Malaysia
Huge demand for activated carbon
Zainal Abidin Abdullah the General Manager of the Sarawak Timber Industry Development Corporation (STIDC) has said there is a huge demand for activated carbon derived from biomass. He noted that to benefit from this potential it will be important to develop a strong framework for biomass research and foster collaboration among government, industry and academia to enhance Sarawak’s role in the renewable energy market.
He added that collaborative research between STIDC and the Forest Research Institute Malaysia (FRIM) showed that Sarawak’s biomass had excellent properties for producing energy pellets.
In 2023 Sarawak’s export value for wood pellets reached RM44.474 million, almost double that of the previous year mainly due to demand in France, Japan and South Korea.
Plywood exports to India
The Ministry of Commerce and Industry India had several months ago announced that the export of panel products to India is subject to the Mandatory Bureau of Indian Standards (BIS) Certification requirements from 28 February 2025.
The Malaysian Timber industry Board (MTIB) has provided information on the Indian Standard.
Updated National Climate Change Policy
The Ministry of Natural Resources and Environmental Sustainability has launched the National Climate Change Policy (NCCP) 2.0, an updated policy that introduces a new framework for Malaysia’s transition towards a low-carbon economy.
The Minister, Nik Nazmi Nik Ahmad , said the NCCP 2.0 is an umbrella policy that ties together all climate initiatives, provides a clear pathway for governance, low carbon development, adaptation, climate financing and partnerships as well as serves as the backbone for the drafting of Malaysia's very own Climate Change Act, which is expected to be completed early next year.
Nik Nazmi also hinted that driving transboundary collaboration would be Malaysia's priority, as it assumes the chairmanship of ASEAN next year.
MTIB incentives for manufacturers
The Malaysian Timber Industry Board Certification Body (MTIB-CB) gave a briefing to explain its role and the incentives available to manufacturers for developing documentation based on MTIB-CB Standard Product requirements. The MTIB-CB provides recognition for the Timber Product Quality Assurance Scheme.
The primary objectives are to assist the local industry in fulfilling quality assurance requirements, ensuring consistent product quality and guaranteeing that the certification process adheres to the developed standards for consumer safety.
Currently, MTIB-CB oversees two product standards: the Plywood Certification Standard (MTIB-CB-PS-01), which outlines requirements for various plywood types and the Formaldehyde Emission from Wood-Based Panel Standard (MTIB-CB-PS-02), specifying emission levels for wood-based products.
Technology in the forests
Huawei has developed what is termed the TECH4ALL programme an initiative to protect biodiversity and prevent illegal logging in Sarawak's rainforests.
The project enables forest rangers to use tracking devices from Huawei's cloud technology and artificial intelligence.
According to Huawei Public Affairs and Communications Manager, Atiqah Khairudin, one of the domains focused on by Huawei at TECH4ALL in Malaysia is the environment which sees them working closely with partners in Sarawak to ensure that forests are protected using technology.
"Since the implementation of this project in 2021 with the Sarawak Forestry Corporation, Sarawak Multimedia Authority and the Sarawak Forestry Department, 77 sounds of activity have been detected including chain saws and vehicles in real time," he reported.
EUDR compliant plywood
According to the Sabah Forestry Department the State has exported a 45 cubic metre shipment of what has been called ‘EUDR-compliant’ plywood to Poland.
The raw material was said to be responsibly sourced from Sapulut Forest Development, a Sustainable Forest Management License Agreement licensee under the Sabah State Government’s jurisdiction and the oversight of the Sabah Forestry Department.
Frederick Kugan, Chief Conservator of Forests for the Sabah Forestry Department said “through compliance with the EUDR we are not only enhancing the credibility of Sabah’s timber products but also contributing to global efforts in combating deforestation and climate change”.
“Our success in delivering the first EUDR-compliant shipment to Europe amid ongoing debates over the regulation is a reflection of our dedication to preserving our natural resources and advancing Sabah’s forestry sector”, he said.
To demonstrate its commitment to sustainability Sabah has developed the Sabah Timber Legality Assurance System (Sabah TLAS), a mandatory third-party audited system that ensures legality and transparency across the entire timber supply chain.
Borneo Forestry Cooperative
The Borneo Forestry Cooperative (BFC) was founded in 2009 by Sabah Softwoods and Asian Forestry Company (Sabah) in collaboration with Boden and Associates Ltd. The BFC serves as a collaborative platform bringing together industry leaders to drive innovation in plantation management.
From an informal cooperative the BFC has evolved into a Malaysian registered company, BFC Research and Development Sdn Bhd. During a Management Open Day the work at Sapulut Forest Development (SFD) was highlighted.
SFD has planted over two million fast-growing trees, including Laran and Red Mahogany species. At the open day managers from SFD said the Malaysia’s timber industry needs innovative approaches to reduce reliance on natural forests.
World Bank raises growth forecast
The World Bank has upgraded Malaysia's economic growth forecast to 4.9 percent in 2024 from its initial 4.3 percent forecast set in April according to Apurva Sanghi, its lead economist for Malaysia.
He said both domestic and external factors back the upgraded growth forecast as the global economy is doing much better than expected six months ago.
