Summary
¦ Ireland’s roundwood supply is predicted to rise to 6.5 million m³ by 2028.
¦ Most of the increase will come from the private sector.
¦ Demand is forecast to rise from 3.6 million m³ to 6.3 million m³ in the next 10 years.
¦ Improving road access to private forests is essential.

COFORD’S forest industry development work has three focus areas: afforestation; roundwood supply; and roundwood demand.

The COFORD Roundwood Supply Group has clear objectives: to determine the potential supply of roundwood and forest harvesting residues available on the island of Ireland annually to 2028; to optimise wood harvest; and to address any constraints.

Provisional indications are that the all-Ireland potential roundwood supply will increase from 3.8 million m³ at present to 4.7 million m³ by 2020 and 6.5 million m³ by 2028. Most of the increase in supply will come from the private sector.

These figures are a combination of the official forecasts of Coillte and the private sector in the Republic of Ireland (ROI), and the Northern Ireland Forest Service (NFIS) and the private sector in Northern Ireland.

NFIS supply is going to remain relatively stable at around 500,000m³ per year, while the private element of Northern Ireland is very small at less than 20,000m³ per year. In the ROI, Coillte’s output over the period is also going to remain relatively stable at around 3 million m³, while the biggest increase is forecast to come from the private sector which is set to grow from 500,000m³ in 2010 to 1.5 million m³ in 2020 and to 3 million m³ by 2028.

On the other side of the coin, the objectives of the COFORD Roundwood Demand Group are to determine the likely level of demand for roundwood, sawmill co-products and harvest residues on the island of Ireland on an annual basis from 2009 to 2020, and to identify policy and market issues that are likely to impact on demand.

Over the last two years the group has estimated future wood demand on the island based on a survey of sawmills and board mills, taking into account current demand and assuming normal market conditions going forward.

Energy wood demand in the ROI has been estimated by the Sustainable Energy Authority of Ireland. In Northern Ireland, demand was estimated for COFORD by Drima Marketing Consultants.

Energy demand is predicted to rise from 800,000m³ in 2010 to 2.7 million m³ by 2020 (this prediction is based on Ireland’s target of 16% renewable energy by 2020). Conventional demand – sawmills and board mills – will rise from 2.8 million in 2010 to 3.6 million by 2020. Total roundwood demand, therefore, will rise from 3.6 million m³ this year, to 6.3 million m³ in 2020.

As the biggest growth in demand is foreseen as being in the energy sector we can address this in a number of ways: we can harvest more of the tree during thinning and final felling; we can increase the level of afforestation and short rotation forestry over the coming decade; and we can import.

Although at present the overall level of supply and demand is in balance, the actual net level of supply of suitable material needs to be qualified, particularly for the sawmilling sector. This is a real commercial issue for sawmills, who are clamouring for suitable material. The larger forest industry needs to address this with some urgency.

At the more strategic level the COFORD Roundwood Supply Group is seeking ways to address infrastructural issues. In the medium to long term we must mobilise the private sector supply as much as possible, to bring more competition to bear and to avoid inflating log prices to unsustainable levels. Even if we bring the wood to market cost-effectively, there will still be a growing shortfall in supply over the coming decade and for the foreseeable future. At a peak in 2018 there will be a theoretical shortfall of almost 2 million m³ – but this could be much higher if the wood is not accessed.

Most of the private forest estate has been established over the past two decades and a sizable proportion has entered the thinning stage during the past five years. However, road access is limited so it is key that the Forest Service roading grants continue and are expanded to meet the increased level of demand. Having said that, when capital investment by the state is under severe constraints, we may need to rebalance the allocation between afforestation, thinning and investment in roads. Does it make sense to continue to expand the private forest estate when a significant part of what has already been grant aided needs state investment to bring wood to market?

Getting wood to market has been greatly helped by the COFORD-funded FORECAST project, which provides information on forest location and roading infrastructure. The software can also forecast roundwood production to 2028 from privately-owned forests for any geographic location in the country.

Likewise, the CLUSTER project now provides tools to enable clustering of forest properties to optimise wood supply in certain areas. Information on ownership will greatly enhance the FORECAST system and the Forest Service currently has a pilot project on providing ownership information on request.

The costs of moving machines to harvest a thinning of 100-200m³ are difficult to justify. Teagasc (the Irish Agriculture and Food Development Authority) is working hard to establish owner groups to create larger parcels of wood and long-term supply platforms, but we also need to mobilise private and additional public sector resources to enable long-term supply contracts with growers.

Better information, producer groups and increased private and public sector investment need to be further developed and accelerated to enable the forecast wood supply to flow over the coming decade. We need to unlock the potential – and enable a “can do” approach across the state agencies and the private sector. If we have the right policies in terms of demand and supply dynamics, the private sector will respond.

However, addressing infrastructural problems is just one part of the jigsaw. If wood supply is to increase, it needs to be priced at a level that gives a return to both the private and public sectors.

COFORD is Ireland’s National Council for Forest Research and Development.