting areas was already recorded as a matter of course. Cutting area details are also uploaded into the Cameroon government operated SIGIF 2 system, which allows tracking of timber “from the cut to the port of shipment”.
The seminar closed with a Q&A session. In response to one query, Mr Oliver said, that, while the AHEC deforestation-free assurance system was being developed for the US hardwood sector specifically, it had potential application in other countries with fragmented forest ownership. That included some in Europe and South-east Asia.
AHEC, he added, has presented its approach to representatives of EU agencies and national competent authorities. Whether it will be accepted as meeting the demands of the EUDR in the field when the Regulation is implemented remains to be seen. But regardless, said Mr Oliver, the system will enable the US hardwoods sector to make a solid, data-based deforestation-free and legality claim in markets worldwide.
