Monday 22 April 2019

We can build a solid economic future on wood

While many sectors still struggle to claw their way out of the recession, forestry, it has to be said, finds itself in rather robust good health. In the summer of 2010, when the country was perhaps at its lowest ebb, timber prices were at an historic all-time high.

While they have since fallen, prices for all categories of timber remain strong. Our construction industry may still be in the doldrums but we operate in a global marketplace and world demand for timber shows no sign of abating.

Furthermore, until very recently, thinning almost invariably cost money and we counted ourselves fortunate if we could make the operation break even.

Now, with the growth in domestic demand for renewable energy, and wood as a source of fuel, first thinnings are now almost universally profitable.

Prices of €4-€7/t standing for pulpwood, destined for wood chip or fire wood, are commonplace.

It is estimated 40pc of the world's population will need to be rehoused over the next 20 years. Upwards of 3bn people will need new homes and the only material capable of meeting this phenomenal level of demand without causing catastrophic consequences for the world's climate is sustainably produced timber.

I remember having a discussion 20 years ago with a civil engineering contractor who was less than enthusiastic about the potential of forestry as an investment.

His argument was that technological advances with other construction materials, and in particular aluminium alloys, would render timber almost obsolete as a construction material in the years to come.

While he did have some interest in quality hardwoods for joinery purposes, he predicted a bleak future for commercial softwood production.

The reverse has been the case. Developments in timber technology over this period have outstripped the alternatives and new engineered timber products such as glulam, cross laminated timber (CLT) and mass timber panels are replacing not only traditional 4x2s and 8x4s but also steel and concrete in ways that were hitherto unimaginable.

The Canadian architect Michael Green is one of the pioneers of new design and construction techniques that utilise timber as the core structural element of large scale buildings. He maintains that the 30-storey timber skyscraper will soon be a reality.

When it was completed in 1889 the Eiffel Tower changed our perception of what is possible, and directly influenced the skylines of many of the world's cities. Michael Green argues that what we need now is another "Eiffel Tower moment".

The engineering problems involved in building wooden skyscrapers have largely been overcome, but the remaining challenge is perhaps the greater one: changing society's perception of what is actually possible when it comes to building with wood.

The Bridport House development in the London Borough of Hackney is a new residential tower block replacing a 1950s structure that was recently demolished.

The building comprises two adjoining blocks, one eight storeys high and the other five storeys. The entire project is constructed of spruce CLT, making it one of the tallest wooden structures in the world.


Had this building been constructed using a conventional reinforced concrete frame, the materials required would have incurred an additional 890t of carbon. This is equivalent to 12 years of operational energy required to heat and light all the dwellings at Bridport House.

When the sequestered carbon locked up in the timber structure is added to the carbon avoided, the total rises to 2,100t of carbon. This is equivalent to 29 years of operational energy.

Yet another positive indicator for forestry comes from the British-based Investment Property Databank (IPD).

It issued a report showing that investment in British forestry assets had hit new highs, with three-year returns rising to 23.9pc in 2012.

This equates to a minimum outperformance of 14pc when measured against bonds, equities, and commercial property which showed yields in the same period of 9.9pc, 6.7pc and 8.7pc respectively.

While we don't have an investment return index for Ireland, we do have a number of similar conditions, and a shared marketplace, so it is not unrealistic to suggest the investment outlook for Irish forestry is a positive one.

We can also add to this the COFORD forecast that domestic demand for timber over the next eight years will significantly exceed supply, while in Britain it is predicted that demand will be double that of domestic production as soon as 2015.

William Merivale is national secretary of PEFC and a Cork forestry consultant. Email:

Irish Independent

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