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# 52013SC0343

**COMMISSION STAFF WORKING DOCUMENT A BLUEPRINT FOR THE EU FOREST-BASED INDUSTRIES (woodworking, furniture, pulp & paper manufacturing and converting, printing) Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A new EU Forest Strategy: for forests and the forest-based sector /\* SWD/2013/0343 final \*/**

  

Table of contents

I. Introduction.. 3

II. Sectoral economic outlook.. 6

III. Sectoral
technological outlook.. 13

IV. EU
Forest-based Industries (F-BI) by sub-sectors: 19

a)
WOODWORKING INDUSTRIES. 19

b) FURNITURE
INDUSTRY. 21

c) PULP &
PAPER MANUFACTURING AND CONVERTING INDUSTRIES. 23

d) PRINTING
INDUSTRY. 25

V. Detailed
description of challenges faced by the EU F-BI and remedial initiatives. 27

VI. Conclusions. 40

I.
Introduction

The EU
Forest-based Industries - EU F-BI[1]
- are taken to include: the woodworking industries; the furniture industry; the
pulp & paper manufacturing and converting industries, and the printing
industry. Together, they represent about 7% of EU manufacturing GDP and nearly
3.5 million jobs. The EU F-BI thus form an important part of
the EU’s manufacturing industry and their growth can
help achieve the goals of the EU’s Industrial Policy[2], including the
aspirational goal of raising manufacturing industries’ contribution to EU GDP
from 15.3% (2012) to 20%, i.e. the
“reindustrialisation” of Europe.

Through
their value chains (see below), the EU F-BI extend upstream into a sustainable and
increasing EU forest resource, which must be healthy and resilient to provide a
stable foundation for wood growth and other functions. Downstream, they link
into an array of industrial and consumer applications for their products. Their
main raw material, wood, is a natural and renewable raw material which is
re-usable and recyclable, thus having enormous potential to contribute
positively to the EU’s 2050 goals, such as to provide a high standard of living
from lower levels of energy and resource consumption, so long as it comes from
sustainable forest management. Around 90% of the initial wood raw material
input to the EU F-BI comes from EU forest, all of which are subject to
member-state law requiring sustainable forest management. Of the remainder, most
comes from Russia and other neighbouring countries, as well as N. America and very
small amounts of tropical woods. The last two sources provide mostly hardwoods.

However,
EU-grown wood is becoming increasingly sought after through growing competition,
already from bio-energy and in the future from the emerging bio-based
industries. Although wood prices fluctuate, any increases further squeeze thin
margins which cannot be compensated elsewhere. For example, the F-BI’s other
raw materials are often imported and hence prone to price volatility. Their
bought-in process energy is more expensive and both their environmental and
social standards are higher than those of most global competitors. Demand for
“traditional” wood-based products, such as in construction and furniture,
remains depressed; consumption of some paper grades and printed paper goods is
declining in the face of electronic media and is only partially compensated by
increases for other formats such as printing on plastics and textiles.

As a complement
to the Commission Communication “A new EU Forest Strategy: for forests and the
forest-based sector”, this Staff Working Document (SWD) sets out descriptions
of the EU F-BI’s overall sectoral economic and technological outlooks,
sub-sectoral profiles of its four component industries. It then identifies the
set of major challenges facing them as a prelude to identifying a series of
remedial activities to help address those challenges. It is
thus a blueprint which seeks to address the sectoral issues in a comprehensive,
multi-layer manner, in order to help improve the global competitiveness of the
EU F-BI through: stimulating demand for existing and new, innovative products
in both the EU and other markets; stimulating resource and energy efficiency in
manufacturing processes and throughout the life cycle of products; encouraging
the adding of value to products whilst cutting the costs of production and
delivery to market. To underpin these initiatives, radical steps in innovation,
research and development for processes and products are needed, together with
education, training and skills development and their updating suitable for the
move towards the 2050 economy.

EU
Forest-based Industries: value chains structure

The rationale for the EU
forest-based industries (F-BI) is their direct or indirect foundation to a
greater or lesser extent on a common raw material: wood, which is derived for
the most part from sustainably managed EU forests. For
example, the woodworking industries (sawmilling, wood-based panels manufacture;
builders’ carpentry & joinery; wooden packaging and other wooden articles)
and pulp & paper manufacturing and converting, are clearly wood-based, even
though the latter get over half their “wood” raw material in recycled form.

However, whilst much
furniture contains wood, indeed it is that sector’s biggest material use by
volume, the furniture industry also uses many other materials and adds most of
its value through using design to produce consumer goods. Similarly, the
printing sector uses paper, a forest-based material, for printing books,
leaflets, posters and other documents, but these form only a small part of its
overall output which covers a range of materials and formats.  However, for convenience
and brevity, the term “forest-based industries”, abbreviated to “F-BI”, is retained
here as a convenient shorthand to cover all these four sub-sectors. Based on
these, four distinct but inter-linked F-BI value chains
have been identified, so as to include the F-BI’s emerging bio-economy component.
These do not necessarily conform to the four sub-sectors identified above but
rather show the linkages between them:

-
wood & wooden[3]
products: production of round & sawn wood, panels, other wooden products,
including wood fuels; cork processing;

-
furniture and furnishings of wood and other materials,
their components and by-products;

-
cellulose fibre[4] pulp, paper & paperboard
manufacturing and converting; printing and paper-media publishing; precursors
for textiles;

-
wood bio-refineries, refining ligno-cellulose[5] into: transport bio-fuels;
composite materials and chemical feed-stocks and products.

These
value chains should not be seen either as entirely parallel to one another or
in isolation from other economic sectors. Rather, they are inter-linked as a
matrix of activities and material and value flows, as can be seen from the
following diagram[6].

Figure 1: Wood raw-material flows within and
between the EU F-BI sub-sectors (woodworking, furniture, pulp & paper,
printing) and the bio-energy sector

Source: Indufor
study

II.
Sectoral economic outlook

There are differences between and within the
F-BI values chains as to company sizes, cost structures and productivity. Some
of their features are indicated in the following table.

Table 1: EU forest-based
industries - key structural statistics, EU-27, monetary
data in current basic prices, 2010-2011

F-BI sub-sector/ Parameter || Woodworking || Furniture || Pulp & paper manufacturing & converting || Printing || Total

N° firms || 184 000 || 130 000 || 21 000 || 120 000 || 455 000

N° jobs || 1 093 000 || 1 000 000 || 647 500 || 770 000 || 3 510 500

Production value (M€) || 115 702 || 92 000 || 168 000 || 85 535 || 461 237

Turnover (M€) || 122 264 || 96 000 || 180 000 || 88 009 || 486 273

Added value (M€) || 31 200 || 30 000 || 41 000 || 32 477 || 134 677

Source: Eurostat (sbs\_na\_ind\_r2), estimates (in italics)
by DG Enterprise and Industry

Three
of the four F-BI sub-sectors (woodworking, furniture and printing) are
dominated by SMEs and moreover micro enterprises, having
less than 10 employees each, with relatively few large firms and only a handful
of very large and multinational companies. In contrast, the pulp and paper
sub-sector is relatively concentrated with medium and large firms being the
norm and quite a few very large and multinational firms. However, the larger
firms are concentrated in pulp and paper manufacturing, whereas amongst the paper
and board converting side, SMEs are more common.

There
are also variations across the EU Member States as to both the absolute and the
relative importance of the F-BI
sub-sectors nationally, their consumption of F-BI products, and their export
performance. Some are net exporters of wood-based goods, others net importers
and yet others are both producers and traders, as shown by map below.

Figure
2: Map of EU-27 Member States as types of region for forest-based industries

EU Member States as types of region for forest-based industries (Source: Indufor)

These
differences explain why the effects experienced from the downturn have been
modulated across the MS and F-BI sub-sectors. However, the
financial and economic crises have only amplified the
decline of the F-BI’s share of EU manufacturing and of its employment that
could already be observed beforehand. For example, F-BI employment fell over the
whole of the period 2000-2011 (See Table 2), around 26% overall, but varying between
estimated 30% for furniture and 20% for woodworking, all far higher than the decline
in the EU manufacturing average of 14%, while employment for the economy as a
whole increased by 6%. Figure 3 depicts a drop-off in F-BI jobs over a whole
decade, but reinforced since 2008 by the downturn.

Table 2: Change in employment in the EU
forest-based industries, 2000-2011

NACE activities || Change 2000-2011 (%)

TOTAL - All manufacturing activities ||  - 14%

C16 - Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials || - 20%

C17 - Manufacture of paper and paper products || - 23%

C18 - Printing and reproduction of recorded media || - 29% (estimate)

C31-C32 - Manufacture of furniture; other manufacturing || - 30% (estimate)

Source: DG Enterprise and Industry on Eurostat
(nama\_nace64\_e)
(NB Printing strictu sensu is only C18.1)

Shown
graphically, as in Figure 3, the trend of declining employment is even more
evident and seems to be accelerating.

Figure 3: Employment in the EU forest-based
industries

Source: Eurostat (nama\_nace64\_e, sbs\_na\_dade, sbs\_na\_dfdn,
sbs\_na\_ind\_r2)

Table
3: Change in number of F-BI firms by sub-sector, 2003-2010

Year Sub-sector || 2003 || 2010 || Change (%)

Woodworking || 200 144 || 184 000 || - 16 144 (-8%)

Furniture || 149 772 || 130 000 || - 19 772 (-13%)

Pulp & paper ||   19 516 ||   21 000 ||  + 1 484 (+8%)

Printing || 131 434 || 120 000 || - 11 434 (-9%)

Total || 500 773 || 455 000 || - 45 773 (-9%)

Source: Eurostat

Despite
a very small increase in the number of firms in the pulp and paper sub-sector,
the overall F-BI trend since before the on-going economic and financial crises
is negative, with over 9% of sectoral firms closing over eight years. Even more
starkly, the F-BI share of overall EU GDP products has shrunk by about 30% over
the last decade (Eurostat).

