1. « DG GROW’s activities for the EU Forest-based Sector"
Forestry Statistics & Accounts Working Group Luxembourg, 20/02/2018
European Commission
Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs
Jeremy WALL
Unit C2 – Resource Efficiency and Raw Materials

2. (Internal Market, Industry, Entrepreneurship and SMEs):
Role of DG GROWTH
(Internal Market, Industry, Entrepreneurship and SMEs):
Generally: develop & implement EU Industrial Policy Strategy:
NB Renewed EU Industrial Policy Strategy 13/09/2017 incl.: High-level Industrial Roundtable: Industry Days (20-22/02/2018)
Sectorally: enhance EU forest-based industries’ (F-BI) competitiveness by focusing on creating growth and jobs by:
Stimulating growth
Securing an affordable raw materials supply, including wood, & improving resource and energy efficiency
Ensuring a coherent regulatory framework in the EU & fair level playing field on global markets
Fostering education, skills & training
Promoting research & innovation
Challenges and related objectives:
The F-BI was severely hit by the recent crises, which have led to a significant reduction in number of jobs and turnover estimated for -19% and -13% respectively in the period and that have still not recovered in 2013 to pre-crisis levels.
The EU F-BI competitiveness is also negatively impacted by the following challenges (and thus the corresponding objectives):
increasing competition from countries having low production costs, combined with a decline in demand for F-BI products as a result of structural changes and slowdown in construction sector => "boosting demand"
availability of raw materials at affordable prices mainly due to the growing demand for wood from often subsidised bio-energy sector and increasing exports of secondary raw materials outside the EU.
increasing energy prices and gas prices difference compared to North America and pressure to reduce greenhouse gases, in particular impacting energy-intensive industries of F-BI (pulp & paper and wood panels producers). => "securing an affordable raw materials supply & improving resource and energy efficiency"
the need of a coherent and predictable regulatory framework providing an enabling conditions for investment decisions and creation of growth and jobs in the EU. => "ensuring a coherent regulatory framework"
protectionist measures on international markets creating market distortions, both for import of input materials and export of final products. => "ensuring a fair level playing field on global markets"
structural problems of ageing workforce combined with difficulties to attract young workers => "fostering education, skills & training"
securing access to finance for research and innovation, in particular to SMEs, which often lack financial capacity. => "promoting research & innovation"

3. F-BI Blueprint Structure
EU Forest-based industries (F-BI):
four industries covered:
Woodworking
Furniture
Pulp & paper manufacturing and converting
Paper-based printing
Represent:
about 7% of EU manufacturing GDP
about 3 million jobs
NB no sectoral policy but strategic document as part of
the overall EU Forest Strategy (2013):
Blueprint for the EU Forest-based Industries
(SWD(2013)343 of ) NO SECTORAL BUDGET!
(NB Forestry under Rural Development Regl.) 3

4. F-BI Blueprint Structure
Blueprint for the EU Forest-based Industries
Contents:
Sectoral economic outlook
Sectoral technological outlook
Focus on the four sub-sectors:
Key features
Challenges
Opportunities
Challenges & remedial initiatives, e.g.: 4

5. F-BI Blueprint: scope for action
The Blueprint identified challenges facing the EU F-BI, for which remedial initiatives identified:
resource and energy efficiency
raw materials sources and flows
logistics (wood harvesting, infrastructures & transport)
structural adaptation
innov stimulating growth
ation; research & development
education, training & skills; ageing workforce
Coherence & costs of EU legislation
EU climate policy from 2030
international competition, trade & co-operation
Information, communication & image
F-BI Blueprint: scope for action 5

6. F-BI Blueprint: Implementation:
:- studies: information for furniture; wood availability 2030
- European Innovation Partnership Raw Materials: commitments, incl. wood mobilisation
- new EU Expert Group on Forest-based Industries
2015: - study: cascading use of wood (definition & policy use)
- study: cumulative cost assessment (CCA) of the impacts of EU legislation & policies on the forest-based industries
- re-evaluation of wood as a (biotic) critical raw material
- development of the Multi-annual Implementation Plan
(MAP) for the EU Forest Strategy, incl. F-BI Blueprint
- Sectoral input to the Circular Economy proposals
2016: - sectoral input to the Energy Union, esp. RED II
(revised Renewable Energy Directive)
- sector-relevant calls under Horizon 2020 (SC2 & 5)
- trade negotiations (e.g. CETA Canada)

