“First stage conversion: we need to go farther and faster than the economic restart plan! ”

In the scope of the economic restart plan, 200 million euros are being released for forest regeneration, which is expected to boost the whole of the forestry & timber sector. But will this aid be enough to put timber producers and sawmills back on the upslope? We examine the situation with Caroline Berwick, deputy executive officer of the FNB (France's forestry and timber board). 

Caroline Berwick,deputy,
executive officer of the FNB

The Government’s economic restart plan sets aside €200m for forest regeneration. What are today's priorities in the sector?

This plan is vitally important. The aid will help sustain the sector for a year, perhaps two at the most. But forests are long term investments so perseverance is needed. The impact of climate change isn't limited to a few hectares; it affects vast forest areas. In-depth work must begin on the long-term viability and adaptation of forests. We must act quickly to deal with climate change, directing our efforts at the renewal of forest populations that have suffered successive droughts and bark beetle infestations, which appear tightly intertwined. It's one of the FNB's priority issues.

In late September, the forestry & timber sector held a protest outside the closure-threatened Fibre Excellence factory in Tarascon in the south of France. Why?

This is the other factor weighing down the competitiveness of first stage conversion businesses: that of alternative outlets for industrial timber and side products. The Tarascon case is a concrete example of this. The Fibre Excellence paper mill in Tarascon takes in over a million tonnes a year of industrial timber and sawmill offcuts. It represents the main outlet for forestry and sawmill side-products in the region. 300 businesses, which account for several thousand mostly rural jobs, are now under threat. A sawmill cannot continue operating with no outlet for its side-products, just as the Mediterranean forest cannot be tended without any income from its side-products, leading inevitably to fire risks. Today, the Fibre Excellence bankruptcy will leave €10m of bills unpaid, with dramatic financial consequences for the whole of the southern French forestry & timber sector, not to mention huge stocks of unsold material.

What alternative outlets are there for timber and related products? 

At the FNB, we are firmly convinced that first stage conversion must stop depending too heavily on the paper industries or on panel and board manufacture, which is also looking shaky. First stage conversion must aim to achieve maximum diversity of outlets for its side-products. To do so, we’ve been pushing the case for small CHP plants in sawmills for years. These would enable sawmills to produce electricity and heating fuelled by their side-products and sell it to electricity suppliers, while using the heat in their industrial process. So far, the government has denied assistance to small CHP plants in sawmills, disallowing them as Energy Regulation Commission projects for being too small. And yet they have a notoriously high yield. They could become another resource and add a real dose of competitiveness to sawmills. On a 2-year horizon, pragmatically, resuscitating CRE sawmill projects is the only operational tool available for filling the demand gap, as long as the decision is made now. Failing that, the only alternative will be to stop some forestry exploitations with massive loss of the main renewable energy source in the energy transition, evacuating it by boat to Denmark or Sweden for peanuts.

Last question: the economic restart plan was announced in early September. Do you have any information yet on its implementation?

It's still a bit vague. We have not been told the exact process by which the aid will be implemented. And question marks hang over the origin of the released funds. Are they an “extra” or will they just be a substitute for existing measures? All I can tell you is there are several hypotheses doing the rounds: the aid could be materialized by swelling the funds of BPI France or else by reactivating the old ADIBOIS provisions for investment aid.  At the FNB, we are pushing for aid in the form of investment provisions.
All the leads are currently being explored, but we still don't know how what exactly that will mean for the companies. Each lead has its advantages and drawbacks. The FNB, as is its wont, will advocate for the implementation of means suited to the realities of the timber industry, while for example discouraging thresholds, which could penalize small projects, or the imposition of higher interest rates than those usually practised.