On the domestic front, he said the positive economic momentum, political stability and an increasingly conducive policy environment that boosts and mobilises more investments have contributed to the upgraded growth projection.
Indonesia
Ministry preparing task force to bolster forest protection
The Minister of Forestry, Raja Juli Antoni, has reported the ministry is in the process of forming a palm oil task force to strengthen the supervision and protection of forest areas.
"Through the task force, we can make an agreement, data reconciliation, (determine) which data is the most valid, the maximum fine for state revenue and everything can be discussed in the task force," he explained.
Antoni informed that he and the Head of the Financial and Development Supervisory Agency (BPKP), Muhammad Yusuf Ateh, discussed the plan to form the task force .
In related news, the Minister confirmed his commitment to implementing the forest protection targets set by President Prabowo Subianto's initiative. He emphasised that law enforcement will be a priority.
In a meeting at the Attorney General's Office strengthening law enforcement in forest protection was discussed. The minister emphasised that the government will establish a task force for law enforcement to protect Indonesia's forests. The prosecutor's office will participate in this task force.
Attorney General, Sanitiar Burhanuddin, stated that they openly accepted collaboration as a means of enhancing inter-institutional coordination. The Attorney General’s Office has also engaged with various ministries to bolster law enforcement efforts.
The National Police Chief General Listyo Sigit Prabowo stated the police and the Ministry of Forestry will collaborate to ensure the security of Indonesia's forests by exchanging essential information and data.
Ministry and Armed Forces—co-operation
The Ministry of Forestry and the National Armed Forces (TNI) Headquarters are planning to sign a memorandum of understanding which will serve as the basis for cooperation and collaboration between the two agencies.
The MoU will include cooperation in rehabilitating damaged forests including replanting deforested areas.
"Considering the limited human resources that we have the success of the Ministry of Forestry in protecting forests is very dependent on cooperation and collaboration with the TNI which has a wide network reaching remote villages," said the Minister.
Opportunity to increase exports to the US
Some wood product manufacturers are of the opinion that with the change of government in the US wood product imports from China may decline presenting an opportunity for Indonesia to boost its exports.
Abdul Sobur, the General Chairperson of the Indonesian Furniture and Crafts Association (Himki), stated that Indonesia has the opportunity to boost its exports to the US under this condition. However, increasing Indonesian furniture and craft exports to the US presents challenges.
Indonesia faces competition from countries like Vietnam, Malaysia, Canada and Mexico, all of which have also recognised this market opportunity.
Notably, Vietnam stands out as a significant competitor due to its well-developed infrastructure and proactive export policies.
Another challenge has emerged is the ‘America First’ initiative which emphasises domestic products which, said Sobur, may hinder export opportunities particularly if the US enforces stricter import regulations.
For this reason, Sobur suggested that Indonesia must take full advantage of export cooperation agreements such as the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).
Encouraging access to the UKM BISA export programme
The Minister of Trade, Budi Santoso, stated that the Ministry is working to boost furniture exports and expand into the global market and this is crucial because furniture is a key export product of Indonesia.
Consequently, the Ministry of Trade continually supports the SMEs’ Dare to Innovate, Ready to Adapt to Exports’ (UMKM BISA Export) programme.
The UKM BISA Export programme aims to enhance competitiveness, innovation and adaptability to global market demands.
“To support the UKM BISA Export initiative, the Ministry of Trade is working to enhance market access for Indonesian products in the global market. This effort includes several actions, such as facilitating business participation in international product exhibitions, engaging in trade missions, and leveraging Indonesia's trade agreements with partner countries," said the Minister.
The Minister stated, "business representatives can take advantage of over 40 trade representatives from the Ministry of Trade stationed overseas who are responsible for promoting domestic products."
Specifically for rattan furniture the Ministry of Trade will assist rattan furniture SMEs to increase exports.
"Our support will include the creation of unique rattan designs and prototypes to enhance their acceptance in the global market as well as opportunities for exhibitions overseas," said Minister Budi.
Social Forestry—calls for multi-stakeholder collaboration
A recent forum urged a better multi-stakeholder collaboration to engage communities in managing local forests aligned with Indonesia's climate goals. According to the Director of the Regional Community Forestry Training Centre for Asia and the Pacific (RECOFTC) Indonesia, Gamma Galudra, communities can still make more use of forest resources to improve their welfare.
He then called for collaboration between social forestry groups and other stakeholders such as companies, non-governmental organisations and academia as this can help pave the way for better management of social forestry programmes especially in terms of improving human capital and institutional capacity as well as developing business aspects.
Innovative funding to support conservation activities
The Indonesian government is in the process of preparing a regulation that will allow for funding innovations aimed at supporting conservation activities as part of the Law on Conservation of Biological Natural Resources and Ecosystems (KSDAHE).
Satyawan Pudyatmoko, the Director General of Natural Resources and Ecosystem Conservation (KSDAE) at the Ministry of Forestry stated that there is a significant funding gap for biodiversity management.
He highlighted that an estimated Rp33.6 trillion is needed annually but the available funds amount to only Rp10.2 trillion, which includes allocations from the State Budget. He mentioned that there is potential funding, including grants from various international sources in line with the global commitments.