To
overcome and reverse this downward trend, sustainable growth
is needed, which must be brought about through increased competitiveness. This
is a challenging prospect on both the supply and demand sides for the EU F-BI.

On the supply
side, more wood from sustainably managed EU forests would seem to be available
since only 60% or so of the annual growth is harvested.
However, EU harvesting costs are very high on a global scale, so increased wood
demand may be met more cheaply on the global market. When prices are driven up
by increasing domestic demand from competing end uses, including from the
expanding and often subsidised bio-energy sector, this can even be positive for
some parts of the forest-based sector value chains, such as forest owners and F-BI
revenues from by-products, e.g. sawmills which sell wood chips and sawdust to
the pulp, panel and pellet industries. However, overall, the wood raw material
costs increase (Figures 4 and 5) and most of the F-BI, especially the pulp
and wood-based panels’ manufacturers, cannot compensate either through
by-products or sales prices.

Figure
4: Global softwood sawlog price index, 2003-2013

Source: UNECE FPAMR 2013

Figure 5: Global wood fibre price indices, 1989-2013

Source: UNECE FPAMR 2013

The following
diagrams (Figures 6 & 7) project the competing demands for wood from the EU
woodworking products (WP), pulp & paper (P&P) and bio-energy sectors.
The second of these indicates that by 2016 (the Indufor study’s forecast
horizon) the EU will face a shortfall from EU sources of 63 Mm³ of RWE per
annum in trying to meet the EU renewable energy targets, as shown by the NREAPs (National
Renewable Energy Plans[7]).
Thus, if significantly more EU wood can’t be mobilised, imports must fill the
gap.

Figure 6: Total wood
raw material uses in EU-27 Mm3 (RWE[8])

Source: Indufor study (NB for P&P and
WP there is some double counting due to the “cascade” effect)

Figure 7: Change in wood raw material use in
EU-27
Mm3 (RWE)

Source: Indufor study

One source of such new
imports will be fast-growing forest plantations in Latin America and Southeast
Asia, which create a significant potential for increased and cheaper wood
supply, especially for competitors of the EU in the pulp and paper sub-sector. Thus,
to continue to compete globally, even new investments in forests and pulp production
by EU-based firms now tend to be in those regions. Meanwhile and in any case, wood
cost remains a significant part of variable manufacturing costs for wood-based
products, as shown by Figure 8.

At the same time, it
should be noted that the existing small but significant supply stream of
tropical wood to the EU, mostly hardwoods from developing countries, should not
be directly affected by the increase in EU demand for wood biomass for energy
and bio-based products, although those markets may offer opportunities for
wood-exporting countries. Even now, the EU is a relatively big market for such
countries and forest products often play a pivotal role in their economies.
Therefore, vigilance is necessary to avoid the possibility of unintended
consequences of EU policy changes, whether from renewable energy policies, the EU “Timber Regulation” (EU TR)[9]
or other such initiatives. In this context, the EU FLEGT Action Plan[10], including
the EU TR and voluntary partnership agreements (VPAs) with wood-exporting
countries, as well as other EU Development Policy measures seek to address
issues of this type.

Figure 8: Analysis of manufacturing costs between F-BI
sub-sectors.

Source:
Indufor study (NB “raw material” includes wood fibre and recovered paper)

After
wood, labour costs are very significant for the EU F-BI, especially in the
labour-intensive SMEs, as indicated by Figure 9, showing labour
costs for sawn softwood.

Figure 9: Sawmilling labour cost (2011)

Source: Indufor study

Up
to now, the EU producers have been able to compensate high labour costs through
high labour productivity. For example, the EU
labour productivity (by volume) for sawn softwood is the highest in the world,
as shown by Figure 10.

Figure 10: Sawmilling sector – labour productivity

Source: Indufor study

Figure
8 indicates that raw materials other than wood, of which the main ones are
listed under “raw materials” in the challenges section below, also represent
major cost components. Amongst these, energy is a significant cost item[11] for the F-BI,
especially for paper and wood products such as pellets. Whilst bark and
wood–processing residues can be used for heat process energy, e.g. for drying
by the woodworking and pulp and paper sub-sectors, and by some furniture
manufacturers, much energy has to be bought
in as oil, gas and electricity. In the EU, these fuels are all expensive,
especially in comparison with those in other global F-BI producers, such as
Russia and the USA, which have significant energy resources, and China which
subsidises energy to manufacturers.

The EU’s
focus here must be on energy efficiency, as well as a wider use of bio-energy
by the F-BI, both of which can alleviate the high price of bought-in energy to
a certain extent. The effect of such energy efficiencies can be further
enhanced when combined with resource efficiency, including for the use of
expensive wood. Nevertheless, the energy price differential with competitors
cannot be equalised and, in any case, both energy and resource efficiencies represent
technological challenges for the EU F-BI.

III.
Sectoral technological outlook

The main technological challenges for the EU F-BI are:

-
How to innovate and develop new products and
services to meet rapidly changing societal needs, including up to 2020, 2030
and 2050?

-
How to design and develop new production
processes that use less wood, other raw materials and energy, while minimising
waste, and are capable of manufacturing completely new groups of products?

-
How to educate and update the knowledge and
skills of the F-BI’s researchers and workforces to be able to develop such
products and implement such processes?

-
How to produce wood more cost-effectively and
sustainably from existing EU forests and other wooded land in qualities and
assortments better matched to manufacturing needs?

How
to innovate and develop new products and services to meet rapidly changing
societal needs including up to 2020, 2030 and 2050?

The 
so-called bio-based economy (see below) is a vision of the future in which some
of the existing products of our everyday life, many of which are currently
derived from unsustainable fossil-based natural resources, would be replaced by
those based on biomass feed-stocks, provided it is economic to do so. One of
the major feed-stocks for this would be wood. Whilst this could on the one hand
increase competition for wood raw material and help to increase its sustainable
supply, it could on the other hand open the door to a whole new range of
bio-based, wood-derived products for building, packaging, hygiene and health
care, etc. Research in this area is thus essential, although attention should
be paid to avoid a technology driven production of goods. One particularly
promising area of research is nano-materials, i.e. those in which the structure
of the wood or wood-derived material is modified at the microscopic level.
These can have such diverse applications such as the versatile nano-pulp for
making e.g. super-absorbent hygienic products and light-weight car parts, which
can safely bio-degrade after use. Other potential products include intelligent
packaging products. Currently, such products are expensive to make and not yet
available at the level of a pilot plant. But breakthroughs must come through
fundamental and applied research, investment and perseverance.

Moreover,
significant benefits for the sector could come through innovations to current
industrial processes (e.g. kraft process) aiming at improved energy efficiency
and adding more value to the raw materials. Such
innovations could provide, in parallel to the traditional outputs of the
industry, new products that could be utilised by other industrial sectors, with
creations of new “bio” value chains and higher value creation by the FB-I. The
deployment of these new processes on the industrial scale could be easier as
they could be integrated on existing production facilities, providing impact in
the short term.

As
regards second generation biofuels, economies of scale are bringing down costs.

How
to design and develop new production processes that use less wood, other raw
materials and energy, while minimising waste, and are capable of manufacturing
completely new groups of products?

The
development of very thin wood veneers and of light-weight paper grades, such as
for packaging, are examples of doing more with less fresh wood fibre.
Block-boards, laminated veneer lumber and small parquet are examples of
upgrading small-dimension and/or low-quality woods to higher-grade uses. Engineered
wood products[12],
such as structural I-section beams and “glu-lam” (glued-laminated) beams for
flooring and roofing can use low-grade and small-dimensioned wood into highly
performing structural products with predictable properties.

Integration
of the “cascade principle”[13]
into the use of raw materials such as wood not only helps store for longer, in
the form of wood-based products, the carbon they have sequestered but can also provide
more added value and jobs than can the direct use of wood or its residues for
energy. At the end of the “cascade” sequence, the post-consumer recovery of
both wood and paper help delay the energy use of wood even longer and also
increase the overall supply of industrial wood fibre.

Notwithstanding
the ideal application of the “cascade principle” for using wood, it should however
be borne in mind that, according to economic and local circumstances, such as
economic downturns or locations without viable alternative wood markets or
energy supplies, changing demands or forest fire prevention, the use of wood
for bio-energy may sometimes be the practical first or only option. Moreover,
as part of a mix of outputs from woodworking plants, wood-based fuels (e.g.
pellets) or excess process bio-energy (in the form of heat and/or electricity)
derived from wood residues can be profitable outlets for the woodworking
industries themselves, if sold to the market, including electricity to the
public grid. In this context, pulp mills and even some of the larger sawmills
and panel mills may even be able to run as some of the “wood-based
bio-refineries” and produce transport bio-fuels amongst their products.

Wood fibres
can be used and recycled in the F-BI in the most optimal way for the highest
possible added value. For example, in
the pulp and paper manufacturing industries, 1 m³ of wood raw material can
create products having a total wood-equivalent volume of up to 2.38 m³ and a
job multiplication factor of five vis-à-vis using wood directly for bio-energy.
This ratio rises to 7:1 if the upstream and downstream value chain activities
are included (Source: Pöyry[14]
for CEPI). As regards added value, pulp and paper making can double the value
generated by bio-energy and, together with their ancillary activities, the
ratio can be up to five times overall. These figures should increase with
future technological advances.

