Restructuring promotes forest industry modernisation

Having spread from North America to Europe, the restructuring of the forest industry has brought about major changes in the Finnish industry, with some very visible results. Anne Brunila, President and CEO of the Finnish Forest Industries Federation, points out that the restructuring, though partly painful, is vital for the future of the industry. According to Ms. Brunila, there are good prospects for an improvement, provided that the industry's cost development can be brought under control and markedly slowed down (article on pages 10-12). Ms. Brunila is fretting over the rocky progress: whenever the industry manages to reduce costs in one area, pressures emerge somewhere else. The emissions trade and domestic energy tax solutions have further added to the cost pressure. For example, the Finnish forest industry pays 60 million euros in electricity tax, whereas the competing Swedish industry is subject to no such tax. According to Ms. Brunila, the EU's target to triple the share of renewable energy by 2020 threatens to distort competition in the wood market. If member countries grant subsidies to electricity and energy producers, their ability to pay for wood improves, which distorts the wood market and impairs the availability of wood for processing. Cost-effective and sustainable means to promote the use of renewable energy include directing incentives to production of biomass, development of new technologies and investments, Ms. Brunila points out.