Could wood energy boom threaten SE Asian forests and communities?
Research presented at the recent ASEAN Summit has warned of threats to Southeast Asia's tropical forests due to the rapid growth of the wood-to-energy sector.
The report, ‘Unheeded Warnings: Forest Biomass Threats to Tropical Forests in Indonesia and Southeast Asia’, suggests energy policies push a “false climate solution” that could result in significant deforestation.
The report, published by organisations such as Earth Insight, Auriga Nusantara and Forest Watch Indonesia highlights the risk of negative impacts from biomass energy policies.
A guide for smallholders on EUDR
Indonesia, Malaysia and the European Union plan a practical guide to the EUDR for smallholders according to the Council of Palm Oil Producing Countries (CPOPC).
The guide will be for smallholders and small businesses in the palm oil, coffee, rubber, timber and cocoa sectors. CPOPC is an intergovernmental organisation for palm oil producing countries.
Indonesia has said it fears the regulation risks driving smallholders and SMEs out of the global supply chain.
Indonesia and UNEP establish cooperation on environment and forestry
Before the change of government the former Ministry of Environment and Forestry and the UN Environment Programme (UNEP) agreed on cooperation in the fields of environment and forestry, including the conservation and sustainable use of natural resources.
The cooperation was founded in a memorandum of understanding (MoU) by former Environment and Forestry Minister, Siti Nurbaya and Regional Director of UNEP in Asia and the Pacific, Dechen Tsering.
Dechen said that through this collaboration the UNEP will provide support for priority programmes related to environmental and forestry issues as well as commitments and initiatives at the international, regional, and national levels.
Trade Minister hoping to wrap up IEU-CEPA talks
The new Minister of Trade, Budi Santoso, has affirmed that he will pursue the speedy conclusion of negotiations on the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA).
He noted that the deadline for the completion of the agreement has been pushed back as Indonesia and the EU are not in agreement on several matters and it is necessary to find solution as soon as possible.
Earlier, the Director General of International Trade Negotiations at the Ministry of Trade, Djatmiko Bris Witjaksono, advised that the IEU-CEPA negotiation has stalled due to policy disagreements.
Witjaksono also described the European Union Deforestation Regulation (EUDR) as a major stumbling block that has prevented the two parties from finalising the long-awaited economic agreement.
Boosting exports of sustainable forest products
The Ministry of Environment and Forestry is continuing its efforts to increase the export value of responsibly and sustainably produced forest products.
Ristianto Pribadi, Director of Forest Product Processing and Marketing Development in the ministry stated that efforts to boost export value will be accompanied by measures to enhance product value in the domestic market, thereby promoting the downstream processing of forest products.
"The success of sustainable forest management depends on all parties involved in the wood product supply chains until they reach consumers. To this end, it is crucial to improve traceability, efficiency and the preservation of raw material sources," he said.
He explained that modernising equipment in the forest and wood product processing industry can increase the value of the raw materials used and reduce production waste.
He urged the forestry sector to innovate in addressing global challenges, particularly those related to greenhouse gas emissions.
In related news, the Director of Forest Products and Plantation Industry in the Ministry of Industry (Kemenperin), Setia Diarta, revealed that wood processing mills in Indonesia use mostly imported machinery which could create opportunities for local companies to manufacture machinery possibly through joint ventures with overseas manufacturers.
She anticipates that through collaboration between Indonesia and China there can be technology transfer.
Forestry sector under performing
Sudarsono Soedomo, Professor of forestry at the Bogor Agricultural Institute (IPB) pointed out that there has been limited investment in the forestry sector which hinders future prospects.
According to him, out of the total domestic Investment between 2020-2022, which amounted to IDR3,256 trillion, the forestry sector only managed to attract investments of IDR28 trillion.
Out of the total Foreign Direct Investment of IDR50,267 trillion in 2023 only IDR96 trillion was invested in the forestry sector.
"The small investment is inversely proportional to the vast forestry area. Of the total land area in Indonesia, 2/3 is forest area," said Sudarsono Soedomo in a statement. He added; the natural forest industry is shrinking while the development of plantation forests is progressing very slowly. Forests account for 2/3 of the land but the forestry sector contributes less than one percent to the GDP".
Responses to delay in EUDR implementation
The Indonesian government has called for the revision of the European Union Deforestation Regulation (EUDR).
Airlangga Hartarto, the Coordinating Minister for Economic Affairs, said that Indonesia has a number of concerns regarding the regulation including the requirement for Indonesia to provide detailed geo-location.
In addition, Indonesia has expressed its concern to the EU on the so-called country rating approach.
In related news, Hartarto invited all ASEAN member countries to unite in responding to global sustainability policies which tend to be discriminatory. Airlangga conveyed this at the 24th ASEAN Economic Community Council—AECC Ministerial Meeting.
In the midst of increasing global attention to the impact of the implementation of the EU Deforestation Regulation (EUDR), which has the potential to disrupt manufacturing production and hamper trade in wood, plant and plantation-based products, Indonesia continues to strive to build networks and gather support.
