Article / February 23, 2021

Towards Sustainable Timber Supply Chains

Timber is a vital commodity that supplies the market with everything from construction materials to toilet paper. But this crucial industry has seen some seismic changes as a result of an expanding global population and the pandemic crisis. 

Lumber prices nearly tripled in 2020 and consumption doesn’t show any signs of slowing down. Estimates suggest the industry drops anywhere between 3.5 and 7 billion trees annually to meet skyrocketing demand for timber. 

These staggering numbers translate to one person utilizing almost an entire tree by themselves each year – the global appetite for wood is hard to overstate.

With consumption up 11% year over year, it won’t be easy to meet rising demand – especially not with calls for increased sustainability from global wood buyers. 

Researchers at MIT managed to grow wood in a lab, but the viability of that as an alternative to traditional forestry is doesn’t seem likely any time soon.

As the various participants in the timber supply chain strive for sustainability, they face an uphill battle. Today we’re exploring how there is light at the end of the tunnel via sustainable forestry.

Better dialogue and governance is already making an impact.

 

While timber does literally grow on trees, the process takes time. 

As timber demand climbs, prospectors are tapping into greater swaths of land for timber collection. Exploited forests and jungles like the Amazon and parts of Southeast Asia are shocking examples of the market’s insatiable demand for lumber. 

If the price is right, people will go to extraordinary lengths to collect this increasingly precious material. When I visited the Upper Amazon Basin in Peru in 2020, I witnessed firsthand the enormous barges rumbling downstream with multi-story stacks of ancient jungle wood, likely entirely illegally harvested. I found it deeply disturbing. 

After witnessing that, I can’t stress the importance of sustainable forestry practices enough.

Thankfully, increased financial partnerships between supply chain participants, financial institutions, and governments – along with the deployment of new technologies – are having a discernable impact on reducing waste and curving illegal timber practices. 

Going to the Source – Logging

So many of the problems in forestry start and end with logging. While it’s easy to take a chainsaw and chop down a tree, assuring that future generations will have the same opportunity is a more difficult task. 

That is why many countries have a mandate for sustainable logging practices. The rule of thumb is to plant more than one tree for each tree felled. Almost all North American and European logging projects are considered sustainably managed, serving as an excellent example for the rest of the world. 

The European Union provides nearly $97 million each year, along with substantial negotiation resources, to support sustainable forestry initiatives in developing countries.

The EU and other groups conduct environmental impact assessments before, during, and after logging to assure that the overall biodiversity of a region isn’t negatively impacted in an irreversible way by logging process. It’s a pockmarked process, but it’s making a difference.

To make forestry sustainable for future generations, many governments and organizations have implemented carefully planned logging rotations, or selective cutting. These processes assure that forests are successfully rehabilitated and sustainably managed. The rotations vary by region, with rotations lasting 80 years or more in Canada and anywhere between 8-12 years in tropical environments.

Another promising way that people are reinventing (or in many cases, rediscovering) forestry is through agroforestry — The marriage of agriculture and forestry through integrating trees or tree crops with row crops and livestock.

Studies show that a combination of appropriate technology and traditional silvopastoral systems, a subset of agroforestry, can drastically improve quality of life, market integration, appreciation of traditional knowledge, gender equality, and a sense of belonging and pride in familial relations for small-holder farmers.

In countries like Colombia, where forestry supports the livelihood of millions of people, the Intersectoral Pact for Legal Timber (PIML) has swelled to over 70 public and private organizations in support of sustainable development goals in forestry.

[ Sustainable Timber In Colombia ]

Other studies suggest that integrating trees on farms prevents environmental degradation, improves agricultural productivity, increases carbon sequestration, produces cleaner water, and supports healthy soil and ecosystems, all while creating stable incomes and social benefits for agriculture workers and small landholders.

That’s a long list of benefits! It would be difficult to argue with the tree-huggers at this point.

Nature is the best forester

 

Natural forest regeneration of rotated timberland is consistently cited as the most effective method for rehabilitating logged acreage. This approach also has the largest positive impact on local biodiversity, further cementing nature as the champion of forest rehabilitation. As long as rotation is sustainably undertaken, this process bodes well for the heart of the timber supply chain.

Illegal logging is the primary challenge facing the logging industry. It can be difficult to discern legitimate logs from illegal harvests. The practice of “greenwashing”, or mischaracterizing the nature by which timber was harvested, is prolific. 

Logs carrying the Forest Stewardship Council’s (FSC) tag fetch 15 to 25% more at auction. This hefty premium has the unfortunate result of bribes and quid pro quos that result in illegally harvested logs receiving the FSC seal of approval. 

Thankfully, technology is rapidly closing the gap through digital monitoring and point or origin systems. 

Logging companies are increasingly utilizing RFID technologies to tag individual logs, assisting downstream warehousing and manufacturing entities in verifying point of origin and legality.

 

More sustainable sawmilling can lead to major cost savings

 

Raw materials comprise over 70% of sawmill costs. RFID identification of logs streamlines the handling process, positively impacting both the logging and sawmill portions of the supply chain. 

Sawmills will greatly benefit from implementing more sustainable practices. Some surprising estimates suggest that as much as 50% of all sawed cubic tree material that passes through a sawmill ends up as waste material. 

In Australia more than 1.7 million tons of wood has been wasted per year on average, highlighting the intense need for more optimized wood processing procedures – any industry with a success rate of 50/50 raises eyebrows. 

Currently, much of this discarded wood material is simply buried, left to decompose. Harvesting a tree, transporting it, and processing the material, only to inevitably bury the result is a massive waste of potential. 

Studies now suggest that implementing waste wood material as thermal energy for the sawmill process can greatly reduce the environmental impact of lumber processing and, in some cases, produce charcoal as a marketable byproduct of the process. 

Lean manufacturing in forestry is sorely needed for the industry to make consistent improvements in reducing waste while also streamlining the entire production process. 

All segments of the timber industry are working towards sustainability in their respective segments of the supply chain. Technology is massively improving verification mechanisms, making it increasingly difficult to pass off illegally harvested timber as legitimate. So where does all this lead us?

The future is bright for sustainable forestry

 

While corruption in agroforestry remains high, recent advances in agriculture and improved dialogue between all stakeholders have shifted the industry. 

“With our forestry investments, we create 30–50 new jobs per 1,000 hectares of new plantations established,” reports Steven Duyverman and Charlotte van Andel of the Netherlands Development Finance Company (FMO). 

Efforts such as these are improving forest biodiversity, empowering women and vulnerable peoples, and equipping people with the skills necessary to sustain their livelihoods for the long-term.

The confluence of these trends means that the timber supply chain is quickly moving towards an even more sustainable future.

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