Russia bets on wood to reduce its dependence on oil exports

April 3, 2021 | 5:00 am

Beyond oil and gas and in the face of environmental pressure on the most polluting industries, Russia is betting on a still little exploited resource: wood from its forests that cover a large part of the country.

In the Vologda region, 500 kilometers northeast of Moscow, dense birch and pine forests stretch as far as the eye can see. A strong smell of pungent resin and sawn wood fills the air. Here, the Segezha group fells trees with state-of-the-art machinery to transport them to the sawmill.

Dmitri Rudenko believes that the great moment for Russian wood has arrived. “What we are experiencing today is the boom in wood construction. It is the future of Russia, without a doubt, “said the vice president of this group in Moscow, at the facilities of the Sistema holding, of which Segezha is a part.

A fifth of the world’s forests are in Russian territory and further exploitation of this resource would reduce the great dependence on hydrocarbons.

At a time when the environment becomes a huge and growing concern for investors, wood, much more environmentally friendly than concrete, is a very promising sector.

‘Great future’

A leader in packaging made of paper and different types of construction wood, Segezha recently opened the first Russian factory for the manufacture of CLT (cross-laminated wood) panels, a primary material for constructing high-rise wooden buildings.

The sector of building collective wooden buildings is developing in Europe, but it is just taking its first steps in Russia, where builders hope to obtain permits from the authorities in the coming months.

Despite acknowledging that it continues to be a niche market, the group exports to Germany, Austria, Italy and Japan, waiting to launch into the local market.

Meanwhile, the percentage of wood and derivatives in Russian exports has increased from 3% in 2019 to 3.7% in 2020.

“Biomaterials, including wood, have a great future. Consumer demand for organic and natural products is increasing ”, says Marina Zotova, analyst at the specialized agency WhatWood.

“The quality of the Russian wood is on the level of the Finnish and North American”, he adds, praising the “impressive beauty” of the texture of some Siberian trees.

“The Russian wood industry has very good prospects, especially in the foreign market. But in order to obtain a share of participation in exports comparable to hydrocarbons, large investments are necessary ”, emphasizes Andrei Frolov, vice president of the Union of Russian Loggers, something that could happen in a horizon of 10 to 15 years, according to him.

But the authorities project from 2022 to prohibit the export of “raw” trunks of certain trees. The objective is to abandon the export of raw materials and transform the material in Russian territory to obtain greater added value in the export.

Forest renovation

In the Vologda forests, the administrator, Ilia Moskaliov, ensures that all felled trees, up to 70 years old, will be replanted.

“Wood is a renewable material if the forest is well managed. It is cut down and then replanted again, it is an inexhaustible source ”, confirms the head of the plant, Konstantin Pastujov.

There has been progress since the 1990s, when large numbers of trees were illegally felled and exported.

Currently, according to Alexei Iaroshenko, head of the Greenpeace forestry department, only 3% of the wood is illegally logged.

However, he argues that the renewal of felled forests is not guaranteed: “In theory everything is restored, but not in reality,” he laments, stating that “traceability is lacking.

The NGO WWF asked the authorities to provide data on Russian forests to the public, in order to ensure greater transparency.