The Association of Indonesia Forest Concession Holders (APHI) sees the postponement of the European Union Deforestation Regulation (EUDR) until 2026 as an opportunity to prepare its members for the Regulation.
APHI has urged the government to advocate for SVLK as the primary instrument to address the EUDR and bolster its position in the European Union market. "The government must persist in advocating for SVLK as a recognised tool for the European Unionmarkets in the context of the EUDR," he added.
APHI has urged member companies to engage in extensive consultations with the government to ensure compliance with all EUDR requirements. This consultation is crucial for the Indonesian forestry industry to establish operational standards that align with the regulations set to take effect in 2026.
Abdul Sobur, Chairman of the Indonesian Furniture and Craft Industry Association (HIMKI) also said the postponement of the implementation of the EUDR provides an opportunity for the furniture and craft industry in Indonesia to prepare and that the Indonesian furniture industry is making significant efforts to align its supply chain with the traceability and sustainability standards outlined in the EUDR.
"However, small and medium enterprises (SMEs) face the biggest challenge as they still struggle to access traceability technology and encounter high verification costs," Abdul stated.
Social forestry raises income for 1.4 mlllion families
The government's social forestry programmes have increased the income of families living near forests according to Minister of Environment and Forestry Siti Nurbaya. She stated that the social forestry programmes cover eight million hectares with around 1.4 million families having access to them. These programmes have increased family monthly incomes to around Rp2.3 million (approximately US$152).
The Norwegian Ambassador to Indonesia, Rut Kruger Giverin, expressed appreciation for the Indonesian government's efforts to reduce the impact of deforestation and environmental pollution through various initiatives, including social forestry.
She emphasised the importance of developing the social forestry programme in Indonesia, as it is considered to have gained attention at the global level.
India
Shortage of affordable land holding back home construction
In a press release, the Confederation of Real Estate Developers' Associations of India (CREDAI) has pinpointed two aspects that it believes would help boost both the supply and demand for affordable housing in India.
According to CREDAI the availability of land and the current price cap on land for affordable housing needs to be addressed to ensure sustained growth of the affordable housing segment.
CREDAI asserts that the cost of land, which accounts for nearly 50 percent of the total cost of any housing project, is a huge financial burden.
This is a problem for developers especially in Tier 1 cities, where the cost of land is much higher than other regions of the country. CREDAI believes affordable land costs for affordable housing projects would help and enable developers to build more houses under the segment.
Data from the National Housing Bank reveals a 24 percent increase in house prices in India since June 2018 underscoring the need for revision of the price cap on affordable house prices.
The real estate industry advocates a re-evaluation that reflects current market realities and ensures adequate availability of affordable housing units. CREDAI believes the definition should be based on the size of the house and not the price.
Boman Irani, President, CREDAI “Affordable Housing has been one of the most important segments of Indian Real Estate in the past few years, which has fulfilled the dreams of millions of Indians to become homeowners. Currently, there is a need to alter some fundamental aspects to get the segment back on a robust growth trajectory that can lead to sustained and sustainable growth.”
In other real estate news, a press release from CREDAI says a recent Colliers-CREDAI Report forecasts the Indian real estate is set for 16 percent annual growth to propel the market to US$10 trillion by 2047.
The interplay between real estate and India’s economic growth journey over the next few decades is explored in the latest report “Indian Real estate: The Quantum Leap” by Colliers in collaboration with the Confederation of Real Estate Developers' Associations of India (CREDAI).
The report identifies that long-term growth in real estate is underpinned by six salient growth levers which include rapid urbanisation, infrastructure development, digitalisation, demographic shifts, sustainability and investment diversification, all of which will form the foundation for a leap in Indian real estate sector growth.
Vietnam
Wood and wood product (W&WP) trade highlights
According to the General Department of Customs, W&WP exports in October 2024 reached US$1.5 billion, up 20 percent compared to September 2024 and up 17 percent compared to October 203.
Of the total WP exports fetched US$1.01 billion, up 12 percent compared to September 2024 and up 15 percent compared to October 2023.
In the first 10 months of 2024, the W&WP exports reached US$13.2 billion, up 21 percent over the same period in 2023 of which WP exports alone contributed US$9.05 billion, up 23 percent over the same period in 2023.
W&WP exports to Japan in October 2024 amounted to US$148 million, up 20 percent compared to the previous month and up 10 percent compared to October 2023.
In the first 10 months of 2024 W&WP exports to the Japan were to US$1.4 billion, up one percent over the same period in 2023.
In October 2024 exports of kitchen furniture were valued at US$129 million, up 20 percent compared to the previous month and up 10 percent compared to October 2023. In the first 10 months of 2024 exports of kitchen furniture reached US$1.16 billion up 25 percent over the same period in 2023.
Vietnam's W&WP imports in October 2024 cost US$250 million, up seven percent compared to September 2024 and up 40 percent compared to October 2023. In the first 10 months of 2024 Vietnam spent US$2.28 billion for W&WP imports, up 28 percent over the same period in 2023.
NTFP exports in September 2024 decreased for the 3rd consecutive month, reaching US$50.44 million, down 25 percent compared to August 2024 and down five percent over the same period in 2023. In the first nine months of 2024 NTFP exports accounted for US$594.80 million, up 10 percent over the same period in 2023.