7. F-BI Blueprint: Implementation:
2017: development of FP9 (to follow on from Horizon 2020)
- European Innovation Partnership Raw Materials: nd round of commitments, including wood:
- Review of Bio-economy (NB Bio-economy Day 16/11/17)
- trade negotiations (e.g. EU-Japan FTA)
- trade restrictions on wood both in EU MS and neighbours
2018: - development of good- & best-practice guidance on cascading use of wood under the Circular Economy
- Skills Agenda: sectoral projects construction (including
wood) and paper-based value chain (tbc)
- Trade deals (e.g. Mercosur, Indonesia, Russia, Ukraine)
- development of FP9
- inputs to the revision of the Bio-economy Strategy
- Mid-term Review of EU Forest Strategy (F-BI inputs)

8. Forest-based biomass: demands
Forest biomass dilemna:
- EU forests are increasing in area and growing stock (and age!) so there is theoretical potential to harvest more wood and arguably more should be cut – BUT:
- Natura 2000 does (e.g. no/less removals, deadwood) and LULUCF (MS reference levels) may restrict scope
- in any case: not all potential bio-economy demands can be met from the forest - or any biomass resource. (Wood demand from bio-energy is already huge, those from bio-chemicals, bio-materials & bio-textiles likely to be v. high and & strong):
How to use the EU’s wood biomass recources more efficiently & effectively, increasing the competitiveness of the forest-based value chain? Cascading?

9. Wood in the Circular Economy:
Circular Economy wood biomass
Wood in the Circular Economy:
(CE = « economic system in which the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimised »
wood is renewable, recoverable, re-useable & recyclable, including as bio-energy, which itself has diverse forms of delivery
thus wood has high potential in the Circular Economy but higher recovery rates and better separation are needed, including through “eco-design” and de-construction So, wood is good, BUT:
wood has to compete in products on a functional and materially neutral basis (NB Competition Policy, Construction Products Regulation: CPR).
So, higher levels of wood use in the Circular Economy (e.g. building, cascading) requires a functionally based approach to sectoral policy-making & wood supply at national and regional levels 9 9

10. Circular Economy & Bio-economy
Inter-relation of Bio-economy & Circular Economy: need for fresh wood into EU market as basis for
ambitious recovery and recycling targets
- The Council conclusions on the CE call for guidelines on cascading of biomass. These should:
focus on wood biomass (primary and secondary), be founded on principle of promoting resource efficiency through addressing market distortions & failures.
In this context, various levels of complexity of cascades could be considered, taking into account varying conditions across the member states as to: biomass availability, market outlets, logistics, investment, etc.
National & regional bio-economy strategies vital!

11. GUIDANCE RESEARCH Circular Economy Sustainability
Circular Economy Action Plan (CE-AP)
'The Commission will promote efficient use of bio-based resources through a series of measures including guidance and dissemination of best practices on the cascading use of biomass and support for innovation in the bioeconomy.'
GUIDANCE
RESEARCH

12. Cascading: Objectives
Based on the requirements of the Circular Economy, DG GROW has developed, together with other EC services, the following objectives for cascading:
Align the understanding of the cascading use concept but only a working, not strict definition
Stimulate progress in the Circular Economy by optimising “cascading” of wood
Optimise the mix of uses for material and energy purposes (i.e. under given sets of constraints)
Harness existing research findings and identify gaps in value chains where further research would be needed and should be supported

13. Guidance on the cascading use of biomass:
Csacading: scope
Guidance on the cascading use of biomass:
Non-binding, aiming at knowledge sharing
Economic value-chains (forestry, mobilisation, utilisation, recycling – where to begin value chains?)
Considerations of ecosystem services: carbon sequestration, frequency & intensity of harvesting etc.
Value-chain vectors (e.g. solid wood, pulp & paper, biorefineries)
Re-shaping linear-economy structures towards circular ones and allowing further gains in resource efficiency by the use of digital and engineering technologies
Principles valid for all biomass, but operational guidance on woody biomass to be deloped in the first instance.
GUIDANCE

14. Cascading: Policy links
Circular Economy Action Plan (e.g. monitoring, waste, plastics)
Bioeconomy Strategy 2012 and its review (on-going)
The New EU Forest Strategy 2013
LULUCF (land use, land-use change and forestry)
Recast RED II (renewable energy directive)
Energy Governance
ILUC (indirect land-use change)
Natura 2000 Action Plan
Trade policy
R&D&I
Other policy links?

