How climate risk in the timber industry is becoming a driver of growth
What does a sawmill process once the spruce stops growing back? Climate change is reshuffling the forests of the German-speaking region while demand for regional timber keeps rising. That tension is a risk for anyone holding on to the status quo, and a growth lever for anyone who aligns product range and business model early with the forest of tomorrow.
The spruce is in decline
The spruce is the mainstay of the forests in the DACH region; economically, it is the most important species and has long been the most common. Yet it is in decline. In the lowlands, its population has already shrunk noticeably. Researchers at the Swiss Federal Institute for Forest, Snow and Landscape Research (WSL) predict that spruce, beech and fir will have largely disappeared from the Swiss Mittelland by 2050. They are likely to be replaced by oak, sweet chestnut and Douglas fir. The forest is undergoing a reshuffle, driven by drought and heat.
For a company that has been processing regional round timber for decades, this is more than just a minor ecological footnote. Production, product range and end products are geared towards a few key tree species. If their availability declines, cost calculations and planning are thrown into disarray.
Limited supply, growing demand
Added to the dwindling supply is a second trend, pointing in the opposite direction. Climate-friendly construction and a growing bioeconomy are driving demand for regional, renewable materials. Timber construction is booming, particularly in multi-storey residential building and in renovation projects.
A falling supply of the usual types of timber is therefore meeting rising demand. The result: more volatile prices and a less secure supply, as well as production coming under pressure. Anyone who focuses solely on the cost side here is defending margins that are unlikely to be sustainable in the medium term.
Thinking differently about raw materials
It becomes more interesting when you turn the question on its head. What products can be manufactured from a scarcer but more in-demand raw material that are worth more than what currently leaves the production line? And which business models ensure security of supply, rather than leaving it to the market?
Two main approaches are at the heart of this.
- Firstly, higher-value utilisation to extract more added value from less raw material, through products that prioritise function and quality.
- Secondly, circular and cascade utilisation, which guide the same raw material through the value chain multiple times before it is used for energy.
Both require an understanding of the ecological and economic drivers. In our research into the timber value chain in the DACH region, this was precisely the starting point: knowing which species regrow, how quickly and to what standard, before aligning production and product ranges accordingly.
When carbon becomes a product
A third opportunity lies in the material itself. Wood stores carbon – according to a widely accepted rule of thumb, around one metric tonne of CO₂ per cubic metre. What was long considered merely an abstract environmental argument is now increasingly becoming a tradable commodity: in the DACH region, the first methodologies and certificates are emerging that certify the carbon sequestered in timber construction and make it tradable as a carbon removal credit. For timber construction companies, this could generate an additional source of revenue.
However, this is by no means a sure-fire success. Such certificates are controversial because the storage is not permanent, the crediting is difficult to verify, and, after deducting the energy required for harvesting, drying and transport, less remains than the rule of thumb suggests. Turning carbon into a product is therefore one option among many, rather than a ready-made solution.
Around 1 tonne of CO₂. That is roughly the amount of carbon sequestered by one cubic metre of timber used in construction, stored over the building’s entire lifespan.
Beyond the timber industry
The timber industry is a highly visible and comparatively easy-to-understand example of a phenomenon that is currently in its early stages of development across many sectors of the economy. Wherever value creation is based on natural raw materials – from construction and food production to speciality chemicals – availability and quality are shifting in line with changing environmental conditions. Those who measure their current processes against tomorrow’s forecasts will secure economic success and stable cash flows, even as traditional procurement markets become more volatile.
How we provide support
We analyse how the raw materials landscape in a particular sector might evolve in the coming years, what implications this will have for production and the value chain, and where new markets might emerge. Based on this, we work with you to develop a portfolio and a value proposition tailored to the changed circumstances. Our starting point is the combination of scientific understanding and strategic business thinking.
If you would like to know how resilient your business model is in the face of a shifting raw materials landscape, please get in touch with us.
Frequently Asked Questions
According to forecasts by the WSL, oak, sweet chestnut and Douglas fir will replace a large proportion of the spruce stands in the lowlands of Switzerland. These species are better able to cope with drought and rising temperatures. For the timber industry, this means different trunk geometries, different wood properties and, in some cases, different processing requirements compared with the coniferous timber that has dominated until now.
Climate-friendly construction and a growing bioeconomy are driving demand for regional, renewable materials. Timber construction is growing, particularly in multi-storey residential building and in renovation projects. A falling supply of the usual timber species is therefore meeting rising demand. Prices are becoming more volatile and supply more uncertain.
Cascade utilisation means keeping the same raw material in high-quality products for as long as possible before it is used for energy. A raw material goes through several stages of use before it is used for energy. For example, the trunk is turned into timber, the offcuts are made into boards, and later into chipboard or fibreboard. Incineration comes only at the very end; nowadays, this remains the primary use, particularly for hardwood. This extends or increases the value added and becomes increasingly important as the available supply dwindles. At its core, it is a circular economy for wood as a raw material.
Firstly, we need a clear picture of regional forest development over the next 20 to 30 years: which species will regenerate, to what standard, and over what timeframe? Building on this, the product range and production processes can be adapted step by step. Anyone who waits until the shortage of raw materials becomes acute will no longer have any scope for strategic decision-making.
Sources
- waldwissen.net: Schweizer Wald im Klimawandel. https://www.waldwissen.net/de/lebensraum-wald/klima-und-umwelt/klimawandel-und-co2/schweizer-wald-im-klimawandel
- SRF / WSL: Klimawandel im Schweizer Wald. https://www.srf.ch/wissen/klimawandel/klimawandel-im-schweizer-wald-manchen-baeumen-setzt-der-klimawandel-schneller-zu
- Lignum: Facts and Figures zu Wald und Holz in der Schweiz. https://www.lignum.ch/medien/facts-and-figures/
- proHolz: Holz verwenden ist aktiver Klimaschutz (1 m³ Holz bindet rund 1 t CO₂). https://www.proholz.at/wald-holz-klima/holz-verwenden-ist-aktiver-klimaschutz
- UmweltDialog (2024): CO2-Zertifikate, Holzbau als Schlüssel zur Dekarbonisierung des Gebäudesektors. https://www.umweltdialog.de/de/WIRTSCHAFT/produktion/2024/CO2-Zertifikate-Holzbau-als-Schluessel-zur-Dekarbonisierung-des-Gebaeudesektors.php
- Hasenöhrl, Johannes: Wertschöpfungskette Holz im DACH-Raum, inkl. Potenziale von Integration von Carbon-Removal-Zertifikaten im Holzbau (intern).
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