The global demand for wood fibre will escalate as the development of biomaterials evolves and that’s going to lead to supply shortages and fierce competition for fibre, says a PricewaterhouseCoopers report.
May 4, 2011
by PLANT STAFF
VANCOUVER: The Canadian forest products industry is going to see a dramatic increase in global demand for wood fibre as the development of biomaterials evolves. That’s going to lead to supply shortages and fierce competition for fibre, says a report from PricewaterhouseCoopers (PwC).
The Canadian branch of the global consulting company says demand for some types of paper will decrease in the next decade but many other uses for wood fibre will drive global demand, which will outpace supply and competition for fibre will be key to future supply chains.
“Companies from a diverse array of industries – energy, utilities, chemicals and potentially many more as biomaterials evolve – will compete with forest paper and packaging companies for control of forests, or at least access to their fibre, and the best economic use of the resources they provide,” said Bruce McIntyre, PwC’s Canadian forest, paper and packaging leader in Vancouver.
The Growing the Future http://www.pwc.com/gx/en/forest-paper-packaging/publications/new-values-directions-technology-fibre-competition.jhtml report finds that many of the existing mills in North America and Europe won’t be needed for newsprint or printing and writing paper, but growing populations and wealth will mean more fibre is needed. Based on current policies, the EU will need up to 420 million cubic metres of woody biomass per year solely for energy purposes by 2020. PwC said that kind of demand could lead to a forest fibre deficit of 200 to 260 million cubic metres by 2020.
China also has a large fibre deficit, so pressure to secure access will grow to achieve its 2020 goal of 20 million hectares for additional woodland planting to fuel bioenergy projects. PwC said in 2009, China imported over 100 million cubic metres – roughly as much as Canada’s entire timber harvest in that year.
McIntyre said fibre demand will increasingly be met by planted, not natural forests.
“Many of these (natural) forests are economically inaccessible or are sensitive to disturbance. Instead, they’re going to be valued for their conservation benefits and that will result in restrictions on industrial wood output,” he said.
Planted forests currently cover approximately 272 million hectares or 7% of the world’s total forest area. The World Business Council for Sustainable Development estimates that the yield and harvest from planted forests will need to increase threefold by 2050, with planted land-area increasing 60%.
Plantations are not without critics. They’re blamed for displacing local people, replacing natural timber stands and damaging local water tables. But McIntyre said they still represent the “single best opportunity” to meet increased demand for forest products without damaging ecosystems, provided planting is done responsibly and balanced with conservation programs.
Fred Bouchard, managing director and Montreal leader of PwC’s forest, paper and packaging practice told PLANT Western Canada is probably better positioned to take advantage of the anticipated global demand of fibre in the short term because of the excess wood available due to the pine beetle.
“Eastern Canada’s distance from countries with growing demand and recent reductions in cutting rights and high prices of fibre compared to fast-growing regions with plantations that have a highly competitive wood costs, makes it difficult to take advantage of global demand,” he said. However, PwC estimated in its last “Growing the Future” publication that 18% of the world’s growing fibre stock is in North America. “We believe that Canada will always be a player responding to future demand for quality fibre.”
PwC anticipates new ways to access fibre, such as international fibre exchanges and a biomass aggregation industry. There will also be a focus on using fibre more efficiently and technology, but the report says businesses that control or have access to “competitive sources of fibre” will be the best positioned for growth.