Vietnamese wooden furniture in the US
Vietnamese wooden furniture is bolstering its export value and market share in the US wooden furniture market as imports. According to the US International Trade Commission the importation of wooden furniture into the US during the first eight months of 2024 amounted to US$13.8 billion, a 5.6 percent increase from the same period in 2023.
Vietnamese wooden furniture exports to the US were US$5.6 billion in the first eight months and accounted for around 40 percent of the total US import value for wooden furniture.
The interest of American consumers in products from Vietnam is indicative of the increase in value and market share of Vietnamese wooden furniture.
As the US housing market recovers it is anticipated that US wooden furniture imports will continue to increase. As the Federal Reserve commences to reduce interest rates it is probable that home loan rates will continue to fall which will stimulate home sales and, as a result, stimulate the demand for wooden furniture.
The Institute for Supply Management (ISM) has reported that US inventory levels are declining at the quickest rate in 2024, indicating that manufacturers are maintaining low inventory levels.
The positive growth trajectory of Vietnam's W&WP exports to the US is anticipated to be bolstered by this favourable supply-demand factor in the final months of 2024.
However, the US imposes trade protection measures on Vietnamese exports. The intensity of domestic competition for US industries is on the rise as a result of the increased imports.
In this context it is probable that US companies will intensify their utilisation of trade instruments in order to mitigate competitive pressures.
Consequently, the Vietnamese wood industry must exercise caution and establish close relationships with the Vietnamese Trade Office abroad and the Trade Remedies Authority (Ministry of Industry and Trade) in order to receive early warnings of trade protection investigations.
This allows for the implementation of proactive strategies to maintain market share in critical markets.
Vietnam is one of the three largest net exporters to the US according to Mr. Do Ngoc Hung, the Head of the Vietnamese Trade Office in the US. Consequently, Vietnam is perpetually "on the radar" of US trade defence activities.
There is a trend towards increased trade protection activities. In these instances US authorities prioritise the protection of domestic companies.
Mr. Hung recommends that exporters to the US remain prepared to address prospective litigation filed in the US against their export products.
This entails striving to achieve the most favourable outcome possible by maintaining close collaboration with the Ministry of Industry and Trade and the Vietnamese Trade Office in the US to provide the investigating authorities with comprehensive and expeditious information.
Vietnam's wood industry sector aims to export US$15.2 billion worth of its products this year, an increase from US$14.47 billion last year.
Since the slowdown in 2023 from the beginning of this year W&WP associations and enterprises have been proactive in production and seeking export markets.
A series of market exploration fairs were held attracting customer interest in Vietnamese wood products in key production areas, including Ho Chi Minh City and Binh Dinh and Binh Duong Provinces.
Vietnam’s ambitious forestry master plan
Decree No. 895/QD-TTg of 24 August 2024 presents a master plan for the sustainable development of the forestry sector. Key objectives encompass the conservation, cultivation and enhancement of forest resources and land.
The focus of this planning extends to forested lands as well as those earmarked for afforestation and forestry infrastructure such as plant nurseries, ranger stations and timber transport routes.
Minister of Agriculture and Rural Development, Le Minh Hoan, underscored the pivotal role of this master plan in unlocking the forest's potential to contribute to socio-economic growth, environmental protection and climate change mitigation.
Director Tran Quang Bao of the Forestry Department stated that the 2021-2030 National Forestry Master Plan with a vision to 2050 constitutes a significant stride in the implementation of the Planning Law and the Forestry Law.
Specific objectives of the plan include:
-maintaining a forest cover ranging from 42-43 percent nationwide
-augmenting the quality of natural forests
-achieving a 5-to-5.5 percent annual growth rate in forestry production value
Moreover, the planning sets forth targets to double the income derived from commercial plantations by 2030 compared to 2020 with projected timber and forest product exports reaching US$20 billion in 2025 and US$25 billion in 2030.
According to Director Tran Quang Bao, the plan also outlines a target of a five percent annual increase in forest environmental services reaching approximately VND4 trillion (US$161 million) per annum during the 2026-2030 period.
Key strategies encompass the transfer of advanced forestry technologies, the formulation of sustainable forest management plans and the provision of livelihood support to communities adjacent to special-use forests.
The total estimated investment for the plan through 2030 is approximately VND217.3 trillion (US$8.7 billion), sourced from both the state budget and other channels.
Remove bottlenecks in the wood supply chain
The legal origin of wood products is one of the most essential requirements for Vietnam's two main export markets, the US and the EU. This is considered a vital factor for export enterprises.
According to a survey by the Forest Trends research group led by To Xuan Phuc, wood raw materials in Vietnam come from: domestically planted wood (acacia, eucalyptus, and rubberwood), wood from domestic farms/gardens, imports of plantation and natural forest species.
It is acknowledged that many wood products in the group of bedroom furniture, office furniture, kitchen and wooden furniture parts exported to the EU are processed wood grown on areas that were previously natural forests but converted to rubber plantations.
