Wood Supply in Times of Climate Change

Mercer Holz, Christian von Itzenplitz, April 2021

The condition of the forests shows us very clearly: Climate change has arrived in Central Europe and is causing massive damage to the forests at times due to weather extremes. 

We are in the third year of a critical situation that has brought us large quantities of damaged timber. The effects were clearly felt on the log market. Not all quantities could be processed in the timber industry and the wood was offered at very low prices. 

After slight price declines from 2015 to 2018, the oversupply made itself clearly felt in 2019 and 2020.

Current Damage Situation

In the three years from 2018 to 2020, the amount of damaged wood in Germany was around 170 million solid cubic metres (scm). Total annual logging over the past decade has averaged around 60 million scm per year. Mercer Holz purchases an average of 4.6 million cubic metres of roundwood per year.

The mentioned volumes of damaged wood are not synonymous with volumes of wood offered, because only as much roundwood can be brought to the market as is also processed. Part of the growing supply was compensated by exports and storage volumes. The rest was not processed in the forest. 

In order to be able to assess the significance of these damaged wood volumes of the last three years, it is worth taking a look at the past. 

The timber stock in German forests has continued to grow in recent decades, and the felling of timber has been below the growth of timber in the forests over the long term. In the years 2012 to 2017 alone, the timber stock grew by 216 million cubic metres.

However, the amounts of damaged timber were not specifically removed by harvesting measures, but have resulted in damage over large areas.

In total, about 245,000 hectares of 5.9 million hectares of productive coniferous forest area had to be cut down in the last three years. After reforestation, these areas will not be available to us as usable production land for the next 20 years. That’s about four percent. The crucial question for us, however, is how and whether these areas will be reforested. 

Both the climate development and the possible uses in the further processing of the wood must be taken into account. 

The forestry industry is reacting at this point and planning for the future with more climate-stable forests. Since climate change is progressing much faster than the forest ecosystem can react to it on its own, humans must intervene in a supportive manner. This process costs a lot of money and commitment. 

It will be the task of forestry to find tree species and management systems that can cope with climate change. To this end, we support the forestry industry both at the political level and as a long-term and reliable partner in the timber market. Our main concern here is to ensure that we can continue to practice active forestry in the future and make raw materials from the domestic market available to consumers.

Sustainable and climate-adapted forestry in Germany and Europe is essential for climate protection. After all, we will only achieve our climate protection targets if we bind CO2 in the cycle through wood utilization and have productive forests.

Measures Mercer Holz

Within the framework of regular strategy meetings, the Mercer Holz management team deals with this development. Since 2019, at the latest, it has been clear to all involved that the current weather events in the form of storms and droughts and the resulting beetle problems pose the fundamental question of the raw material supply of wood. 

The current numbers serve as a basis to develop scenarios for the future. Although we cannot make weather forecasts for the coming months and years, we are aware of the medium-term climate development and the resulting reactions of the forest. 

We are observing and analyzing current developments very intensively. However, taking into account the Central European forest developments and with preparations for fluctuating wood markets, we believe that we will be able to supply the Mercer mills with raw materials in the future as well. 

The challenges have not diminished. However, according to the Mercer principle, we will be able to be world-class in the supply of raw materials. 

At Mercer, we are Sustainable. By design.