A Finland Perspective
(07.07.03)

The Finnish Forest Industries Federation recently invited a group of journalists to Helsinki. In this article Steve Eminton looks at a number of issues including forestry and paper trends in Finland and the country is facing up to environmental pressures. Separately, we report on how a leading consultancy sees the outlook for recovered paper and look at how Finland has developed a recycling plant for used drinks cartons.

For Finland its forests are its natural resource. But, Finnish forestry is changing, in terms of ownership, environmental pressures and the need to import timber for the industry. The country also boasts some of the world's greatest papermakers with huge capacity, modern research techniques and a strength in diversification into new product areas.

Trends
There are a number of interesting data trends with regard to Finnish forests. The performance of the industry is often an indication of general economic trends and the difficulties worldwide over the past two years have impacted on the sector.

Overall forest industry production rose in Finland by 3.5% in 2002, making up for a fall of some 7% the previous year. But, the high production levels of 2000 were not reached.

2002 was a year of falling prices and surplus capacity in the paper industry, where capacity utilisation was 88%, up only one per cent on the previous year. Notably, however, pulp exports rose by one fifth, to 1.9 million tonnes, reflecting higher delivery volumes to paper mills owned by Finish groups in Europe.

The overriding factor behind Finland's forest industry, is emphasised by Pertti Laine, director of the Finnish Forest Industries Federation. This simple fact is that papermaking is more important than ever, even in an electronic age and that virgin fibres are needed as much as ever. On paperless offices, he says: "The opposite to what you might expect is happening. In the paperless office, paper is more alive than ever."

But, he does point to signs that there is a levelling off in demand in the west while Asia, Latin America and Eastern Europe in particular are swiftly increasing their demand for pulp and paper. Hence, the importance of Finland's contribution to European papermaking. It is responsible for putting in 14% of paper and paperboard production into Western Europe, coming second only to Germany which produces 20% with a substantial percentage of recycled material included. Finland's papermakers have invested in Germany: "Low recycling utilisation in Finland is one reason why the companies are investing in Germany and other countries."

The low recycling usage in Finland is because the country has a relatively low volume of paper to recover. Most of this is recovered and recycled but it does not economic sense under normal circumstances to transport recovered material from countries such as the UK, France or Germany. Mr Laine said that the transport costs would be 15% of the cost of making the paper, and there are environmental issues.

Ownership
Ownership structures now see only a small percentage of the forests owned by large companies and so recycling and environmental issues are increasingly being taken on-board by the country's government and environmental agency as well as the timber users.

About 61% of forests belonging to private individuals while 25% — mostly in northern Finland — belongs to the state. The balance is the hands of companies.

This means that the papermaking and wood products companies, such as Stora Enso, UPM-Kymmene and M Real have to draw up plans for harvesting the trees with a variety of owners. Traditionally families in Finland may well own a portion of the forests as a form of investment and considerable effort has to be made in negotiations with all concerned. Digital mapping is helping the process as it makes tracking specific areas of forests much easier to do.

Environmental Pressures
The big issue for Finland is its forest balance, keeping the balance between the amount of trees cut down and serving demand for material. One sign of change is that the country is needing to import more to make sure that it can maintain this balance. Over the past four years production has been relatively static, but there has been a steady increase in imports, particularly of birch wood, reaching a total of almost 16 million cubic metres in 2002. This compares to only 7 million cubic metres in 1993. In contrast wood raw material consumption within the Finnish Forest Industries has remained relatively static at about 70 million cubic metres per year.

As Mr Laine says: "We cannot manage without imports today." And, he gives a big reassurance on forest levels within Finland. "Finnish forestry resources are at their greatest for a century."

All the Finnish companies and their association representatives point to big efforts made in achieving certification standards for the forestry work and paper production with high environmental standards. Some 95% of forests in Finland — 21.9 million ha — have been certified and virtually all Finnish roundwood originates from certified forests. The Finnish Forest Certification System is used. The standard is endorsed by the pan-European Forest Certification Scheme and necessitates a chain-of-custody by which companies show that the roundwood used by them comes from certified forests.
There remains some concerns about standards and whether Finland should adopt other standards that exist in Europe. Greenpeace is critical of the environmental approach to old growth forests in Finland and within Russia, from where most of the imported wood is sought. The situation is confused by debate over the Taiga rescue maps which list many of the areas of forest which are old growth. But, again there is disagreement over how the maps should be applied and used.

There is debate primarily over what actually is an old growth forest and there is particular concern about the north of the country where standards have been agreed. Debate continues over whether enough of Finland's forests are in protected areas. In total 714,000 hectares of "productive forest land" are in reserves. The industry accepts that there is more to do in Russia and that there should be more reserves in the south of Finland as well.

In one environmental move, some of the forestry work now sees less "clear cutting". This is when a plot of land is completely stripped of trees. Instead, some trees are allowed to remain and Finnish term for this is "regeneration cutting". But to what extent leaving a few trees will help the environment in these locations is still to be fully determined. However, it would appear that the environment as an issue is now much higher on the agenda than it would have been in the 1990s for Finnish companies. The large papermakers are aware of the environment as an international issue and therefore there must be grounds for optimism that environmental work in Finland will be developed further.