Introduction

The International Tropical Timber Council's Trade Advisory Group (TAG) has welcomed the European Commission's recent decision to delay the application date for the European Union Regulation on Deforestation-Free Products (EUDR) by an additional year, now set for December 30, 2025. While this extension offers some breathing room for the timber industry, it also raises concerns about uncertainties that could complicate compliance efforts.

EUDR Delays and Industry Concerns

TAG's co-chair, Barney Chan, expressed cautious optimism about the delay, indicating it grants the timber sector extra time to prepare for the regulation's stringent requirements. However, Chan also highlighted critical worries regarding potential last-minute amendments that may upset the already fragile balance in the market. The EUDR's implementation is poised to have far-reaching implications for global forestry policies and trade, and TAG has urged the Commission to engage with both consumers and producers to facilitate a smoother transition.

Global Timber Trade Challenges

In addition to EUDR uncertainties, the timber market is experiencing instability driven by external factors. The World Bank's recent Global Economic Prospects report points to a slowdown in global trading activity, marking one of the weakest performances in half a century. Timber product manufacturers are grappling with alarmingly high shipping costs and erratic service schedules, significantly affecting exporters from critical markets including Vietnam, China, Indonesia, Brazil, and Malaysia.

Shipping costs have surged dramatically in the post-COVID era, with freight charges from Southeast Asia to the US and EU skyrocketing from around $2,000 per container to figures hovering between $8,000 and $10,000, driven by geopolitical conflicts and market disruptions. Such inflated shipping prices are predicted to suppress trade volume and escalate costs for consumers, at a time when price sensitivity poses a growing challenge in the timber sector.

Initiatives for Sustainable Timber Trade

Amid these challenges, the International Tropical Timber Organisation (ITTO) is working to bolster the timber industry's resilience. The establishment of the Global Legal and Sustainable Timber Forum (GLSTF) in 2023 marks a significant step forward, aimed at fostering international collaboration and promoting sustainable timber supply chains. The GLSTF launched its Action Framework in September 2024 to strengthen stakeholder engagement and support the sustainable development objectives of the timber industry.

Sheam Satkuru, ITTO's executive director, emphasized that the GLSTF serves as a collaborative hub for timber industry stakeholders focused on enhancing sustainable forest management practices, legal use, and responsible trade in timber products. During discussions at the Forum, it became evident that traditional timber buyers are often unaware of the advancements made by tropical timber producers toward sustainable practices.

Addressing Market Perceptions

In the wake of these revelations, TAG has stressed the urgent need for a robust communication strategy to inform the market about the progress made in traceability, legality, and sustainability since the Rio Earth Summit in 1992. Chan proposed forming a dedicated working group tasked with devising an effective narrative to counter negative market perceptions. This initiative would entail allocating resources for a focused approach to rebuild demand for tropical timber globally.

Conclusion

As the timber industry navigates the complexities of regulatory compliance, logistical hurdles, and shifting market demands, there is a critical need for unified action. The collaboration between ITTO and the GLSTF could play a vital role in reinforcing the message that wood is a sustainable resource, essential for environmental preservation and economic growth. With concerted efforts, stakeholders can work together to ensure a resilient future for the tropical timber trade.