Think Forest seminar: Forests and the bioeconomy: future steps

Ladies and Gentlemen,

Thank you for inviting me to this event here in the European Parliament. We are addressing the role of the forest sector in the bioeconomy. I would rather put it this way – forestry is bioeconomy. Managing natural resources, particularly forests -  and particularly in Europe, will be important for the development of the economy, employment, energy security and  the environment . The fragmented policies  established at European level so far is not sufficient for such a crucial endeavour. 

Forestry is in its nature a long-term enterprise. Due to this, we have to have the long perspective on our actions. Regardless of the discussion of management practices, we need to establish a solid basis for our understanding of what are the elements and priorities of sustainable forest management. Valuable work in this regard has been done by the pan-European cooperation Forest Europe. 

One of the interesting things I have learned during my time as minister for forests is - all that can be made of oil can also be made of wood. This is what the transformation to the Bioeconomy is about: substituting non-renewable resources with renewable resources, and to secure a sustainable economic development for the future.

The fact is that the Norwegian industrial development  was built on timber. The 15th century forest sector in Norway had a high degree of innovation, which the sector profited from in centuries to come. A high level of innovation is still present in Norwegian forest industries. One example is the biochemical company Borregaard. Borregaard is in the upper league of wood processing globally. The development of new products based on the same raw material is impressive.  In 2013, 18 % of the turnover of this company comes from products which did not exist 5 years ago. It is my ambition that we now are able to return to our innovative past by continuously developing our renewable forest resources for the future needs and benefits. “Back to the future” will get another meaning when forest products again will increase its market share. 

The forest sector needs to be profitable. All other benefits from forests depend on the ability to make the sector profitable. Innovation, research and more efficient ways of managing our natural resources will be needed. I have noticed that the Commission acknowledges the bioeconomy as a part of the solution and that the topic has a central place in Horizon 2020. I am confident that Horizon 2020 can contribute to a paradigm shift in our research activities in the sector. I am satisfied with the fact that Norway is an active participant in this effort. 

The EU is the main trading partner for the Norwegian wood processing industry. 90 % of the production is exported, largely to the EU. This means that the development in the European forest sector also is important for Norway. Norway is a country with rich forest resources.

We harvest less than 50% of the annual increment in our forests, among the lowest levels in Europe. We are able to increase our felling within responsible limits, and this also means that we can uphold the level of export to the EU at the same time as we increase our domestic production based on biomass from forests. Knowing that forests in Europe provides nearly half of the renewable energy in the EU, the Norwegian forest sector can also play a role in reaching the ambitious targets for renewable energy. These goals will not be achieved without forest biomass. 

The forest sector and the forest industries in Norway face serious challenges. Similarly does the sector in many other European countries. Several wood processing factories in southern Norway has closed down during the last years. Due to the changes in the industrial structure, the Norwegian export of timber has increased during the last two years. 

The forest sector as a whole is a value chain important for economic development and employment. A shift from a highly developed industrial sector into a raw material supplier to Europe is not an acceptable development for the forest sector in Norway.   To fully utilise the potential of the forest sector, it needs to develop and change to meet the market needs in the future bioeconomy. In 2013 the Norwegian government established a strategy group named Skog22 – (Forest22) to facilitate this transition.  The aim of this group is to develop a holistic strategy for the wood based value chain. The strategy should encompass research, development, innovation and communication of knowledge. The strategy shall also include other tools for the strengthening of the competitiveness of the forest sector. The goal of the strategy is to contribute to the development of the forest sector towards a sustainable economy. The interdependence within the forest sector is strong. The wood processing industry depends on the existence of sawmills, and of course the forest owners depend on both for selling their timber. Cooperation is therefore the key to success. 

The forest sector needs to be constantly looking for new and innovative ways to develop their business in order to be competitive in current and future markets.  The temptation to point at the governments for the solutions will always be there. This time, however, we will not succeed unless the sector itself is able to evolve and develop. This can only be done by cooperation on the one hand, and competition on the other. 

Sustainability is a concept building on three pillars; economy, environment and social aspects. Following this, a sustainable forest sector need to be economically viable. Without a solid economic base it is not sustainable. Private enterprises are the key to develop the forest sector. The role of the government is to provide a framework that can be conducive to the private initiative and supportive to an effective and functioning market for forest goods and services. 

The newly appointed Commissionaire of Agriculture and Rural Development in the European commission, Phil Hogan, during his appearance in the European parliament hearing repeatedly pointed out that 60 per cent of the European farms are less than 5 hectar in size. He pointed at something of outmost importance; the structure of properties. This is an important element of the efficiency both in agriculture and in forestry. 

In Norway more than approximately 80 % of the forest properties are privately owned, and the larger part of these properties are small. The average size of a forest property in Norway is 6 hectar. There are few large, industrial forest owners in Norway. A more flexible market for properties in agriculture and forestry is needed. For this reason I have sent a proposal to the Norwegian Parliament on abolishing the law on concessions for agricultural properties. The abolishment of these rules will make the trade in agricultural property easier, and most importantly – it will give every owner of agricultural property the right to manage their properties according to their own priorities. 

These changes will be important for the forest sector. It will make it easier to create more efficient forest properties. Increased activity in the forest sector is an important goal. As minister for forestry I have strengthened the incentive for developing the infrastructure in the forests by increasing the amount of state aid available for forest owners for this purpose. The forest sector highlights developing of the infrastructure as the most important element for securing a viable and profitable forest sector in Norway. 

Development towards bioeconomy represents great opportunities for the forest sector. It will be decisive for the development of this sector in different countries to what extent this opportunity is utilized. 

The current status of our forest provides opportunities for increased use of biomass for energy, to substitute more energy demanding construction material by wood, create employment opportunities - and to enhance the environmental values of our forests.

Norway has developed a policy and tools for promoting innovative wood products. This is an essential part of our forest policy. 

Norway has traditionally used wood as construction material, and wood is still the main choice for small houses. It is important to transfer the knowledge in this part of the construction sector to larger buildings – and especially multi-storey buildings. This is an important part of the innovative development of the Norwegian forest sector.

I would like to mention a project I had the opportunity to learn about some weeks ago. In Bergen in Norway the world’s highest wood building is under construction. This is an example of the fact that we do not know the limits of what purposes this renewable material can be used for.

Today, European Forest Institute will launch a study on the forest sector´s contribution to bioeconomy. I appreciate the work and effort of this study and I hope it can become an inspiration for all of us concerned about the forests, the industry, the economy and the environmental challenges facing Europe today. 

Thank you for your attention.