Using
less wood or wood fibre to make a given product and/or deriving it from residues
or recovered material, contribute to resource and energy efficiency. In using
recovered paper fibre in making recycled paper, less fresh wood and energy are
used per unit of production. The reliance on bought-in energy has been also
reduced in the F-BI (e.g. woodworking, furniture and pulp & paper) by using
generating and consuming bio-energy from biomass, thus increasing their energy
self-sufficiency. Furthermore, when the production process itself is
rationalised, overall energy use can be further reduced. When both the product
itself can be redesigned to use less material and its production process can be
further optimised, significant material and energy efficiencies can be
achieved. If on top of these achievements the product has a higher added value,
its overall competitiveness can be upgraded.

Fundamentally
redesigning existing F-BI products and processes may offer significant scope
for resource and energy saving, whilst the thermal properties of wood as a building
and insulating material can
help reduce the energy consumed in heating our buildings and make homes and
offices of the future net energy generators.

How
to educate and update the knowledge and skills of the F-BI’s researchers and
workforces to be able to develop such products and implement such processes?

The
increased use of technology in conceiving, designing, developing and
manufacturing both “traditional” and bio-based innovative F-BI products, as
well as the ICT incorporated into process control, increasingly calls for
highly trained and skilled F-BI researchers and production work-forces. Whilst
“low-tech” traditional skills, e.g. for furniture making, can be passed on to a
new generation of workers and technicians by word of mouth, demonstration, experience
and supervision, new processes, products and markets call for high levels of
academic qualifications, laboratory and workshop techniques and industrial
awareness. Retraining is also essential to update existing knowledge and skills
or replace them with new ones. Thus, appropriate course development, to be
applied through life-long learning will be increasingly important, whether on
the job or on-line. Investments in new types of knowledge and skills are
also needed in order to seize the opportunities created by changing market and
consumer demands, including to manage the shift to new business models. An
example of good practice in this area is provided by the printing sector, which
has developed a methodology for planning and executing socially responsible restructuring
which it is currently implementing with the full support of the sector’s social
partners.[15]

How
to produce wood more cost-effectively and sustainably
from existing EU forests and other wooded land in qualities and assortments
better matched to manufacturing needs?

The
steady but slowing expansion of EU forests and their accumulating wooden
growing stock does not guarantee an automatic increase in usable wood supply to
the EU F-BI. The problems of the so-called “fragmented forests”, i.e. those in
small ownerships, with sometimes unidentifiable owners and a lack of
integration into F-BI value chains, are particularly difficult to resolve without
the co-ordinated sharing of good practices evolved through applied experience. An
increasing problem in this context is that the share of wood-based revenues in
the total income of forest owners in many MS is decreasing, making market-based
incentives less effective. Outside the forests, other wooded land, including
parks, gardens and road-sides, can provide significant quantities of usable
wood. However, the use of wood raw material from all forests and other wooded
land must be done in a sustainable way, as detailed in the Commission
Communication: “A new EU Forest Strategy: for forests and the forest-based
sector”. More information on the spatial distribution of forest resources and
additional information, such as wood quality, dimensions and species, is also
needed to assess and plan wood availability and its mobilisation for future
uses, and to have a better communication throughout the value chain.

Whilst
all wood can be used for energy production, at least theoretically, there are
limits as to how flexibly different wood types can be used between different
end uses within the F-BI, as indicated by Figure 11. This does not account for
further limitations caused by wood species, qualities and dimensions.

Figure
11: Qualitative substitutibility of different wood sources between competing
end uses

Raw material types || Sawn-wood || Ply-wood || Pulp, Paper & Board || Oriented Strand Board (OSB) || Particle Board || Medium  Density Fibreboard (MDF) || Pellets || CHP Combined  Heat &  Power

Wood || Pulpwood || || || || || || || ||

Logs || || || || || || || ||

Forest residues || || || || || || || ||

Industrial residues || Bark || || || || || || || ||

Chips || || || || || || || ||

Sawdust || || || || || || || ||

Recycled material || Recovered paper || || || || || || || ||

Recovered wood || || || || || || || ||

Source: Indufor Oy

RAW
MATERIAL SOURCES FOR VARIOUS END USES

NB: wood products’ raw materials are further limited by species,
quality and dimensions (not shown) but bio-energy can use all wood sources.

As
indicated in detail below, any improvement in wood mobilisation must overcome
not only physical (e.g. technical and logistical) and cost issues but also be
based on easier location of suitable species, dimensions and qualities of wood
raw material. Topographical surveying and infra-red or laser-based forest
inventory can help to assess economically the potential harvesting output of
forests, including fragmented areas, both in terms of the equipment needed and
potential market outlets for the wood produced. Moreover, the further
development of tools for forest modelling and inventory which allow
optimisation of the harvesting operations, with consequent cost reduction,
providing early information on the standing trees (quality, amount, etc..) and
allowing information exchange (e.g. demand, value, etc.) in near “real time”
among the actors along the value chain (owners, customers, etc.), could be
valuable in helping to optimise harvesting operations and costs, sustainably
harvest more wood in Europe and provide the forest owners with better income
for their raw material. Further use could be made of such inventory results
through their harmonisation at the macro level, e.g. between Member States.

As
regards the costs, a judicious use of incentives, such as a re-direction of the
subsidies, currently given to the energy supply industry for generating
bio-energy, into mobilising more wood from unharvested forest areas, such as
fragmented forests, could:

-
provide
more wood raw material to the market on an equitable basis for all end users;

-
reduce/eliminate
the cost differential for wood raw material between the energy industry and
other wood users, such as the EU F-BI;

-
help
improve the forests by stimulating their renewal and hence maintain or even
improve bio-diversity.

Such
forest improvement could include: wood quality, age-class structure, health,
robustness against biotic and abiotic threats (e.g. disease, fire prevalence
and intensity, climate change), since forest operations such as thinning and
final felling stimulate not only a resurgence in the growth of uncut trees but
also help to improve bio-diversity by allowing light to reach the forest floor.

At the sawmill
level, computed tomography (CT) scanning can then be applied to harvested
roundwood to identify the best out-turn from individual logs or whole trees. Following
sawmilling, automated stress grading of sawnwood can ensure that individual
wood beams meet exacting structural and other standards.

IV.
EU Forest-based Industries (F-BI) by sub-sectors:

The
current composition of the EU Forest-based Industries includes the sub-sectors
listed below. Each of these sub-sectors is examined in turn as to its key
features, main challenges and opportunities.

a) Woodworking
industries

b) Furniture
industry

c) Pulp
& paper manufacturing & converting industries

d) Printing
industry

EU Forest-based
Industries (F-BI): historical rationale:

The F-BI definition has evolved to reflect the changing structure,
perspectives and needs of the sectoral industries concerned. When the Advisory Committee on Community Policy regarding Forestry and
Forest-based Industries (AC F-BI) was first set up in 1983[16], the forest-based industries
included: the mechanical wood industry (i.e. woodworking),
the pulp, paper and board manufacturing and converting industries, the printing
and the publishing industries. This grouping was confirmed in the Committee’s
amended decision in 1997[17].
However, in its 2008 Communication[18], the Commission defined the EU
forest-based industries as: the woodworking industries, the pulp and paper
manufacturing and converting industries and the printing industries, reflecting
the shift of focus of large parts of the publishing industry into electronic
media.

The EU F-BI form a sectoral division of the EU’s Industrial Policy, a
complementary Union competence under Art. 6 TFEU[1]. Conversely,
there is no Treaty basis for forest or forestry activities per se. The
term “forest-based sector” includes the upstream forest resource and ancillary
forestry activities as well as the downstream forest-based industries.

a) WOODWORKING
INDUSTRIES

Key features

The
EU woodworking industries include some 184,000 companies generating an annual
turnover of around 122 billion
Euro on a production value of over 115 billion Euro and generate an added value
of over 31 billion Euro.  They employ more than 1 million workers. Most companies are small or medium-sized; the exception
being the wood-based panel sub-sector and a handful of sawmills, which have a
number of large enterprises, a few belonging to multinational companies.

The
main sub-sectors are: sawmilling; wood-based panels; builders’ carpentry &
joinery; flooring and other wooden articles. Overall, the main uses of
sawnwood, carpentry & joinery are in construction and furnishings. The main
uses of wood-based
panels are in furniture, flooring and non-structural wall and roofing panels.
Accordingly, the EU woodworking industries have been heavily affected by the
economic and financial crises. As can be seen from Figure 3, the long-term gradual
reduction in the number of sub-sectoral firms between 2003-10, during which
period 8% of companies went out of the market, has been sharply accelerated
from 2008 onwards.

Main challenges

The
main challenges facing the woodworking sub-sector on the supply side are: the
legal and/or sustainable availability of wood raw material; roundwood and other
material costs, whether from EU or imported sources and the lack of optimal
wood mobilisation strategies; high energy and labour costs and an ageing
workforce. Additionally, the problem with a shrinking workforce due to an
ageing population in the EU and urbanisation, both factors which make, in particular,
the mobilisation of wood difficult and more costly, should be stressed. The
solution to this problem calls for increased productivity through technological
development, mainly in the harvesting of timber. On the demand side the
challenges are: the reduced demand from the construction sector and from the pulp
subsector; competition from low-cost imports; increasing scrutiny of wood
sources, especially for public procurement; an increasing need for product and
process innovation in the face of costly finance, low profitability and hence low
investment in plant and skills.

Voluntary
chain-of-custody certification, indicating the origin of wood from sustainably
managed forests via an identified supply chain, has been an increasing feature
of EU wood supply over the last 15 years. Since March 2013, the EU “Timber
Regulation” (EU TR)[19] has banned illegally
harvested wood from the EU market and required legal wood which is placed on
the market to undergo a due diligence process, with traceability upstream to
its source and downstream to traders. A small but significant number of other
developed markets make comparable legality requirements (USA, Australia, Japan,
Switzerland). However, such measures should not lead to
unintentional and unexpected implications for timber trade flows.

