Brexit: Forestry after Brexit

Forestry after Brexit

Brexit has been a hugely unsettling issue for many sectors, not least farming.  Forestry however is one of those sectors which stands to potentially weather Brexit and remain an important and viable land use.  Much of the detail is not yet known but there are several areas where some high-level comment can be made.  If you are a timber grower, or looking to plant trees, this article is for you.

Existing FGS contracts

All existing FGS contracts with grant payments extending beyond 2020 will be honoured.  Grants being applied for this year and approved by Christmas 2020, including those with payments beginning in 2021, will be honoured.

Forestry Grants

The Forestry Grant Scheme (FGS) forms part of the Scottish Rural Development Programme (SRDP) and sees 50% of its funds come from the EU, with the total grant package currently forming £47m in 2020.  The Scottish Government have committed to two initiatives: stability and simplicity.  These initiatives will deliver on three key areas:

• FGS will remain open after Brexit, largely in its current format, until March 2024 (minor changes may be made but unlikely to include changes to rates of planting grant)
• Stream-lining and simplification of the application process
• Encouragement of small-scale land owners to take up opportunities in forestry.

The Scottish Government has set sustained and ambitious targets for levels of new woodland creation, which has full cross-party support.  The key drivers behind these targets include the government’s commitments to mitigate climate change, and to reducing the forth-coming slump in domestic timber and wood fibre supply.  Given this level of commitment and the importance of its drivers, it is very unlikely that the Scottish Government will perform a U-turn on its assurances to the FGS.

Carbon

There is a market for the sale of carbon sequestered by trees, regulated by the Woodland Carbon Code which was devised and implemented by the then Forestry Commission.  The sale of carbon is not dependant on receiving FGS funding but does in some instances provide enough funding to tip a woodland creation proposal from unviable to viable.  A recent development in England is the Carbon Guarantee Scheme (an alternative to selling carbon on the open market, and to help stimulate woodland creation) whereby the government offers a guaranteed price for sequestered carbon every 5 or 10 years, until 2055/56.  The Scottish Government is now considering a similar scheme which may make woodland creation more attractive.

Timber Sales

It is anticipated that the value of the pound could rally in the event of a clean Brexit or weaken if a chaotic or no-deal Brexit occurs.  Why does this matter?  The UK is the second largest importer of timber in the world (China being the largest), with 80% of its requirements brought into the country.  A weaker pound means that imported products will cost more, so sawmills will seek more timber from domestic timber growers.  This increased demand will see prices paid for home-grown timber rise, good news for those with woods to fell or thin.  Given that Europe is currently being ravaged by the Covid-19 pandemic, a chaotic or no-deal Brexit, and therefore weaker pound, appears more likely.

Plant Health

Currently UK ports are badly under-staffed so inspection of imported forest-related material is limited.  Even so, 28% of firewood imported in 2017 did not meet UK regulations.  Brexit provides an opportunity to re-write the rule book for imports of wood and forest products.

The greatest risks to plant health in terms of imports relates to untreated timber (including pallets and firewood), and plants in pots (mainly for landscaping industry).  Untreated wood products either have bark left on or are not properly dried, allowing insects and fungi native to other parts of the world to establish in the UK; similarly, with imported potted plants.  The UK forestry industry is pushing for firewood imports to be stopped, which could also allow the domestic firewood market to flourish.  Much of the imported firewood is ash, yet in the UK there is decades-worth of dead and dying ash that can be used for firewood.

Reputable forest nurseries grow all their cell-grown and bare-root stock in the UK from seed, a situation that is most likely to remain; importing of transplants ceased following the Chalara ash dieback outbreak in 2012.