Current business situation remains challenging

Austria’s wood industry can present positive figures for 2022, as the responsible trade association announced at its annual press conference. “Our nearly 1,300 member companies and their approximately 28,000 employees sold goods worth 11.45 billion euros in 2022, an increase of 13 percent. Foreign trade also shows a surplus of almost 1.8 billion euros, 11 percent more than in 2021,” says Herbert Jöbstl, chairman of the Austrian Timber Industry Association. “Despite the war in Ukraine and high inflation, our business figures for 2022 are still good. Wood products from Austria are recognized and in demand in Europe and worldwide. Our international success secures jobs and purchasing power in Austria,” says Jöbstl.

In contrast, there is little optimism in the assessment of the current business situation. “Since the middle of 2022, we have seen a significant decline in demand, especially from the construction industry as the largest customer. There is no spring revival this year, neither from the domestic construction industry nor from overseas markets,” shares Dr. Erlfried Taurer, Deputy Chairman. of the professional association of the wood industry of Austria, with. In view of the weak order situation, plants will have to continue to reduce production capacity, as the costs of energy, logistics, raw materials and personnel remain at a high level and are rising. In the long term, Taurer is optimistic: “The success story of wood is still intact. We use a renewable raw material that is versatile as well as reusable and stores carbon. This puts us in an excellent position for the future.”

The timber industry is in favor of countercyclical investment incentives in view of the slowdown in construction activity. “Construction is important to the overall economy and employment. In addition, less housing construction meets a growing population. We are also talking about a social issue here,” emphasizes Dr. Andreas Ludwig, Deputy Chairman. of the Austrian Timber Industry Association, and continues: “In view of the energy, climate and economic crises, we propose to counter these crises by investing in affordable and energy-efficient housing, including new construction, refurbishment and redensification.” The annual renovation rate has stagnated at 1.5 percent for some time, and the political target of 3 percent has been far from met. About 70 percent of the residential buildings in Austria were built before 1990, most of them in the 1970s. “We therefore advocate a renovation turbo with the necessary instruments such as subsidies, easy-to-implement housing concepts, such as the modular construction method, comprehensible advice for owners and the removal of legal hurdles. Wood as a climate-friendly building material can make an outstanding contribution here. In this way, we can use our own raw materials to strengthen regional value chains, the economy, jobs and climate protection,” Ludwig emphasizes.

Do not restrict waste wood as a secondary raw material

Wood can be used again and again. This is good for resource efficiency and prolongs carbon storage. It is all the more annoying that waste wood is subject to the Waste Management Act and thus, since January 2023, there is an obligation to transport it by rail. “Now rail is undoubtedly an ecological mode of transport, but unfortunately it is not competitive compared to trucks. The obligation to transport by rail increases our transport costs, in some cases by double, and leads to new bureaucratic hurdles,” criticizes Erlfried Tauer. It also weakens the competitiveness of the circular economy. “The use of waste wood is becoming less attractive and companies are increasingly using virgin wood. The resource-friendly use of waste wood as an important building block for circular economy and bioeconomy is massively hindered by this legal framework. Waste wood is not waste, but a valuable raw material, so rail transport should not be mandatory,” Taurer emphasizes.

The European Green Deal aims to make Europe the first climate-neutral continent. From the timber industry’s point of view, the Green Deal pursues the right goals, and the forestry and timber industry could contribute a great deal to achieving these goals. “Unfortunately, some political impulses from the EU related to forestry lead to restricting the use of wood as a sustainable and renewable resource,” Herbert Jöbstl regrets. Either it would be a matter of placing large areas of forest under even stricter legal protection and restricting forest management, or it would be a matter of forcing carbon buildup in the forest. Austria’s timber industry is in favor of a better Green Deal. Chairman Jöbstl: “Forests must be managed sustainably in order to be climate-smart, vital and continuously growing.” In addition, CO2 emissions can be avoided by using wood from Europe’s forests. “While the carbon of the harvested tree remains bound in a wooden building, a young tree grows back in the forest and absorbs CO2 again. In this way, we create a second forest that protects the climate and guarantees jobs. Wood utilization and active forestry are powerful levers to counteract climate change,” Jöbstl emphasizes. Together with timber industry associations from seven EU member states, the Austrian Timber Industry Association is calling for a course correction in EU forestry policy in a joint position paper. “In Europe, we have the raw material wood and the manufacturing expertise for a sustainable and climate-friendly bioeconomy. A green deal is needed that guarantees reliable and economical raw material availability,” Jöbstl concludes.