All
wood and wood-based products placed on the EU market are subject to the EU TR
but, even if they pass muster, low-cost imports often have an added market
advantage over their EU counterparts if their production is subsidised and/or
they do not have to meet the EU’s high environmental and social standards. In
some cases, even mandatory EU technical standards are flaunted, such as has
been the case with some building components, like imported plywood which was apparently
CE-marked but did not meet those requirements. The consequences of such
violations are potentially deadly.

Opportunities

Wood is
a natural, renewable and environmentally friendly raw material (carbon storage,
reusable, recyclable, combustible) and has
excellent thermal properties. However, it is also a heterogeneous material,
varying by species, dimension and quality. Whilst such variations can limit the
substitutability between different
wood types (see above) and make it a difficult task to manufacture standardised products, wood’s visual
artefacts give scope for design for both functional and cultural uses. It is
also a healthy life-style material.

Even
though the role for wood in “traditional” construction applications, such as
window and door frames, doors and flooring, may remain curtailed by the on-going
crises, its potential use in renovation, retrofitting and wood-framed
construction is enormous. Even without new buildings going up, existing ones
have to be maintained and refreshed, to which end, wood offers a consumer-friendly
and healthy material, the natural surface of which can often add character to refurbishing
and furnishings of existing buildings. Likewise, retrofitting
of and extensions to the existing building stock can benefit from wood’s
efficient thermal and acoustic properties at competitive prices.

These
applications, together with new wood-framed buildings (for homes, offices,
functional buildings such as wide-span sports halls, bridges and other
structures) are part of what is increasingly referred to as “sustainable
construction”, in which durable, low-impact and energy-efficient solutions are
sought. Whether in structural or non-structural applications, for new buildings
or for renovation, wood can help improve the energy performance of buildings on
a life-cycle basis by harnessing its insulating properties to reduce heat loss
and so reduce energy costs. Wood-framed buildings are well suited to
pre-fabricated manufacture, which can reduce assembly time and material waste
on the construction site. Scope also exists for wooden building in zones prone
to earthquakes, where specific wood-framed structures have been proven to be
more resistant to tremors.

Due to
its natural structure, wood is permeable and this property can be used to
impregnate it with substances to prolong its natural life time or to combine it
into so-called “wood bio-composites” for diverse uses such as: thermal
insulation; acoustic panelling, specialist packaging and absorbing liquids. Such
enhanced applications can add much value to relatively small volumes of wood
material but require strategic development.

b) FURNITURE INDUSTRY

Key
features

The
European furniture sector employs around 1 million workers in 130.000 companies
generating an annual turnover of around 96 billion Euro. It is a
labour-intensive and dynamic industry, dominated by SMEs and micro firms, which
produce kitchen, office, bedroom and other specialist types of furniture. Its
success factors lie in creative capacity for new designs and responsiveness to
new demands, ability to combine new technologies and innovation with cultural
heritage and style, highly skilled employees and performing production systems.
The European furniture manufacturers set the trends at the global level, which
is reflected by the fact that 12% of designs registered in the Office for
Harmonization in the Internal Market relate to the furniture sector. The EU is
also a world leader in the high-end segments – nearly two out of three high-end
furniture products sold in the world are produced in the EU.

Main
challenges

The
European furniture sector faces enormous competition from countries having low
production costs, in particular in the low- and mid-range price segments, where
the EU share in world furniture trade has significantly dropped in the last
decade. China’s EU market penetration is growing rapidly and it is now the
largest furniture exporter to the EU, supplying more than half of total
furniture imports to the EU. The reliance on innovation and design as a
competitive advantage of the European furniture sector, combined with an increase
in global trade and digitalisation, makes it more vulnerable to weak protection
and enforcement of intellectual property rights on the global markets.

The
European furniture sector is also faced by structural problems. The ageing
workforce combined with difficulties to attract young workers may lead to
disruptions in maintaining a skilled workforce and continuity of traditions and
craftsmanship. Furthermore, boosting research and innovation requires
sufficient finance, which is often inaccessible to SMEs.

While
the EU is the most open global market, protectionist measures exist on other
international markets, creating market distortions. EU furniture producers face
both duties on imported materials and semi-finished products used in furniture,
and tariffs on their exports of finished furniture products, thus decreasing
the sector’s global competitiveness. Moreover, their operational costs are
increased by environmental, sustainability and technical standards and
regulations.

All the
above factors, combined with the fact that the furniture sector has been
severely hit by the recent crises, have led to a significant drop in the number
of companies, jobs and turnover, from which the sector is still trying to
recover.

Opportunities

In the
light of these developments, the EU furniture sector has undergone significant
changes – restructuring, technological advances and business model innovations,
allowing it to be more export-oriented, and to focus on upgrading quality,
design and innovation. Continuing investment in skills, design, creativity,
research, innovation and new technologies can result in new products which are
in line with the changing population structure, lifestyles and trends, as well
as with new business models and supplier-consumer relationships. Moreover,
research in advanced manufacturing technologies can result in the creation of
high technology and knowledge intensive jobs, which would give the sector the
attractiveness it needs towards the new generations. This could help to rejuvenate
the sector while keeping it highly competitive on the world stage.

European
furniture manufacturers being recognised world-wide for their quality and
design also creates opportunities for the sector to further seize other
markets, in particular in the high-end segments and emerging markets. The
synergies with construction and tourism could also be exploited, building up on
the sector’s excellent track record in sustainability. Specifically, reliance
on raw materials from sustainable sources used in the furniture production could
have a positive impact on sales among environmentally concerned end-users
within and outside the EU.

c) PULP & PAPER
MANUFACTURING AND CONVERTING INDUSTRIES

Key
features

The
European pulp and paper manufacturing and converting
industries employ around 647.500 workers in 21.000
companies, generating an annual turnover of around 180 billion Euro, from the
production of pulp as well as graphic, hygienic, packaging and specialised
paper grades and products. The pulp and paper
manufacturing sector is energy- and raw materials–intensive, with high capital
costs and long investment cycles, and has an excellent track record in resource-efficiency
and innovation. Over the last two decades, it has substantially reduced all
environmental emissions and also water and energy consumption, effectively
de-coupling all of these from production growth, thanks to improved process
efficiency. It has become more energy self-sufficient and less CO2-intensive
by generating more than half of its primary energy from biomass. Thanks to the
voluntary, industry-led initiatives in addition to legislative measures, the
paper recycling rate in Europe exceeds a high level of 70% and raw materials
used in paper and board production and converting come from sustainable
sources. The high level of expertise and continuous research and innovation
well position these industries to exploit new business models, develop novel
products and applications, and technologies, progressing toward a low-carbon
bio-economy.

Main
challenges

Overall
paper consumption in Europe has stagnated, due to the economic slowdown and
also structural developments. A continuing decrease in graphic paper
consumption is expected as a result of the growing pace of digitalisation and
changing lifestyles. However, this is counter-balanced by growth in packaging
and hygiene papers, mainly due to demographic trends in Europe. Innovative
business models and products create new opportunities for the sector, however,
these require new skills and education.

The
pulp and paper sector is increasing its share of exports outside the EU. Even
so, tariff barriers, applied to nearly half of the exports and protectionist
subsidies for rival goods, create an uneven playing field, further restricting
market potential. On the raw materials supply side, taxes and exports duties
imposed by EU trade partners on wood exports, notably by Russia, also raise
concerns, especially when combined with heavy bureaucracy. Fibre raw material,
from primary and secondary sources, represents the highest share of production
costs, thus its availability at affordable prices is crucial for the sector.

The demand
for domestic EU wood supply is increasing from other end-users, notably
bio-energy. Increasing mobilisation of wood in a sustainable way and developing
new, innovative ways to further optimise the added value from raw materials
would help to match wood supply and demand. To this end, progress is needed to
increase forest management efficiency as part of an overall policy framework
supporting the sustainable supply and cascading use of wood resources, in
addition to energy efficiency. The paper recycling rate in Europe is very close
to its maximum limit, as determined by deteriorating quality and the
non-collectable and non-recyclable fractions. Improvements in collection and
sorting systems and technology can further increase the quality and
availability of the secondary raw material. However, its supply may also be
challenged by the increasing recovered paper exports to third countries,
notably to China.

Rising
prices of energy in Europe, combined with an increasing difference in gas
prices compared to North America, also place the sector at a global competitive
disadvantage. The EU environmental, climate change, energy and transport
policies also have major influences on the future of the sector. The right and
coherent regulatory framework is thus essential to support sustainable growth, investor’s
certainty and level playing field.

Opportunities

Continuous
technological improvements can further reduce environmental impacts and
optimise the use of resources, in particular raw materials, water and energy.
New advanced and more efficient processes can also offer innovative ways to
develop new products and applications based on cellulose fibre, generating more
added value. Breakthrough technologies, such as to reduce heat use in paper
production through reduced water consumption and improved paper drying processes
and to develop new products, are needed, however, to achieve the sector's
ambitious objectives for the 2050 Roadmap towards a low-carbon bio-economy of
80% CO2 reduction and 50% value
growth by 2050[20].