When using this wood source businesses face challenges in traceability and transparency and accountability especially the requirement to clearly state the names of all types of wood used in exported products.
Another factor pointed out by Phuc is evidence related to the legality of raw material sources, including species names and commercial details. Some countries also require other evidence, such as forest product lists, raw wood purchase invoices or logging licenses.
Need to establish forest carbon standards
On the morning of 3 October the Department of Forestry, in collaboration with the Association of Agricultural and Rural Development Economics, organised a Workshop “Forest Carbon - Potential to Create New Financial Sources for Forest Protection and Development” with sponsorship from Forest Trends and UK PACT.
The workshop attracted the participation of about 150 direct delegates and nearly 250 online connections nationwide.
In his opening speech, Associate Professor Dr. Tran Quang Bao, Director of the Department of Forestry, said that forestry is currently the only sector with the potential for negative net emissions thanks to the process of forest protection and development and the support of international partners.
However, the forest carbon market in Vietnam is still in its early stages, facing many difficulties and challenges.
Recently, Vietnam received US$51.5 million from the World Bank for successfully capturing 10.3 million tonnes of CO2 in six provinces in the North Central region. Currently the Ministry of Agriculture and Rural Development is completing the dossier to submit to the Prime Minister for consideration and negotiation and signing the Emission Reduction Purchase Agreement for 11 provinces in the Central Highlands and South Central region with the Forestry Finance Enhancement Organisation (Emergent).
"The forest carbon market has the potential to generate large revenues for forestry helping to support forest protection, create jobs, increase income for local people and at the same time protecting and improving environmental quality said Bao, He admitted, however, that financial resources for forestry activities are still insufficient meeting only a small part of actual needs.
The Forestry Department also identified seven essential tasks to promote market development and commercialisation of forest carbon credits:
(1) Review and update the nationally determined contribution in the forestry sector;
(2) Study the potential and allocate quotas for emission reduction and carbon sequestration from forests to localities;
(3) Perfect the policy and institutional framework on the transfer and financial management of revenue from forest carbon credits;
(4) Develop Vietnam forest carbon standards, methodology for calculating emission reduction results and a system for measuring, reporting and appraising the amount of emission reduction and increased carbon sequestration of forests; guide the development and pilot implementation of several potential projects;
(5) Disseminate and enhance capacity for stakeholders on forest carbon;
(6) Continue to implement the Emission Reduction Payment Agreement with the World Bank; advising on negotiations, signing and implementing the Emission Reduction Trading Agreement for the Central Highlands and South Central regions with the Emergent Organization;
(7) Strengthening cooperation, mobilizing international resources and the private sector.
For localities the Director of the Forestry Department proposed proactively mobilising and integrating legal resources to reduce emissions and increase forestry absorption in the province while calling for the active participation of relevant parties to promote the sustainable development of the forest carbon market.
"The cooperation and commitment of all relevant parties will be the decisive factor for the success of the forestry sector in the new context," Bao said.
Japan
Rising raw material costs driving inflation
Wholesale inflation accelerated in October as renewed yen weakness drove up import costs. Bank of Japan data showed the corporate goods price index (CGPI), which measures the price that companies charge each other for goods and services, rose 3.4 percent in October from a year earlier, above market forecasts for a three percent rise.
An increase in the price of rice, coupled with the increasing cost of nonferrous metals, food and oil, pushed up overall wholesale inflation, a sign companies remained under pressure from rising raw material costs.
The Bank of Japan has signaled readiness to raise interest rates further if inflation becomes driven more by robust domestic demand and higher wages, rather than rising raw material costs.
Households cut spending again as prices rise
According to a report from the Ministry of Internal Affairs and Communications households in Japan cut spending for a second month as rising prices continue to deter consumption.
Spending by households dropped 1.1 percent from a year earlier in September after dropping almost two percent in the previous month. An increase in spending has only been recorded twice in the past 12 months and this trend is a signal to the Bank of Japan to take a cautious approach to interest rate hikes.
Furniture retailer success in Southeast Asia
One of Japan’s largest furniture retailers has been doing well with sales at its outlets in the Philippines and this is encouraging the company to widen investment in retail stores in other markets.
The furniture chain, which has outlets around Japan, started its first store in the Philippines earlier this year as it drives for growth beyond its domestic business where retail growth has slowed.
China
Vietnam launches anti-dumping probe on Chinese fibreboard
In September the Ministry of Industry and Trade in Vietnam issued Notice (No. 2549/QD-BCT) stating that, in response to the application submitted by five Vietnamese producers, an anti-dumping probe was initiated on wood fibreboard originating in China and Thailand.
The Vietnamese tax codes of the products involved are 4411.12.00, 4411.13.00, 4411.14.00, 4411.92.00, 4411.93.00 and 4411.94.00.
The Vietnam Wood Composite Panel Manufacturers Union has claimed wood fibreboard products from China and Thailand are being dumped into the Vietnamese market at very low prices causing serious damage to local manufacturers.
English versions of national standards on wood-based panels released
It has been reported that English versions of two National Standards on the Formaldehyde Emission Classification for Wood-Based Panels and Products and Indoor Load Limit Guide for Wood-based Panels have been released.
