London, 10 May 2011

Wood is set to join oil, gas and metals as a crucial global commodity product as emerging sectors push demand to an all time high, a leading forestry consultant warned at an industry seminar on Friday, 6 May 2011.

A group of forest industry investors, including the chief executives of Stora Enso and Drax Power, met in London to discuss ways to sustainably address rising demand for wood, as this demand is expected to outstrip supply in EU27 by 30 per cent in 2020.

Many in the energy sector believe wood, as biomass, will help replace fossil fuels in the production of electricity, heat and fuels. And, according to Pöyry Management Consulting, this new demand for wood for energy generation is set to radically transform the forestry industry.

Pöyry Group’s Chief Executive Heikki Malinen prepared industry investors for change at the meeting. UK forests produce around 10 to 12 million tonnes of sustainable annual biomass but if all the planned projects go ahead the UK will need 50 million tonnes of biomass per year, far outstripping the available supply.

Cormac O’Carroll, President of Pöyry Management Consulting in London, says: “The meeting discussed how companies can look globally for the best sources of sustainable biomass, identifying areas where there is a surplus, or where climatic conditions favour rapid growth e.g. the south east of the USA or South America.”

The meeting, at London’s Stationers’ Hall, also discussed how the traditional and emerging wood using industries can work together to maximise the value we get from our limited resources. Pöyry identifies a number of interesting investment opportunities arising from technology developments in wood processing, new harvesting techniques and biotechnology.

Cormac continues: “The scarcity of supply is making wood a valuable resource and we’re already starting to see it being traded like more established commodities. Several commodity price indices have developed for wood pellets over the last years and the industry is in detailed talks about developing derivative trading platforms for wood pellets and woodchips. I predict wood will become a global commodity within the coming few years.”

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