The
European pulp and paper sector is seizing the opportunities of a bio-based
economy. New business concepts will allow it to use the entire potential of the
raw materials and by-streams of the forest-based sector efficiently to produce
a broad range of high added-value products and novel materials for use in the
textile, food and pharmaceutical industries, bio-based fuels and chemicals,
alongside traditional wood-based products. In this framework, it is also
important to develop innovative processes and technologies suitable for
integration in the existing production facilities, as this could allow for faster
industrial-scale deployment, delivering a positive impact in the shorter term,
without having to wait for the phasing out of the running plants.

d) PRINTING INDUSTRY

Key
features

The
European printing sector covers 120.000 companies that employ around 770.000 workers,
generating an annual turnover of around 88 billion Euro, from printing on a
number of media, including paper, plastics, textiles, etc., and using a series
of technical processes. The sector is dominated by family-owned, small and
micro companies, operating mainly on domestic markets. Such high fragmentation
facilitates reacting to niche markets and local needs, and gives flexibility to
respond to consumers’ variable orders in ever-shortening lead times and small
print runs. The modern and efficient technologies available have increased the
sector’s productivity and ability to provide a complete range of services. At
the same time, process automation has resulted in a change of the workforce
profile from craftsmen to technicians. Investments in the printing sector are
still primarily focused on production equipment, to the detriment of
non-production activities, such as research and development and marketing. The
sector is also characterised by a structural production over-capacity,
estimated at up to 30%, as result of a declining demand for many printed
products, increasing global competition and improved machinery productivity.

Main
challenges

Changes
in reading habits and the shift toward web-based media and e-solutions have
significantly reduced the demand for print and revenue from paper-based
advertising. A growth in printing output is mainly restricted to printed
packaging and digital print. Competitors from low-cost countries, notably Asia,
are capable to fulfil the European consumers’ standards in terms of quality and
are putting strong pressure on prices. Consequently, imports from China of
printed products to the EU have increased more than four-fold over a decade.

The
recent crises have had a major impact on the European printing sector, prone to
economic cycle fluctuations. It exacerbated a decline in demand for printed
products and increased financial institutions’ reluctance to provide loans to
SMEs often lacking financial capacity. The increasing costs of production in
Europe, specifically energy, raw materials and labour costs, have further
decreased the margin. The relative concentration of the printing sector
suppliers places it also in a disadvantaged position.

In
response to these challenges, the printing sector is undergoing a profound
market transformation, with implications for company closures and redundancies.
A risk of unemployment is intensified by the workforce’s low mobility, partly
due to specialised skills, unique to this sector but which are non-transferable.
At the same time, opportunities arising from technological developments and new
business models change the industry’s skills and competency requirements, which
will supplement, and in the longer-term replace, its ageing workforce and its
traditional skills.

The
European printing sector operates in a strict environmental framework and
undertakes ambitious voluntary initiatives to demonstrate to consumers its
commitment to environmental sustainability. Despite these efforts, the use of
print on paper may give rise to a negative environmental perception, sometimes
reflected by unsubstantiated environmental statements.

Opportunities

The
structural overcapacity is optimised through market consolidation and socially
responsible restructuring, adopted by printing companies to build economic
sustainability while developing a ‘culture of employability’. Strategic
alliances are possible, although complex to implement and uncertain in these
mainly family-owned companies. Conversely, the flexibility of small size
companies facilitates exploring new niche markets.

The
emergence of new media and technologies supports the building of closer
relationships with customers and creating more added value through diversified
services, such as offering print services with database management, and
innovative processes, such as 3D printing. Integrating multi-media
communication services not only widens the product range, but can also increase
the attractiveness of the sector to new employees. The European printing sector
can also benefit from increasing consumer awareness toward sustainability, and
its excellent track record of environmental and social performance, by using
them as  differentiating factors from non-EU, low-cost competitors.

In this
field research and innovation are highly needed to provide new paper-based
products with added functionalities such as paper-printed electronics. These
new products could exploit the sustainability of the support (i.e. paper) but
provide the user with added functionality beyond simple printed paper,
resulting in new markets and higher added value for the printing industry.

V. Detailed
description of challenges faced by the EU F-BI and remedial initiatives

This
chapter describes more fully the F-BI sectoral challenges mentioned in the
Communication “A new EU Forest Strategy: for forests and the forest-based
sector”, together with potential responses which could be foreseen for the EU, 
Member States, F-BI and other bodies to carry out.

These
challenges do not exist in isolation from each other but as part of a
functional system, depicted in Figure 12, in which the challenges are in bold
italics. In this system, information and communication
are pathways linking the other elements.

Figure 12: The relationship between F-BI challenges

Drivers || Tools

stimulating growth through new & efficient processes, products & markets || innovation, research & technological development trade and co-operation || information & communication

resource and energy efficiency: - raw material supply             - logistics                                            || innovation, research & technological development education, training, skills

human resource efficiency:             - structural adaptation                      - labour productivity

Drivers conditioned by:

international competition for EU and third-country markets. ||  innovation, research & technological development education, training, skills

regulatory framework, including EU & MS policies, in particular those on:             - climate             - energy             - trade || policy coherence

Finance || EU & MS funds Other: outside scope of F-BI strategy

image (the resultant of a set of perceptions arising from information received, which may often be incomplete but also incorrect and/or biased).

Stimulating
growth

If one
wants to increase the competitiveness of and demand for wood-based and related
products and services, one must improve the quality and efficiency of existing
processes, products and related services. In addition, innovative
new processes, products and services can be developed and marketed, such as so-called
“bio-based products”[21],
which together with their specific processes could provide opportunities as
part of the “bio-based economy”. New business models are also
vital, responding to changing societal needs through
an integrated value-chain approach.

Follow-up
by the F-BI of the Communication on “Strategy
for the sustainable competitiveness of the construction sector and its
enterprises”[22],
will be crucial, for example by providing markets with competitive,
performance-based solutions derived from wood - for building, retro-fitting and
renovation, while realising synergies with furniture and paper-based products. Among
proposed activities are the following:

1.
stimulating favourable investment conditions -
in particular in the renovation and maintenance of buildings and infrastructures
- by promoting financial instruments such as loan guarantees or project bonds
and encouraging national level incentives such as reduced VAT rates;

2.
boosting innovation and improving labour
qualifications and mobility by promoting the share of information on curricula,
employment market and employer's needs;

3.
improving resource efficiency and environmental
performance, promoting mutual recognition of sustainable construction systems
in the EU;

4.
providing standard design codes of practice for
construction companies making it easier for them to work in other Member
States;

5.
fostering the global position of European
construction enterprises to stimulate good performances and sustainable
standards in third countries.

To
further underpin the communication’s implementation, Member States could
develop mechanisms, incentives and tools to encourage sustainable construction,
retro-fitting and renovation, including appropriate and integrated
sustainability objectives (environmental, social and economic) for construction
schemes, as well as relevant objective criteria for rating systems - to be
based on life-cycle assessments, in order to compare options.

In
anticipation of a further communication (on sustainable buildings) which is
under preparation, industry could complement such initiatives by identifying
apparent EU and Member States’ barriers to building products of natural and
renewable materials, given their potential for improving the energy efficiency
of buildings, and suggesting potential solutions.

In addition,
improving information to customers on specific qualities of furniture, and
possibly on other F-BI products, placed on the EU market, could
facilitate their informed decision-making. This could, in
particular, promote products performing to high standards for the environment
and human health throughout their life cycle.

Furthermore,
the delivery of both current and new products from all the
above four F-BI value chains can be expanded in existing and
into new markets within and outside the EU. Exploring
new markets outside the EU, especially in emerging economies such as the
so-called BRICs, can assist the EU F-BI’s competitiveness to be further
realised. To this end, exports of EU wood-based and related goods could be
facilitated by identifying tariff and non-tariff barriers and addressing them
in bilateral trade negotiations. In this context, the F-BI sectoral information
of the Market Access Data Base[23]
(MADB - about import conditions in third-country markets) could be improved and
the involvement of the F-BI sector in the Market Access Advisory Committee
could be further strengthened, so as to play a more important role.

Simultaneously,
active market development and trade promotion in existing and new markets
outside the EU, including for SMEs, will continue to be carried out by Member
States and also at EU level (e.g. through “Missions for Growth”, EU Gateways).

EU Resource and
energy efficiency objectives

Resources:
Using the "cascade principle" increases raw material availability,
enables more output from a given input and maintains or creates more jobs and
added value for the economy[24],
as well as – in the case of wood - delaying the release to the atmosphere of
its stored carbon. The EU F-BI use or sell most of their wood-processing
residues: in other product lines, as secondary raw materials
or fuel, or as process energy. Thus, in addition to having high labour
productivity, the F-BI are resource-efficient and so in line
with the mainstay of the EU policy framework, the "Roadmap to a Resource
Efficient Europe"[25].
In such cases where waste can become a resource in a
virtuous cycle, it forms part of the "circular economy"[26].

Energy:
After raw materials, energy represents a high proportion of
EU F-BI production costs but its level varies
between F-BI sub-sectors (see Figure 8). The EU F-BI generates much of its own
process energy from its wood residues. However, energy bought in to the sector
costs up to two and a half times that in the USA. Given little prospect in the
EU of significantly decreasing per-unit prices for bought-in energy, savings in
energy costs can only be made by the EU F-BI through wider generation of
bio-energy and their further energy efficiencies.

Concerning the
competition for wood raw material from the bio-energy sector, a study recently
carried out for the Commission[27]
indicated that the total use of wood biomass in the EU for bio-energy will rise
from 292 to 360 Mm³ (+ 68 Mm³ or + 23%) of roundwood equivalent (RWE) between
2010-16. But this would still leave a shortfall of 63 Mm³ vis-à-vis the wood
requirements anticipated by EU MS in their National Renewable Energy Action
Plans (NREAPs). Thus by 2016, the amount of roundwood equivalent
used for bio-energy will be greater than that used for either the woodworking
industries (332 Mm³) or for pulp and paper manufacture (347 Mm³). The huge
increase foreseen will be drawn mainly from forest residues (+26 Mm³) but also
significantly from roundwood[28]
(+21 Mm³) and industrial residues (+17 Mm³) but very little from recovered wood
(+4 Mm³), thus confirming the missed opportunity of the unused potential of the
last category. (These totals however hide member-state variations, which are
detailed in the national case studies of the overall study).

