Austria’s sawmill industry has managed to stabilise sales and production despite challenging economic conditions. Markus Schmölzer, chairman of the Association of the Austrian Wood Industries, said costs for energy, raw materials and labour remain high, while overall economic uncertainty continues to weigh on confidence.

The timber trade has also seen mixed developments. Franz Teuschler, chairman of the Austrian Timber Trade Association, added that falling interest rates have provided some support for larger construction projects, although demand for single-family housing remains weak. Exports, however, have strengthened, with softwood lumber shipments rising by almost 11% in the first half of the year compared with 2024, driven largely by demand from Italy and Germany.

Industry forecasts point to a 2% increase in Austrian lumber production in 2025. But the EU Deforestation Regulation (EUDR), due to take effect at the end of the year, is seen as a significant threat. The sector warns that production could decline by up to 10% if forest owners reduce harvesting to avoid the risks and costs associated with compliance. A downturn of this scale would also affect the wider wood value chain, including furniture, panels, paper and pellets.

The EUDR requires companies to demonstrate that all wood and wood products are deforestation-free throughout the supply chain, covering both imports and intra-EU trade. Schmölzer said the requirements are impractical, as mixed storage and processing would generate thousands of reference numbers for every stage of production, creating data volumes that would be difficult to manage and of limited value.

A Finnish study has estimated implementation costs at more than €200m, with ongoing annual costs of €65m. Extrapolated across Europe, the total could run into billions. Industry groups argue the regulation in its current form is disproportionate, legally unworkable and lacking clarity, with the EU Commission yet to set out a viable implementation model after more than two years of discussion.

While supporting the global objective of halting deforestation, industry leaders are calling for alternative solutions. One option, said Teuschler, is to introduce an additional risk category for countries with no deforestation risk, such as Austria, rather than applying blanket requirements across the sector. Documentation similar to that under the existing EU Timber Regulation (EUTR) is seen as a more practical approach.

Several EU member states, including Austria, as well as the German coalition government and the EU Parliament, have already expressed support for risk-based controls as a more targeted way of tackling deforestation.

Source: panelsfurnitureasia.com