Future opportunities and challenges in the forestry sector

Like many elements of the UK economy timber is currently experiencing a dip in demand, with a corresponding price reduction, as the impacts of inflation and high interest rates hit the pockets of the UK public.

This dip belies the trend we have seen in recent years with double-digit annual increases in plantation values becoming the norm.

These increasing values are underpinned by increasing confidence in the long-term value of timber and the place that timber and biomass will play in the future both within the UK and globally. Timber as a commodity is cyclical, but the trend in value is upward. Due to this it is likely that good quality plantations will continue to perform well financially, but pressure will come on pricing of poorer crops.

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In the UK we are forecast to have a decreasing availability of timber from the late 2030’s due to the impact of reducing forestry planting from the early 1990’s until recent years but timber has an important role to play in locking carbon in the built environment when we use it in construction and in substituting for materials that have a significantly higher carbon footprint, such as concrete and steel.

Recognising that, the UK government has targeted to have 40% of new builds per annum constructed with timber frame by 2050. The current figure is 18% per annum across the UK, with England sitting at only 9%. There is a significant change in attitude from house builders, specifiers, and buyers required to achieve this target.

But where will the timber come from? We currently import over 80% of all the timber we use in the UK and we desperately need to redress some of that balance and reduce our reliance on imported material.

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This is not only because of our trade deficits (£8.2bn in 2022) but also our overseas environmental/social impacts. The UK timber sector is highly regulated, the sources of much of the timber we import is not, and we need to be aware of our impacts elsewhere on the planet.

With the World Bank estimating that timber demand globally is set to quadruple by 2050 we must look after our own requirements as much as we can, whilst recognising we will never be self-sufficient. We need timber security now the same way we did when the Forestry Commission was set up in 1919.

In the UK, we have roughly 16.8 million hectares of land in agriculture, with almost 11 million hectares (65%) of this being permanent grassland .

The Committee on Climate Change’s report – Net Zero The UK’s contribution to stopping global warming – May 2019 outlined a “Further Ambition target of 30,000 hectares of new forestry planting per annum between 2020 and 2050”. This equates to some 900,000 hectares of new woodland, or roughly 8% of the UK’s grazing land.

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Targeting planting to less productive areas of farmland is more likely to increase on-farm efficiencies, and it would be reasonable to consider that this conversion of land to assist with the UK Government’s Net Zero ambitions could be achieved with no negative impact on food production.

Well-designed farm woodland should provide a positive benefit to livestock through provision of shelter increasing productivity, feed conversion and survival rates of young stock and easing stock management. At the same time this can add capital value to less productive or capital/input intensive areas of farm units.

We see this leaves space for appropriate and uncontroversial land use change into forestry and this is already happening, as 70% of all of the woodland planting schemes we carried out last year were for farmers and private mixed-use estates.

Objectives are often, but not always, based on commercial production. The balance is made up of productive and native broadleaf and designed open land providing space for long term habitat development and ecological enhancement.

Carbon insetting into the farm business is also a great opportunity, and surplus carbon could be sold. One barrier to this process is the recent changes to the Woodland Carbon Code, meaning that productive planting is less likely to achieve carbon credits. Whilst there is a balance to be found in perhaps taking less grant, or planting less commercial species this is already impacting the viability of certain types of agricultural land for planting and is having a corresponding impact on farmland prices.

We are currently caught up in an agriculture or trees debate, but we need to be planning for an agriculture and trees future by taking off the blinkers and looking at the wider picture by considering opportunities for land use change in upland UK.