Starting
upstream in the F-BI value chains, stakeholder proposals and inputs for
improving forest inventory information on the supply of wood, and market
information on demand for wood, wood-based materials and products, will be
essential to increase market transparency and hence operational efficiency. As
far as possible, such proposals could be reconciled into existing or programmed
work by the EU institutions. Otherwise, if justified, feasible and affordable,
new provisions might be considered.

An EU-wide catalogue of
examples of good practice, especially amongst small and micro firms, on
successful resource- and energy-efficient measures for wood-processing, could
be a highly useful and desirable sectoral tool, for example in the form of a
users’ guidance manual. To this end, a joint public-private initiative could be
launched in which, contingent upon industry identifying and sharing their
good-practice examples as a basis, a study could catalogue the results and
render them transferable. In any case, a set of life-cycle-based sustainability
criteria could be developed for the uses of wood, based on a common set of
criteria for sustainable forest management, and including efficiency
requirements for greenhouse-gas saving, energy use and optimising the use of
the cascade principle.

Within
the framework of the next revision of the Waste Framework Directive (2014), the
targets and measures for stimulating wood recovery and paper collection would
be assessed at the EU level. Policy initiatives in the field
of environment, renewable energy and climate action could further promote
resource efficient use of biomass through e.g. recycling and cascading use. In
this context, and
also in that of the National Renewable Energy Action Plans
(NREAPs), Member States and F-BI are encouraged to recover more wood, wood products
and residues from industrial & post-consumer waste, for re-use and
recycling. Member-State initiatives to help achieve this could include
appropriate staff and consumer training, incentive schemes and fiscal penalties
(e.g. modulating land-fill taxes applied to wood).

As a
framework for such work, it is suggested that the private sector consider
leading the formation of a European Wood Recovery
Council (EWRC), to be established as a public-private partnership, for the
purpose of improving wood recovery, re-use and recycling.  Such an EWRC could
for example, together with Member States, carry out monitoring of wood waste,
including its disposal in land-fill and
the land-fill taxes so engendered, and compile a comparative report each year.

All
actors are urged – in any case - to contribute to developing good-practice
guidelines for wood recovery, including the “cascade” principle, ideally in
co-operation with a European Wood Recovery Council,
as above. As appropriate, the Commission could help facilitate this process.

Given
the positive experience in the EU printing sector with group energy purchase
and also long-term, fixed-price contracts, including for the purchase and sale
of energy, other F-BI sub-sectors could explore, together with the energy supply
industries, the scope for similar arrangements. In this connection, industry
is invited to collect, exchange and monitor statistics of F-BI energy prices
across the EU, as a basis for analysing energy-price gaps between the EU and
its competitors, especially with the USA.

Raw materials, their sources
and flows

EU
domestically harvested industrial wood (about 345 Mm³[29]) accounts for
about 90% of the wood processed
by the EU F-BI. This is equivalent to only 45% of the annual EU wood growth,
with up to another 17.5% going directly outside the F-BI as fuelwood. EU
forests offer a bigger potential and could provide even more wood. However,
supplies from Europe are constrained by:

-
insufficient information on forest resources
(species, qualities, dimensions) available for informed decision-making in the
value chains;

-
diminishing: quality, dimensions and
accessibility of uncut wood;

-
fragmented forest ownerships; part-time owners
unmotivated to produce wood;

-
the EU & MS regulatory frameworks (e.g.
Natura 2000; biomass sustainability criteria - not all of which are imposed on
other materials);

-
costs of harvesting machinery and of roundwood,
compounded by competition from subsidised non-EU buyers.

To help address these
and other difficulties, forest-based sector stakeholders and Member States need
sound sectoral knowledge bases and regulatory
frameworks. In this context, it could be worthwhile to update, expand and
widely disseminate the wood mobilisation guidance[30], so as to
make it available to a broader range of sectoral stakeholders in a number of EU
languages, whilst linking it to the sets of downstream guidance on efficient
wood processing and recovered wood (see above).

Furthermore,
sustained dialogue between forest owners, civil society and the F-BI, based on
their inter-dependency and to enhance their scope for co-operation could
further help address the mismatch of the forest wood resource with market
needs, as well as the worsening state of the EU’s wood-harvesting capacity. In
particular, the needs of micro and small wood-harvesting firms could be tackled
through public and private-sector (national authorities, firms, chambers of
commerce) support for adequate, updateable
and transferable training modules (e.g. for machine operation &
maintenance; health & safety; social inclusion) and the facilitation
of finance for new entrants & re-equipping.

For secondary
raw materials, much has already been achieved for paper. Its recycling
rates reach around 70% on average for the EU, close to the economic optimum.
There is still some scope for improvement e.g. by avoiding co-mingled waste
collection, or by innovative sorting and treatment systems. For wood, the
situation is different since recovery rates are generally very low, notably
because of physical limitations (e.g. contamination) and logistical ones
(dispersal; inadequate collection and sorting systems). So, much used wood
remains uncollected or ends up in land-fill, triggering
costs (e.g. non-reimbursable
recovery charges and landfill taxes). Improving
wood recovery rates, supported by the effective implementation of the Directives
on the landfill of waste[31]
and waste[32],
would thus avoid penalties and provide valuable secondary raw material to the
market (see above).

Globally,
prices of non-EU wood supplies to the EU are increased by export taxes (Russia)
and increasing domestic demand in exporting countries. The exports of sawlogs
and paper for recycling, particularly towards Asian countries, such as China,
are increasing, thus posing a risk for sustainable supply of this raw material
at competitive prices to the EU industry. For the latter, the scope for
possible action may result from the follow up of the feasibility study of
applying a global certification scheme for recycling treatment facilities to
the export of waste streams[33],
which would build on environmentally-sound management criteria.

Similarly,
monitoring the developments of recovered paper and roundwood exports,
especially sawlogs, from the EU could be considered, with attention being paid
to their consequences for the EU industry. In any case, amongst the issues
which need to be taken into account regarding the trade in wood and wood-based
raw materials are that they originate from sustainable forest management, that
they are legally harvested and marketed, that they comply with phytosanitary
requirements, such as de-barking, and are shipped in conditions not liable to
give rise to the culture of harmful organisms.

Bilateral
trade agreements could be useful to facilitate access to non-EU primary wood
supplies and to address import subsidies for and export taxes from non-EU
partners and examine possible EU tariff reduction or elimination for imported
secondary wood raw materials.

In view of the above and
other challenges linked to raw materials supply, the Commission has launched
the European Innovation Partnership (EIP) on Raw Materials[34]. An active
involvement of all stakeholders concerned is crucial for the successful
implementation of the Strategic Implementing Plan (SIP) and achieving the EIP
goals.

Other
raw materials include: resins, adhesives, coatings
(woodworking); latex, starch (paper); textiles, metals, etc. (furniture); inks
(printing). The costs of resins and coatings, although of a lower order than
wood or energy, are nonetheless significant and not only generally increasing
but also subject to volatility caused by supply-demand imbalances and/or
currency fluctuations, since they often come from outside the EU.

In the
face of cheaper product imports, increased raw material costs for the EU F-BI are
difficult to recoup by increasing their product prices.

Logistics (wood harvesting,
infrastructures and transport)

Economic
wood harvesting requires sophisticated equipment and skilled operators. The
high costs of equipment and operators are compounded by many forests being
fragmented and having poor access. Outside the forest, infrastructures and
transport systems pose constraints, such as restrictions in and variability
between Member States for lorry dimensions and weight limits, as well as
non-integrated transport systems.

With a
view to overcoming some of
these constraints, relevant EU and Member-State instruments, including
the Rural Development Regulation[35],
the European Regional Development Fund (ERDF)[36],
the Strategic Framework for European Cooperation in Education and Training
("ET 2020")[37]
– if the relevant operational programmes provide for it and where appropriate –
can assist in the development of:

-
forest infrastructures
(tracks, roads, drains, bridges, loading bays, etc.);

-
wood harvesters’
training & skills – including for health and safety (H&S);

-
improved communications (mobile phone networks,
broadband internet access, etc.) for and co-operation between small and micro wood-harvesting
firms to support logistics and health & safety in rural, especially remote,
areas;

-
finance for wood-harvesting machinery through
specialised financial engineering, in the form of e.g. lease-back, loan guarantees,
group purchasing, etc.

In
addition, the Commission and Member States could examine the scope for: facilitating
the development of multi-modal transport systems; as well as the long-term
harmonisation of transport legislation on the weight, axle weights &
dimensions of lorries - with convergence towards higher capacity modules and
vehicle combinations within the EU, and short & medium-term modulation of
the same on appropriate routes.

Moreover,
the Sulphur Directive[38]
impact on fuel costs, especially for bunker fuel which is used in the ships
transporting EU F-BI goods by sea and canal, needs to be further examined.

Structural adaptation

As can
be seen from the summary in Table 3, above, SMEs and moreover micro enterprises
are the norm throughout most of the F-BI, large firms being limited to the pulp
and paper manufacturing industries and parts of the wood-based panel and
sawnwood sub-sectors.

Individually,
small EU firms cannot benefit from the economies of scale enjoyed by their
larger rivals or the substantial subsidies provided to some overseas
competitors by their governments. Thus, they typically suffer from relatively
high unit costs. To compound this fact, they also face high costs for finance,
both for raising capital investment and for operational liquidity. Nonetheless,
companies of all sizes and in different parts of the value chains can benefit from
networking, especially as sectoral or regional clusters. For example, firms
specialising in the same product area could co-operate to reduce upstream
supply costs, whilst sharing the benefits of bigger orders downstream.

