LULUCF: Will the EU turn the tide on forest growth and torpedo its bioeconomy agenda?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Wood is an important renewable fuel but forests are vital as carbon sinks. [European Environment Agency/John McConnico/Flickr]

The European Commission’s proposal for Land-Use, Land-Use Change and Forestry (LULUCF) may well defeat its own purpose, writes Sylvain Lhôte.

Sylvain Lhôte is the Director General at CEPI, the European association representing the forest fibre and paper industry.

Everyone agrees that Europe needs to properly account for the impact that land use and forestry have on the carbon cycle and its overall emissions reduction. European forests are today estimated to absorb a tenth of the entire EU greenhouse gas emissions annually, this has an enormous carbon sink potential that should not only be maintained but developed.

Yet rather than seeking to encourage forest growth, the European Commission’s LULUCF proposal would set a cap on the use of forest resources. By exceeding the “forestry reference level” based on past management practices and intensity, a CO2 debit would be imposed on the member states. This move is not only entirely counterproductive for the 2020-2030 period but its implications would reach far beyond.

Contrary to a common misperception, forest area in Europe has been on the increase. Since 2005 forests have been growing the equivalent to the size of Switzerland. In other words, this equals 1,500 football pitches per day.  Forest growth is not merely the result of conservationist policies or an act of God. It directly results from the investments that the forest-based industry and owners have made over the past decades to develop and sustainably manage their assets. In some member states such as Sweden for instance, for every tree that is harvested two are planted. Similar trends are exhibited elsewhere also, with forests growing in almost every EU member state. More than two-thirds of the raw material of the forest fibre and paper industry used at the beginning of its production loop, from renewable fibres from trees to recycled paper, is certified from sustainably managed forests.

By capping the use of forest resources at the level where it was from 1990 to 2009, the European Commission’s proposal would enforce a Malthusian approach to what has been a dynamic and successful management practice. Its “cap and don’t touch” logic indeed ignores that growth comes from investments and that investors expect a return from their assets. It also forgets that in the long-run, conservationism only has a slight impact on the growth of forestry stock but also results in less resilient and ageing forests, reducing their carbon sink potential. This dimension is critical in the long run.  European forest stocks are indeed ageing and will need more active management and revenues to support regeneration and perpetuate growth.

Following the opinions of the Agriculture (AGRI) and Industry (ITRE) committees, the Environment (ENVI) committee has the possibility to put the proposal on a pro-growth and pro-investment track. The question must indeed be asked: who will make the investment in the sustainable management of forests and their growth in the years ahead? Will it come from financially constrained member states? No, the onus will fall on forest owners and users, often individual and family ones, to ensure that investment is made where it matters most and pays dividends over time through the use of their assets. If there is no incentive to invest, no one will step in to ensure that forests continue to be actively managed. This logic has unfortunately been left out of the Commission proposal.

Sadly, the proposal also impairs the EU’s own 2012 ‘Bioeconomy Strategy’, which seeks to develop sustainable and renewable alternatives to fossil-based materials. Forests are a major source of this low-carbon bioeconomy, offering long-life carbon storage in construction applications or maintaining carbon in the loop with recycled short-life paper-based products. The current proposal does not align with what the EU seeks to achieve and undermines Europe’s role as a leader on the bioeconomy.

In the end, a dynamic forest reference level ensures wider access to raw materials and greater incentives to invest in the active management of Europe’s forest. The European Commission’s proposal must therefore be revised to avoid an artificially restrictive reference level and encourage effective use of forest resources. What is clear is that regulation in this area is needed but the Commission’s proposal should be consistent with its own objectives. Europe needs investment and companies are willing to step up to the mark to make that investment happen in Europe. This can only be achieved with policies that incentivise investment in forest management and not by placing an arbitrary cap on investment potential. Let’s not uproot what has already been achieved, let’s keep both forests and the bioeconomy growing at the same time.

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