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**Certified Forest Products Market Trends: Insights from the UNECE Timber Committee**

Delve into the latest developments in the certified forest products market with a focus on supply, demand, and future trends presented at the UNECE Timber Committee's Sixtieth Session in 2002 by Keith Forsyth. Explore the geographic distribution of certified forest area, supply drivers, market barriers, key markets, customer motivations, and expected market growth. Gain valuable insights into the challenges and opportunities shaping the global market for certified forest products.

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**Certified Forest Products Market Trends: Insights from the UNECE Timber Committee**

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  1. Certified Forest Products Markets UNECE Timber Committee Sixtieth Session 24th September 2002 Keith Forsyth www.VELUX.com

  2. Certified Forest Products Markets: Presentation Overview • Area of Certified Forest • Supply of Certified Forest Products (CFPs) • Demand for Certified Forest Products • Future Market Developments

  3. Area of Certified Forest (1993 to mid-2002) Certified area mid-2002 = 124 million ha (approx 25% increase)

  4. Area Of Certified Forest:Geographic Distribution • 90% of certified area in northern hemisphere • Approximately 50% of certified area in Europe and 40% in North America. • Developing countries (world-wide) account for less than 10% of total forest area certified. • In 1996 developing countries accounted for approximately 70% of total forest area certified.

  5. Area Of Certified Forest:Geographic Distribution, Top 8 Countries

  6. Supply of Certified Forest Products

  7. Supply of CFPs:Geographic Distribution

  8. What Drives Suppliers? • Market Access • ENGO Pressure • Market Demand • Government Support • Social Responsibility • Expected Premiums

  9. 80% certified material (mixed) No certificate. No CFPs. 40% FSC 40% PEFC The CFPs Market: SupplyAvailability? • Estimated 234 million m3 of certified wood produced in 2002, roundwood (source: Atyi & Simula 2002). • Small fraction actually traded as certified. Why? • Processors unable to label product • 70% needed for C-O-C under one certification scheme.

  10. 60% certified 85% certified No certificate. No CFPs. 70% certified , unless ‘batch’ The CFPs Market: SupplyAvailability? • Small fraction actually traded as certified. Why?

  11. The CFPs Market: SupplyAvailability? • Chain-of-custody certificates (mid-2002): • 2,014 companies issued with FSC C-O-C world-wide (1 per 14,300 ha). • 142 PEFC C-O-C certificates world-wide (1 per 303,400 ha). (Increased to 260 as at Sept 2002). • SFI and CSA currently do not label. • Supplied into 20 countries in UNECE region. • FSC labelled product reportedly available in 14 UNECE countries • PEFC labelled product reportedly available in 7 UNECE countries

  12. Supply: Barriers to Development • Limited implementation of chain-of-custody. Need for increased use of chain-of-custody certificates throughout supply chain. • Mutual recognition? • Increased costs. Lack of price premiums. Many companies focusing on costs and profitability.

  13. Demand for Certified Forest Products

  14. Most Important Markets for CFPs, 2002 • Main market is Europe, (although low interest in Southern and Eastern Europe).

  15. CFPs: Market Share • UK: • Estimated approximately 10% of total wood consumption and 1% of paper consumption. • Netherlands: • Estimated approximately 7% of wood consumption. • Europe: • Less than 5% of wood consumption (mid-2002).

  16. Most Important Customers for CFPs

  17. What Drives Customers? • Image Enhancement • Competitive Advantage • Options for Consumers • Risk Aversion • Social Responsibility

  18. Factors Limiting Market Development • Lack of Premiums • Limited Demand • Limited Industry Involvement • Lack of Supply • 50% of respondents rated ‘Lack of Supply’ as an important factor. • All four factors were considered to be ‘relatively important’ by respondents.

  19. Future Market Developments

  20. Future Market Developments • Market for CFPs expected to grow. Some industry observers propose growth of 50-100% during the next year. • Moderate growth expected amongst retailers. • Significant growth expected in construction industry for some products (for example, flooring). • Governments expected to become increasingly important players as they specify certified timber.

  21. Future Market Developments • Chain-of-custody certificates expected to grow significantly • Particularly PEFC (reduction in hectares certified per C-O-C certificate) • Consumer awareness likely to increase as chain-of-custody certificates increase. • Availability will increase. • Geographic spread will increase: CFPs will become available in more countries. • Price premiums: achievable in some niche markets. • Mutual recognition: common ground?

  22. Certification Reports/Market Information Available: • FOREST CERTIFICATION UPDATE FOR THE UNECE REGION, SUMMER 2002 • UNECE/FAO FOREST PRODUCTS ANNUAL MARKET REVIEW, 2001-2002 • CHAPTER: Markets for certified forest products • Both available at: • http://www.unece.org/trade/timber/Welcome.html

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