The Annual General Meeting of the European Panel Federation was held, as ever, in a facinating place. The Portuguese city of Porto, situated where the River Duoro meets the Atlantic coast, is the spiritual home of the port wine industry, evidence of which was all around. The meeting, sponsored by Sonae Arauco together with Ipac, Evertree, Tricoya, Sasol, Technocell and WVCO, attracted some 160 participants from 23 countries. Its theme centred on and enlarged on the circular economy as presented in the Venice Declaration of the EPF, which was released at the 2016 AGM of the Federation.

Clive Pinnington, EPF’s managing director, presented an economic review of the wood based panels industry in 2016. The total production of European woodbased panels increased by 1.8%, reaching a total of 55.6 million m³. Particleboard production increased by 0.8% to 30.2 million m³. MDF also grew, as did OSB, the third largest panel type by volume, which rose strongly by 6.9% to 5.4 million m³. Second only to OSB in terms of growth rate was softboard, which increased by 4% to 4.6 million m³. Plywood production developed positively; the only panel type that did not increase in production during 2016 was hardboard, which dropped 5.6% to 0.5 million m³.

The open part of the meeting saw a full and imaginative programme of presentations.

EPF chairman Paolo Fantoni’s opening speech deplored the world-wide rise of protectionism. “It is my prerogative” he said, “to highlight how we, a group of industries and as a whole in this sector, have lost a great opportunity by not being able to engage our products via the TTIP (Transatlantic Trade and Investment Partnership) agreement in order to develop a more solid alliance with our American partners.

On the contrary, we are still suffering from the conspicuous increase of local initiatives fostering and reinforcing aspects of protectionism that may rapidly develop into barriers to free market trade. This is a practice that EPF radically deplores.”

In European Union countries, he said, environmental politics are widely spreading and have almost overcome industrial politics. He pointed out that recent statistical studies from the European Commission show that that EU policies and legislation have placed a disproportionate burden on the panel board industry. In the period from 2005 to 2014, wood-based panels incurred an additional 10.8% of costs (as a share of added value ) due to Community politics, while the wood industry in total recorded in the same period a 4.9% increase due to the same influencer.

“Moreover, the panel board industry has registered a reduction in production capability of 7 million cubic meters in the last ten years, almost equivalent to 10% of the overall European capability” he said. “Most of this results from relocation of production sites into countries with lower cost impact.”

He pointed out that in this scenario the European panel industry had the right to look suspiciously at forecasts of the renewable energies target. These are set at 20% for the 2020, 27% for 2030 and threatened now by a demand requesting 40%.

“In 2016 the amount of renewable energies produced in Europe was 16% of total demand,” he said. “Half of this came from wood, meaning that 8% of all energy in Europe came from biomass sources. The idea of persevering or even augmenting the consumption of wood for energy is no longer frightening only to manufacturers but is of grave concern to environmentalists as well.”

He reiterated the aims of the Venice Declaration. Key objectives are to equalise the pressure on wood availability between industrial use and use for energy production; to consolidate the idea of the efficiency of using wood as a resource; to stimulate targets concerning wood recycling; and to stimulate a greater demand for wood-based products in order to increase CO2 storage.

On the positive side he pointed out that the idea of eliminating inefficient wood combustion subsidies for the sole aim of producing electrical energy is now gaining wide support, and that the efficient manner of considering multiple lives for materials under the 'Cascade use' logic is finally getting recognized. The Circular Economy Package has set the aim of recycling all wood and thus eliminating all wood waste from landfill."

"In this context, our perception on the recent legislations concerning the Circular Economy Package is two-folded. We experienced a true satisfaction regarding quantitative results (an increase in the recycling levels was registered) but we are slightly less positive on the qualitative results acquired where we were hoping for greater braveness and initiative. "We would have desired documents to go more deeply in detail, especially on the 'Cascade use of wood' definition, privileging the 'Best Practice' introduction through which the National politics are addressed.

“The wood industry is therefore consolidating its image of Best Performer within the Circular Economy,” he said. “This must be due to the fact that our technological capabilities are able to separate, clean and recycle wood, not merely because wood is an easy-to-burn material.

“A melamine panel board must be able to be reprocessed and become once more a melamine panel board to create multiple lives of wood. In this way, we will be able to change the perception of wood from being a scarce resource to let it become a widely available material for the entire civil society.”

Others spoke on the same theme. Kestutis Sadaukas, director for Circular Economy and Green Growth at the European Commission, in a recorded address confirmed a recommendation of the EC to no longer allow support to electricity only biomass plants.

This was intended to address the existing tensions on the biomass market between energy and material use, and to require efficient use of the valuable natural raw material that is wood. This was well received by EPF members, who have long called for a fair playing field, free from market distortions and driven by material and energy efficiency.

A perhaps unexpected speaker, but also well received, was Sini Eräjää of the environmental NGO Birdlife Europe. She pointed out the urgent need for the Circular Economy and the Renewable Energy Directive to complement one another. She saw them potentially on a collision course, the one calling for a ‘material first’ approach to wood – that is, using it as timber – the other seeming to drive ever more incineration for energy, seeing it only as fuel. Sini Eräjää documented several case studies, such as energy giant Uniper’s conversion of a coalpowered power plant in France to burn wood pellets.

Only half of the wood required can be sourced locally; the plant receives 70 million euros in government subsidies per year. Similar cases are documented in Birdlife’s short booklet ‘The Black Book of Bioenergy – Good intentions gone bad.’ Rui Correia, CEO of host company Sonae Arauco highlighted the carbon storage effects of wood, pointing out how recycling (as already practiced as standard by his company), and greater amounts of wood products in furniture and construction could make a significant contribution to the struggle against climate change.

This was supported by Professor João Ferreira do Amaral, Chairman of AIFF, the Portuguese Competitiveness and Technology Centre for Forest Industries. Portugal had suffered only weeks before from disastrous forest fires.

A major factor holding back the country’s wood based industries is that private owners control 98% of Portugal’s forests, most of them as tiny lots; he called on them to work together in groups to ensure efficient and economic clearing of forests.

Portugal's biomass pellet production has risen to unsustainable levels said Teresa Presas of Steps International. She illustrated the fallacy of Portugal producing 15 times more pellets per forest hectare than the combined average of Europe and Russia. In questioning this she drew on the EC’s own report on Cascades which concluded that a material scenario for European wood (as opposed to an energy-based one) could deliver not just environmental advantages, but also economic and employment benefits too. Such a scenario could create 1 million new jobs by 2030, and is therefore not to be dismissed lightly.

The EPF made clear its views, and its intention to promulgate them, with a short cartoon video it has produced. Entitled ‘The Wood-Based Panel Industry, Circular by Design’, it was shown as a sneak preview to the audience, welcomed by great applause. It is hoped to have it available shortly on-line. In that event WBPI will bring you news of it, as we will of other EPF initiatives.

The AGM closed with a highly popular cruise on the river Duoro, which included an also-popular tasting of port wines