The chamber of commerce, employers' confederation and unions on Tuesday morning urged the government to relax restrictions on the use of natural resources in light of the war in Ukraine. This prompted Minister of Foreign Trade and IT Andres Sutt (Reform) to propose temporarily hiking felling volumes a few hours later.
"The war in Ukraine and the necessary sanctions it has caused have left Estonian companies short on materials that is mainly a risk for the forestry and timber sector and companies therein," a joint address by the Estonian Chamber of Commerce and Industry, the Estonian Employers' Confederation and the Trade Unions Confederation sent to PM Kaja Kallas reads.
"The fastest and most effective way to alleviate the situation would be to relax restrictions on the use of domestic resources, especially timber, which needs to be done immediately," representatives of employers and unions emphasized.
"In the current situation, where necessary sanctions have reduced or blocked deliveries of timber and metals from Russia and Belarus, the government will have to make rapid decisions to allow our companies to retain recent production volume and minimize damage to the Estonian economy in an already turbulent situation," Mait Palts, head of the chamber of commerce, said. "Warehouses are already empty and statesmanlike decisions needed post haste!"
The undersigned also write that the forestry and timber sector directly or indirectly employs 56,000 people or almost every tenth worker in Estonia, and that these jobs are especially crucial in rural areas. Head of the trade unions Peep Peterson said that, luckily, Estonia has enough timber, smart use of which, coupled with if only a temporary alleviation of restrictions, would help the Estonian economy during difficult times and to avoid already inevitable price advance.
The address reads that mounting domestic restrictions and uncertainty in terms of availability of raw materials, caused by lower felling volumes, Natura 2000 and, often insensible, nesting season logging restrictions, have forced Estonian companies to import more of the raw materials they need, while a third of timber needed by Estonian industry was imported from Russia or Belarus.
Wood is used, in addition to the forestry and timber sector, in construction, furniture manufacturing and district heating, meaning that the raw material deficit goes beyond a single sector.
For example, shortages of wood chips and biomass force district heating plants to use Russian gas or compete with the local timber industry for resources to make sure people have heat. This would deepen the effects of the crisis for industry and result in a considerable heating price advance, the press release holds.
The three organizations' proposals to the government:
1. Review felling volumes in state forests that were dialed back by outgoing Minister of the Environment Tõnis Mölder and increase the volumes in accordance with the initial proposal that considers the principles of sustainable management of forests.
2. Provide a rapid and clear time frame for the spring nesting season that would allow logging to continue in necessary volumes.
3. Task the State Forest Management Center (RMK) with continuing spring felling in pine woods and cancel the 14-day state forests felling break extension, sticking instead to recent practice.
4. Analyze whether additional support measures are needed to reduce the weight of natural gas in district heating and increase the share of biomass.
5. Additional analysis should be carried out concerning measures that could help alleviate companies' soaring expenses on energy, fuel, fertilizer and other production inputs. The analysis should consider allowing fiscally marked fuel to be used in private forest management and lowering the excise duty on agricultural diesel to the level of Latvia and Lithuania.
These measures can be taken while still observing conservation goals, the organizations emphasize.
The undersigned also include the Estonian Forest and Timber Industry Association, Estonian Construction Entrepreneurs Association, Estonian Woodhouse Association, Estonian Furniture Manufacturers Association, Estonian Private Forests Association, Estonian Power Plants and District Heating Association, the Estonian Chamber of Renewable Energy and the Estonian Peat Union.
Ministry proposes temporarily increasing logging volume
Minister of Foreign Trade and IT Andres Sutt (Reform) has made a proposal to the Ministry of the Environment for temporarily increasing felling volumes to alleviate raw materials shortage caused by Russia's war on Ukraine and the resulting sanctions and uncertainty, the Ministry of Economic Affairs and Communications said on Tuesday.
Sutt said in the press release that Russia's aggression has created a raw materials shortage and hiked energy prices that affects the everyday operation and competitiveness of companies.
"In a situation where we are short on materials, we can support our companies by temporarily boosting the use of local resources. One such resource is timber, and temporarily boosting felling volumes would help cover the needs of the timber, furniture and construction sectors, ensure continued competitive ability of the forestry and timber sector and alleviate the effects of the crisis," Sutt added. The forestry and timber industry exports ca 900,000 cubic meters of sawn timber and imports ca 1,1 million cubic meters from Russia and Belarus. "Because wood products' exports and imports are different, it would be insensible to try and compensate for imports shortage at the expense of export," the minister explained.
Sutt emphasized that even though the green turn and environmentally conscious management are key looking to the future, temporarily relaxing environmental targets would help the Estonian economy to more successfully weather the crisis without harming long-term goals.
"That is why we are asking the environment minister to review current felling volumes and forestry restrictions to support Estonian forestry and timber companies," the minister wrote, adding that nesting season restrictions should also be reviewed and the Estonian Forestry and Timber Industry Association involved in the process.
Editor: Marcus Turovski