These two Standards are important guidelines in formaldehyde emission limits and indoor load limits for wood-based panels.
The National Standard on the Formaldehyde Emission Classification for Wood-Based Panels and its Products is a refinement and supplements the mandatory national standard GB 18580-2017 Formaldehyde Emission Limits in Wood-Based Panels and Its Products for Interior Decoration Materials.
These changes are aimed at promoting the production of wood-based panels in order to meet consumer demand for ‘green wood-based panels’ and to promote the ‘green’ development and transformation and upgrading of the wood-based panel industry.
The National Standard on ‘Indoor Load Limit Guide for Wood-based Panels’ based on the limit for formaldehyde emission provides guidance for the use of a number of wood-based panels in interior decoration which is of significance for protecting consumer health, eliminating indoor environmental pollution and promoting the healthy development of the wood-based panel industry.
Listed trading of log futures and options
In late October the Dalian Commodity Exchange (DCE) released notices on the listing and trading of log futures and options. The subject of the transaction is coniferous logs and provides a risk management tool for the timber industry.
Log futures are listed on 18 November 2024 followed by log options on 19 November 2024. Currently there is no night trading session for log futures and options.
After the listing of log futures and options Dalian Commodity Exchange will ensure the smooth operation of the market and create a joint force with all parties to continuously enhance timber industry participation.
They will also continue to enhance the influence of log futures prices in domestic and foreign market and enhance the ability to serve the high-quality development of China's timber industry.
Policies to encourage consumption and house renovation
China introduced preferential policies to encourage consumption of interior decoration items and to promote housing renovation.
Since the release of the “Action Plan to Promote the Replacement of Old Consumer Goods with New Ones’ in China all parts of the country have responded to this national call to carry out the renewals by replacing old household items.
In terms of promoting the "refresh" home improvement for kitchens and bathrooms subsidies have been provided to encourage decoration consumption and promote housing transformation in the provinces of Anhui, Shandong, Guangdong, Zhejiang, Guangxi Zhuang Autonomous Region, Jiangsu, He’nan, Fujian and Liaoning.
The maximum subsidy per house is not more than RMB20,000 for the purchase of furniture and decorative materials. Furthermore, the use of subsidies for purchasing green building materials and home improvement products, smart homes and house improvement suitable for the elderly living will be encouraged.
In order to accurately implement the subsidies the authorities will adapt implementation on the basis of local realities and the details of subsidies may be changed. In the home market many home furnishing companies have begun to increase corporate subsidies on the basis of government subsidies, launch new home furnishing packages targeted to cater to the market.
As much of home decoration is of wood products the wood-based panel sector benefits from this initiative. The subsidy policy is a gradual process and it is believed that under the continuous implementation of local policies consumption will be stimulated. Local obserevers comment that wood-based panel enterprises should also be prepared to actively cooperate with the implementation of local policies, introduce relevant marketing measures and link dealers around the country to revive their own development.
Anti-dumping investigation of Chinese hardwood plywood
In October the European Commission launched an anti-dumping investigation into hardwood plywood imported into the EU from China.
The investigation was initiated at the request of the nine European plywood producers. It is claimed that China’s exports of hardwood plywood are unfairly priced and use of Russian timber banned by the EU and this trade threatens the financial viability of many European companies and jobs.
The product under investigation is currently classified under the HS codes ex 4412 31, ex 4412 33 and ex 4412 34 (CN and TARIC codes 4412 31 10 80, 4412 31 90 00, 4412 33 10 12, 4412 33 10 22, 4412 33 10 82, 4412 33 20 10, 4412 33 30 10, 4412 33 90 10, and 4412 34 00 10).
Several other countries, including the US, Morocco, Turkey and South Korea have already taken action to protect their own industries from similar unfair trade practices.
EU will adopt new rules for the first time to register all imports of Chinese plywood and if it decides to impose tariffs in the future, there will be a retrospective period to prevent companies from hoarding goods to evade tariffs.
According to Eurostat data, the EU imported about 750,000 cubic metres of hardwood plywood from China in 2023 worth €327 million, accounting for more than half of imports and 30 percent of the total EU market.
Wood flooring sells well in the ‘Belt and Road’ countries
It has been reported that wood flooring from Huzhou City in Zhejiang Province has been selling well in the ‘Belt and Road’ countries.
Between January and September this year the value of Huzhou wood flooring exports to ‘Belt and Road’ countries was about RMB230 million, an increase of 6% year on year. The wood flooring products in Huzhou City are exported to more than 10 ‘Belt and Road’ countries such as Thailand, Malaysia and Vietnam.
In Nanxun District of Huzhou City, there are many wood flooring manufacturers which have successfully created green wood industry clusters. The output value of the cluster reached RMB11.33 billion in 2023 and its output of wood flooring accounted for about 35 percent of the national total. Solid wood flooring and multilayer laminate flooring are exported.
Huzhou wood flooring industry has seized the opportunity to expand its market share in the ‘Belt and Road’ countries in recent years mainly due to the rising demand for wood flooring in Malaysia and Singapore.