Societal
changes, such as shifting to digital media, combined with the economic and
financial crisis, have negative impacts on the demand for certain F-BI
products, creating structural over-capacities. Thus firms require significant
restructuring and/or changes in the sectoral supply of products, with a
corresponding adaptation in skills. To this end, the
pioneering work done by the printing sector on socially responsible
restructuring may be transferable to other sub-sectors. All the
F-BI stakeholders are thus encouraged to continue to collect and disseminate
data and other information as a basis for decision-making on company
restructuring. In this context, the four F-BI sub-sectoral
social dialogues may have a key role in facilitating this transformation.

The restructuring,
especially for small and micro firms, can be facilitated also at the Member
States’ level, through for example: co-ordination (co-operatives, networking,
clusters);  implementation of the EU Small Business Act (SBA)[39] and other
relevant SME schemes; promotion of and training on how to use the European
Social Fund (ESF)[40]
and European Globalisation Adjustment Fund (EGF)[41], including
for retraining & re-skilling of employees in industries undergoing severe
structural adaptation; and providing an access to finance at competitive rates.

Innovation & RTD

The EU
is a high-cost producer of wood-based and related products. So, in addition to
providing technological advances, RTD and innovation are needed for resource-
and energy-efficient processes and new innovative
products, which will contribute to reducing production cost and increase added
value.

Beyond
incremental improvements, breakthrough technologies, together with new cross-sectorial
business models are needed for the F-BI’s transition to Europe 2050, supporting
more added value and jobs. "Bio-based" products, as outlined in
Horizon 2020[42],
offer important scope for this within the fourth F-BI value chain.

The
Forest-based Sector Technology Platform (FTP) is a key independent instrument
for co-ordinating
sectoral RTD and innovation strategy, such as the Strategic Research Agenda
(SRA) and its 2030 Vision, and participation in EU frameworks like Horizon 2020
& COSME[43].
European Innovation Partnerships (EIPs) and SPIRE[44]
also offer potential. Even so, access to projects still remains difficult for
small and micro firms, for which development is often expensive, e.g. re-tooling
costs, and it also represents a high risk.

In addition
to the EU Programmes - COSME and Horizon 2020, Member States and the F-BI may
identify and develop means, for small and micro firms to participate in RTD
& innovation (including design) and facilitate their access to R&D
funding. In appropriate cases, they could then catalogue and spread such good
practices, also sharing them at EU level, including with linguistic
translations. In this context, the Commission may have a co-ordinating role to
play.

Furthermore,
the European Structural and Investment Funds (in particular the ERDF, the European
Agricultural Fund for Rural Development (EAFRD) and the ESF) may be invested
into research and innovation in the area of forestry, wood-based and related products,
provided such investments form part of the relevant national or regional smart
specialisation strategies.

Education, training and skills, including
shortages; ageing workforce

Needs
for education, training and skills, including to maintain high labour
productivity, span all F-BI sub-sectors, but their lack is starkest in small
and micro firms in: wood harvesting, woodworking, furniture and printing. New F-BI
entrants need not only qualifications but must also gain sectoral knowledge,
such as artisanal crafts, from experienced staff. Combined with their own
experience, these build their skills. All staff also need life-long learning to
enhance skills, improve productivity and supply new markets.

Ageing
workforces persist across all the F-BI, often partly because of a negative
sectoral image and modest pay deterring young entrants, who may be more
attracted to other, more tempting careers. Decent work, fair pay and working
practices, flexible to evolving technical and social needs, are essential to
attract and retain staff. Moreover, shrinking workforce due to an ageing
population in the EU and urbanisation also concern forest owners and thus
negatively impact on the wood mobilisation. With regard to the latter, the
ageing and urbanisation of forest owners raises the need for them to have
access to relevant education, training and skills development. This issue is
addressed in the new EU Forest Strategy: for forests and the forest-based
sector, which this Blueprint accompanies.

In this
context, it would be worthwhile for employers and trade
unions, vocational and educational institutes and other bodies involved in
education and training systems and other stakeholders, as appropriate, to work
together, especially within the relevant EU Sectoral Social Dialogue Committees
and European Skills Alliances, to identify needs and provisions for education,
training and skills development throughout the F-BI and wood harvesting. The
scope could include: mapping of F-BI & related sub-sectors, so as to match
tasks with qualifications; development and use of training courses and skills
standards; exchange programmes between students and professionals; skills
transfer between experienced craftsmen and new entrants; development of
work-based learning and apprenticeship systems (within the European Alliance
for Apprenticeships); life-long learning (LLL) to adapt to new technology and
markets, and adapting work patterns to evolving societal needs.

In
addition, the deployment of new and advanced technologies in the F-BI sectors
could lead to the generation of new knowledge intensive and high-tech jobs,
which could be appealing to the new generations and help to rejuvenate the
sector workforce.

With a
view to adapting knowledge and skills, the F-BI stakeholders may engage in a
network of Research, Education and Training Centres on sustainable raw
materials management. There could be scope to include such an initiative into
the Knowledge and Innovation Community (KIC)[45]
on Raw Materials.

Specific
elements that cannot be addressed through existing EU or national programmes,
could be further explored by the Commission, together with the above actors, to
find solutions.

Coherence of EU legislation and costs arising

Real
or potential inconsistencies within and between both EU and Member State
policies affecting the sector, may have unintended consequences with related
administrative burden and costs.

In this
context, a cumulative cost assessment of the EU legislation affecting the EU
F-BI value chains might provide a valuable feed-back for future policy making,
including “smart regulation”[46].
The results could contribute to a wider analysis of impacts, including costs,
benefits, and coherence, of policies and legislation.

Furthermore,
as part of a review foreseen for 2015 of the functioning and effectiveness of
EU "Timber Regulation" (EU TR)[47]
in preventing illegal wood and wood-based products from being placed on the EU
market, the Commission will look at the administrative consequences of the
Regulation, in particular for small and medium-sized firms. The impacts on
micro enterprises could also be considered, ideally hand-in-hand with overall
cost-efficiency. As regards the product coverage outlined in its annex, this
will also be reviewed and, if appropriate, be revised via delegated acts.
Specific consideration will be given to Ch. 49 (Printed goods) of the EU
Combined Nomenclature, taking into account the competitiveness of the sectors
concerned.

Means
may also be examined to improve the coherence, efficiency, cost-effectiveness
and traceability of providing and accessing technical information (e.g.
phytosanitary; legality & sustainability; standards; product safety, etc.)
required to place wood and wood-based goods on the EU and other markets, as
well as in procurement processes, labelling schemes and other contexts.

In this
context, it would be also important to avoid having
different sustainability criteria for different wood assortments, depending
on respective end uses.

Implementation
of EU climate policy, including beyond 2020

The
climate change mitigation potential and contribution of the F-BI is explicit in
the carbon-accounting rules for land use, land-use change and forestry (LULUCF)[48].
The international rules for reporting and accounting of the so-called harvested
wood products (HWP), e.g. sawnwood, panels and paper, were developed at the
2011 Durban climate conference and now allows for recognition of the storage of
carbon in wood products. The EU rules for applying for the Greenhouse Gas
reporting and accounting of Member States (and other parties to the Kyoto
Protocol) but not the individual enterprises.

Production and energy emissions
of energy-intensive F-BI sub-sectors, specifically of wood-based panels and
pulp & paper, are subject to the Emissions Trading System
(ETS)[49].
These are on the list of sectors liable to "carbon leakage"[50] (relocation
outside the EU due to high carbon price), being revised for 2014. It is important
that the revision of the list is performed in an open and transparent manner,
in accordance with the requirements of the ETS Directive, taking fully into
account the specific features of industries and preserving the competitiveness
of the industries, including energy costs.

International competition, trade and
co-operation

The EU
F-BI provide high-quality goods and services to high technical, social and
environmental standards. Global competitors, availing of similar technology
levels but not subject to the same discipline, produce and
export at lower costs. Moreover, they often benefit from production and/or
export subsidies from their governments, and in some cases abuse EU
intellectual property rights (IPR), e.g. for designs, whilst corresponding EU
exports often face tariff barriers on other markets.

In this
context, trade agreements and relevant trade-defence instruments are essential
tools for addressing these challenges, in order
to provide a more level global playing field. Nevertheless, the differences in
the countries’ competitive advantage will remain. In
addition, the Commission could continue to pursue sectoral dialogues with major
F-BI trading partners such as Russia, Canada and Japan on wood-based and
related products. It may also convene meetings at appropriate levels, on
sectorally relevant issues (e.g. competitiveness, market access, standards,
FLEGT) in the form of a public-private sector round table, including when
necessary with the F-BI of key partner countries.

Information, communications
and image

Information
of all kinds (data, legislation, etc.) is the life-blood of the F-BI, flowing
within and between sub-sectors and beyond. One resultant of this information is
the set of sectoral images perceived by the F-BI itself, EU and Member State
institutions and the public. Accordingly,
improved information and its better communication within, to and from the EU
F-BI, would improve the efficiency of sectoral functioning and hence contribute
to cost reduction.

In this
context, the industry’s “Two Sides” initiative, which aims to promote the
responsible production and use of print and paper and to dispel erroneous
technological or environmental misconceptions pertaining to them, is helpful.

It is
therefore essential that all stakeholders and other interested parties
substantiate their statements and commitments,
for example regarding the technological and/or environmental performance of the
use of electronic media versus paper-based media. Distinguishing between these
two formats could be by means of adequate a priori impact assessments
based on life-cycle analyses (LCA). To this end, comparative
LCAs by F-BI stakeholders on the technological advantages and environmental
impacts of digital and paper media could be valuable.

More
widely, the F-BI stakeholders could also engage in raising their awareness of
sub-sectoral issues having impacts along their overall value chains.