15. Cascading: Definitions
EC 2012 Bioeconomy Strategy (SWD): Biorefineries should adopt a cascading approach to the use of their inputs, favouring highest value added and resource efficient products, such as bio-based products and industrial materials, over bioenergy.
EC 2013 Forest Strategy: In the forest sector, resource efficiency means using forest resources in a way that minimises impact on the environment and climate, and prioritising the forest outputs that have higher added-value, create more jobs and contribute to a better carbon balance. The cascade use of wood fulfils these criteria. In some cases, different approaches may be necessary, for example in cases of changing demand or environmental protection.
Footnote 9: Under the cascade principle, wood is used in the following order of priorities: wood-based products, extending their service life, re-use, recycling, bio-energy and disposal.
DG GROW, Cascades Study 2016: 'the efficient utilisation of resources by using residues and recycled materials for material use to extend total biomass availability within a given system'.
NB only a simplified working definition will be used to help develop the good- and best-practice guidance. However, it will not be binding or final.

16. Cascading: Knowledge Base
Studies on cascading (DG GROW, CLIMA, JRC …)
Numerous FP7 and Horizon 2020 scientific studies on various aspects of cascading
data improvement;
technological developments;
extended involvement and mobilisation of stakeholders, especially SMEs.
Bio-based Industries - Joint Undertaking (BBI-JU)
Member States' projects on cascading
International studies on cascading (IEA, UNECE)
What other knowledge sources?
Please send us

17. Cascading: Target Audience
National, regional and local authorities
Forest owners
Industry (e.g. harvesting, woodworking, packaging, paper and pulp, biorefineries)
Waste management, collection & recycling
Trades unions
Consumers
Financing and insurance
Who else?

18. Consultation Communication Communication Which other stakeholders?
Members of the Expert Group on Forest-Based Industries & Sectorally Relevant Issues (incl. woodworking, pulp & paper mfg. and converting, social partners, forest owners, MS, researchers; NGOs)
Bio-Based Industry- Joint Undertaking (BBI-JU/ SC), EIP Raw Materials, the Standing Committees on Agricultural Research (SCAR) and Forestry (SFC) and CEN
Biomass Industry (Biotech, bioenergy, waste)
Other NGOs (environmental, trade unions, consumers)
International bodies (UNECE, UNEP, IPR, WRF, OECD, IEA)
Communication
Develop accompanying Communication and Dissemination strategy
Which other stakeholders?

19. Process
1st ISG meeting
F-BI EG meeting
Consultation: Internal, Stakeholders, International
Set up a repository of best practices
Draft Outline and Best Practice Areas
2nd ISG meeting
Stakeholder Workshop
3rd ISG meeting
16/01/2018
22/01/2018
January - March
March
End March
April 13th
May 17th
Beginning June
Draft Guidance is to be ready before summer break. The consultation and adoption will take place in the second half of 2018.

20. EU Wood flows
EC 2016 CASCADES - Study on the optimised cascading use of wood

21. UKRAINE: EC-MS Expert Team to look into reform of the forest-based sector:
EU TAIEX Expert Mission has been asked to support the Ukrainian authorities in institutional reform of governance of the forest-based sector.
Key principles:
Separation of functions of forest: policy development, control and management, so as to limit conflict of interest;
Transparency, internal and external accountability, public oversight;
Initial fact-finding mission October 2017;
Follow-up and initial proposals February 2018.
Member states are invited to submit relevant info.

22. Diolch yn fawr! Thank you!
Jeremy WALL
DG GROW C.2 - Raw Materials and Resource Efficiency