In order to promote wood Huzhou Customs took the initiative to help enterprises to expand overseas sales, strengthen communication with enterprises, understand their export plans and needs in advance and provide personalised customs clearance services.
Huzhou Customs also strengthened policy guidance and training for enterprises, interpreted the preferential policies in RCEP, China-ASEAN and other trade agreements in detail and publicised customs supervision requirements so that enterprises can effectively enjoy the benefits of policy decisions.
According to China Customs, the value of China’s wood product imports from the Belt and Road countries rose two percent to US$14.4 billion between January and September 2024.
Russia, Indonesia, Vietnam and Thailand are the top four countries with import values for wood products exceeding US$1 billion. Nearly 80 percent of China’s wood products imports from the Belt & Road countries are from these top four countries.
The value of China’s wood product imports from Vietnam and Thailand rose 12 percent and nine percent respectively between January and September 2024 contributing to the growth of the national total wood products imports value from the Belt and Road countries.
In contrast, the value of China’s wood products imports from Russia and Indonesia, as the largest and second largest supplier, fell three percent and eight percent respectively over the same period.
The value of China’s wood products imports from Malaysia, Poland, Belarus and Myanmar grew 30 percent, nine percent, 40 percent and seven percent to US$970 million, US$238 million, US$213 million and US$206 million respectively boosting the growth of China’s wood product imports from the Belt and Road countries.
According to China Custom, the value of China’s wood products exports to the Belt and Road countries rose five percent to US$17.8 billion between January and September 2024.
Over 60 percent of China’s wood products export value to the Belt and Road countries to the top eight countries with the export value of wood products exceeding more than US$1 billion.
The value of China’s wood products exports to almost all top the Belt and Road countries rose generally from January to September 2024. However, the value of China’s wood products exports to Philippines fell three percent to US$1.21 billion between January and September 2024.
China exported mainly paperboard and paper products, wood products, wooden furniture and seats to ‘Belt and Road’ countries and the value of these products represented around 95 percent of the national total.
The value of China’s wood product, wooden furniture and seats grew six percent and eight percent to US$35.7 billion and US$35 billion respectively, making up 20 percent and 19.6 percent of the national total for the period January to September 2024.
Growth of wood-based panel industry
The development of China's wood-based panel industry in 2023 was generally stable. According to a 2023 statistical report on China's wood-based panel industry total production capacity of the wood-based panel sector was about 335 million cubic metres, up 2.2 percent year-on-year.
The output value of wood-based panel products was about RMB764 billion, an increase of 15 percent year-on-year. The consumption of wood-based panel products was about 318 million cubic metres, an increase of 10 percent year-on-year.
In addition to Beijing, Tianjin, Shanghai, Tibet, Qinghai, Ningxia, the remaining 25 provinces had wood-based panel production in 2023. Eight provinces had a production of more than 10 million cubic metres.
Production growth in Central and South China regions was noted with Guangxi exceeding Shandong to become China's largest wood-based panel production province.
At the end of 2023 there were more than 10,100 wood-based panel manufacturers in China, down 17 percent year-on-year.
Through the continuous promotion of supply-side structural reform the structure of China's wood-based panel industry has accelerated its adjustment, low production capacity has been eliminated and enterprises that have lost competitiveness have ceased operation.
Although the number of wood-based panel enterprises has decreased, the average production capacity of enterprises is steadily improving and new production lines were mostly large-scale and technologically advanced.
In order to enhance market share and drive the development of wood-based panel enterprises the scale of top enterprises continued to expand.
By the end of 2023, there are nearly 235 large-scale wood-based panel production enterprises and enterprise groups. As of August 2024, there were 12 wood-based panel manufacturers with a total production capacity of more than one million cubic metres, of which five enterprises have a production capacity of more than two million cubic metres per year.
The total import and export volume of China's wood-based panels was 15.75 million cubic metres in 2023, an increase of 1.2 percent; The total value of imports and exports was US$6.761 billion, down 15 percent year-on-year.
China still is the major supplier of wood-based panels but in the context of the overall global trade China's wood-based panel industry needs to overcome many challenges.
EUDR
A press release from the European Parliament has confirmed implementation of the EU Deforestation Regulation (EUDR) will be delayed by a year to December 2025 “so that companies can comply with the law that ensures products sold in the EU are not sourced from deforested land”.
The press release says: “In response to concerns raised by EU member states, non-EU countries, traders and operators that they would not be able to fully comply with the rules if applied as of end of 2024 the Commission proposed postponing the application date of the deforestation regulation by one year. The European parliament agreed to this postponement as well as other amendments with 371 votes to 240 and 30 abstentions.”
An amendment, introducing a “no-risk” country category into the law was approved and the criteria for risk assessment included. The press release says “no risk” is defined as “countries with stable or increasing forest area development” and such countries “would face significantly less stringent requirements”.
This change has sparked criticism from environmental groups for undermining the regulation’s effectiveness. Critics warn that the “no risk” category could open the way for resource laundering, where products from high-risk countries could be routed through no-risk nations,
As of 15 November, no formal statements from the main timber trade associations or groups have been seen. Environmental groups were quick to express disappointment at the delay in implementation and of the introduction of the no-risk category of countries.