With an
aim of increasing sectoral awareness, knowledge and visibility among EU and
Member State bodies and the public, the F-BI are encouraged to carry out
information campaigns, including on-site visits. Such actions could ideally
include: presenting the F-BI to young people, e.g. school visits; providing
knowledge exchanges between the Commission and Member States' services and the
F-BI on each other’s activities; increasing public interest in and knowledge of
the legal and sustainable sourcing of wood, wooden materials and wood-based
products, together with their other sustainable aspects, all on an LCA basis,
including for making informed consumer choices.

Member
States and F-BI stakeholders, in addition to existing and planned actions, may
also identify and develop events for sectoral visibility and help improve the
sectoral image, such as initiatives rewarding innovation in the sector, a
European Annual F-BI Communication Day - with site visits to F-BI plants
throughout the EU, annual joint F-BI sectoral events (including EU institutions
et al.), annual college & university days for prospective F-BI students.

VI. Conclusions

Given
the above steps needed to make this transition and the accompanying need for
sectoral restructuring to achieve it, a radical change in mind-set is also
needed amongst all the F-BI’s stakeholders (employers, trades unions, public
authorities, academia, customers, etc.) and other interested parties. This is
especially vital in industries dominated by SMES and micro firms, many of which
are family-owned businesses.

The
Commission's role will be to inspire, co-ordinate and facilitate sectoral
involvement to carry out these activities and will be assisted by the Advisory
Committee on Community Policy regarding Forestry & Forest-based Industries and
its working groups, one of which has already assisted during 2012 in helping to
identify the challenges and activities developed here. To assist in overseeing
the implementation of this Blueprint, the updated AC F-BI, the EU Expert Group
on Forest-based & Related Industries, could set up a working group and hold
a minimum of a meeting every year to monitor and assess sectoral progress and
report to the Commission.  Where appropriate, the implementation will be in cooperation
with the Standing Forestry Committee
and with the Advisory Group on Forestry and Cork.
AC F-BI will remain platform for issues related to industrial value chains.

[1] NACE Rev. 2, Divisions 16,
31, 17, 18.1. Relevant wood harvesting aspects (NACE
Rev. 2, Group 2.2) are also covered in this Blueprint. NACE Rev. 2 Regulation
is available on:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:393:0001:0039:EN:PDF.

[2] Commission
Communications: A Stronger European Industry for Growth and Economic
Recovery: Industrial Policy Communication Update (COM(2012)582
of 10.10.2012) and Integrated Industrial Policy for the Globalisation Era: Putting
Competitiveness and Sustainability at Centre Stage (COM(2010)614 of
28.10.2010).

[3] Wood which is visually
recognisable.

[4] Not visibly recognisable as
wood but its cellulose not transformed.

[5] Transformed cellulose.

[6] Indufor Oy (2013). Wood Raw Material Supply and Demand for the EU Wood-processing
Industries. Study for DG Enterprise and
Industry.

[7] Commission Decision of 30 June 2009 establishing
a template for National Renewable Energy Action Plans under Directive
2009/28/EC of the European Parliament and of the Council (2009/548/EC).

[8] RWE = roundwood equivalent,
i.e. how much wood raw material is needed for a given quantity of product.

[9] Regulation
of the European Parliament and of the Council of 20 October 2010 laying down
the obligations of operators who place timber and timber products on the market
(995/2010).

[10] Commission Communication: Forest
Law Enforcement, Governance and Trade (FLEGT): Proposal for an EU Action Plan
(COM(2003)251 of 21.5.2003).

[11] As indicated in Section V
under “Coherence of EU legislation and costs arising”, a cumulative cost
assessment (CCA) is envisaged, in line with the Commission’s Industrial Policy Communication
(COM(2012)582).

[12] EWP: customised wood-based
materials & components, having designed, uniform and predictable
properties.

[13] According to “cascade
principle”, wood resources are used in the following order of priority:
production and use of wood-based products; post-consumer recovery (collection);
re-use of products; recycling into other wood-based products; use as bio-energy
source, based on e.g. affordability, adding value & maintaining and/or
creating jobs (DG Enterprise and Industry definition: also check Indufor
study).

[14] Pöyry (2012). Employment
and value added: a comparison between the European pulp & paper sector and
the bio-energy sector.

[15] Intergraf website: http://www.intergraf.eu/index.php?option=com\_k2&view=item&id=103:the-future-of-the-european-print-industry-in-our-own-hands&Itemid=208

[16] Commission Decision of 11 May
1983 setting up a Committee on Community Policy regarding Forestry and
Forestry-based Industries (83/247/EEC)

[17] Commission Decision of 9
December 1997 amending Decision 83/247/EEC (97/837/EC)

[18] Commission Communication: Innovative
and sustainable forest-based industries in the EU: A contribution to the EU’s
Growth and Jobs Strategy (COM(2008)113 of 27.2.2008)

[19] Regulation 995/2010.

[20] CEPI
(2011). Unfold the future – The Forest Fibre Industry – 2050 Roadmap to a
low-carbon bio-economy.

[21]
CEN Definition of Bio-Based Products used in the CEN-Report
on Mandate M/429, Resolution of 3/11/09):

1. Bio-based = derived
from biomass. 2. Biomass = material of biological origin, excluding material
embedded in geological formations and/or fossilised. Note: This definition
refers to the well-known short-cycle of carbon, i.e. the life cycle of
biological materials (e.g. plants, algae, marine organisms, forestry,
micro-organisms, animals, and biological waste from households, agriculture,
animals and food/feed production). 3. Bio-based product = product wholly or
partly bio-based. Note: The bio-based product is normally characterised by the
bio-based content.

[22] Commission Communication: Strategy
for the sustainable competitiveness of the construction sector and its
enterprises (COM(2012)433 of 31.7.2012).

[23] European Commission, DG
Trade, Market Access Database: http://madb.europa.eu/madb/indexPubli.htm

[24] Mantau, U. (2012). Wood
flows in Europe (EU 27). Project report for CEPI, CEI-Bois and EPF.

[25] Commission Communication: Roadmap
to a Resource Efficient Europe (COM(2011)571 of 20.9.2011)

[26] Commission Memo: Manifesto
for a resource-efficient Europe (MEMO/12/989 of 17.12.2012). Available on: 
http://europa.eu/rapid/press-release\_MEMO-12-989\_en.htm.

[27] Indufor Oy (2013). Wood
raw material Supply & Demand for the EU Wood-processing Industries.

[28] UNECE-FAO
JFSQ (Joint Forest Sector Questionnaire) definition

[29] This is the indicative
average volume of wood harvested annually from EU forests (e.g. 2011: 345 Mm³).
However, because of partial cascade use, higher total volumes
are processed by the EU F-BI.

[30] European Commission (DG
Agriculture and Rural Development), UNECE/FAO and MCPFE (2010). Good
practice guidance on the sustainable mobilisation of wood in Europe.

[31] Council Directive of 26 April
1999 on the landfill of waste (1999/31/EC)

[32] Directive of the European
Parliament and of the Council of 19 November 2008 on waste and repealing
certain Directives (2008/98/EC)

[33] Risk & Policy Analysts
(2012). The
feasibility of introducing
a certification scheme/standard for recycling treatment facilities. Study for DG Enterprise and
Industry.

[34] Commission Communication: Making
raw materials available for Europe’s future well-being: Proposal for a European
Innovation Parnership on Raw Materials (COM(2012)82 of 29.2.2012).

[35] Council Regulation of 21.10.2005 on support for rural
development by the European Agricultural Fund for Rural Development (1698/2005).

[36]
European
Regional Development Fund. Available on: http://ec.europa.eu/regional\_policy/thefunds/regional/index\_en.cfm.

[37]  Lifelong
Learning Policy. Available on: http://ec.europa.eu/education/lifelong-learning-policy/policy-framework\_en.htm.

[38] Directive of
the European Parliament and of the Council of 6 July 2005 amending Directive
1999/32/EC of 26 April 1999 relating to a reduction in the sulphur content of
certain liquid fuels (2005/33/EC).

[39] Commission
Communications: “Think Small First” - A “Small Business Act” for Europe (COM(2008)394
of 25.6.2008) and Review of the “Small Business Act” for Europe
(COM(2011)78 of 23.2.2011).

[40] European Social Fund.
Available on: http://ec.europa.eu/esf/home.jsp.

[41] European
Globalisation Adjustment Fund. Available on: http://ec.europa.eu/social/main.jsp?catId=326&langId=en.

[42] Commission Communication: Horizon
2020 - The Framework Programme for Research and Innovation (COM(2011)808 of
30.11.2011).

[43] Programme for the Competitiveness of
Enterprises and SMEs (COSME) 2014-2020. Available on: http://ec.europa.eu/cip/cosme.

[44] Sustainable Process Industry
through Resource and Energy Efficiency. Available on: www.spire2030.eu.

[45] European Institute of
Innovation & Technology. Available on: http://eit.europa.eu.

[46] Commission Communication: Smart
Regulation in the European Union (COM(2010)543 of 8.10.2010).

[47] Regulation 995/2010.

[48]
Proposal for a Decision of the European Parliament and of the Council on
accounting rules and action plans on greenhouse gas emissions and removals resulting
from activities related to land use, land use change and forestry (COM(2012)93
of 12.3.2012).

[49] Directive of the European
Parliament and of the Council of 13 October 2003 establishing a scheme for
greenhouse gas emission allowance trading within the Community (2003/87/EC).

[50] Commission
Decision of 24 December 2009 determining, pursuant to Directive 2003/87/EC of
the European Parliament and of the Council, a list of sectors and subsectors
which are deemed to be exposed to a significant risk of carbon leakage (2010/2/EU).

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