Yahoo News 4 Aug 09;
GENEVA (AFP) – The forestry industry in Europe, the ex-Soviet Union and North America has suffered the biggest drop in demand for wood since the 1970s with the slump in housing markets, the United Nations said Tuesday.
But as the industry closes down sawmills and restructures, it can see a booming new market for environmentally-friendly wood-based energy, such as pellets and biofuels, the UN Economic Commission for Europe said.
"This year we had one of the biggest drops ever in consumption of forest products," said Ed Pepke, one of the authors of the UNECE's annual market review of forest products.
"This was an amazing turnaround from a few years ago when we were at record levels of consumption," Pepke said.
Consumption of sawn wood, paper and board in the UNECE region fell 8.5 percent in 2008 to about 1.26 billion cubic metres, the sharpest decline since the oil crisis in 1973, as the biggest consumer of wood, the construction industry, slumped.
"Much of this has to do with the housing crisis in the United States first and, secondly, in Europe," Pepke said.
From a peak of 2.2 million homes built in the United States in 2006, construction has fallen to about half a million houses in 2009, with a 50 percent drop in the past year alone, according to industry data cited by UNECE.
With the paper industry also declining due to the growth in electronic communications, the crisis has prompted the closure of sawmills and massive restructuring in Nordic countries and Canada, the report said.
"There's a lot of change in emphasis from wood and paper products to wood energy as a result of this," Pepke told reporters.
Wood energy is accelerating in the UNECE region, with production of wood pellets for heating and furnaces growing from about two million tonnes in 2000 to more than 10 million tonnes this year.
"Wood energy markets are surviving the economic crisis better than the other sectors," said Tapani Pahkasalo, UNECE Forest Products Marketing Specialist.
The report forecast that the market for wood fuel pellets is expected to double by 2012 from the 2008 level of nine million tonnes.
