Harvesting, prices, prospects: SFE “Forests of Ukraine” responds to questions from participants of regional business meetings

Last week, another meeting with market participants took place in Lviv, initiated by a group of Members of Parliament. The discussions focused on familiar issues: prospects for increasing harvesting volumes, transparency in the timber sales system, and the efficiency of the forest management model.

Some participants of the meeting, consciously or not, continue to ignore obvious facts, repeatedly voicing claims that have no basis in reality.

Below are several comments based on the outcomes of the meeting:

1.The forest reform is legal and successful — that’s a fact!

The forest reform is based on a Presidential Decree, a decision of the National Security and Defense Council, and a Cabinet of Ministers resolution, all of which provided for the centralization of forest enterprise management and the creation of a unified specialized state forestry company (with a future perspective of transformation into a joint-stock company fully owned by the state).

The corporatization process of SFE “Forests of Ukraine” is also stipulated by law.

Thanks to the reform and a transparent, competitive timber sales system, the previously subsidized forest sector has become a net contributor to the state budget. This year, “Forests of Ukraine” increased payments by 70%, reaching a record UAH 10.7 billion.

The reform also made it possible to revive forestry in southern Ukraine, supply free timber to the Armed Forces of Ukraine, and implement investment projects using internal resources — including a network of recreational areas, modern seed centers, new firefighting equipment, and the construction of forest roads.

2.Foresters were the first to propose solutions for increasing harvesting

In 2023–2024, SFE “Forests of Ukraine” repeatedly faced a lack of demand — at major auctions, only about 50% of the offered timber was sold, despite low prices.

Nevertheless, the enterprise consistently drew attention to factors that artificially limit harvesting and create risks for the industry’s development.

In particular, foresters have repeatedly submitted proposals to amend the Law on Environmental Impact Assessment (EIA). Certain provisions (implemented only in Ukraine) result in the loss of millions of cubic meters of timber annually. Unfortunately, these proposals have not been considered.

Next year, SFE “Forests of Ukraine” plans to increase harvesting to 11.7 million m³.

Currently, forest inventory materials are being approved, which will facilitate the use of the calculated annual allowable cut.

The process of re-inventorying is underway in Volyn, Lviv, Ternopil, Poltava, Cherkasy, and Chernihiv regions. In Zhytomyr, Rivne, Sumy, and Khmelnytskyi regions, forest management data are being updated.

3.Ukrainian foresters are gradually adopting European practices

SFE “Forests of Ukraine” is implementing European forest management practices.

Unfortunately, Ukraine inherited a Soviet-style model based on clear-cut harvesting once stands reached a certain age. In contrast, European countries focus on annual growth indicators and use close-to-nature forestry, which increases the wood stock growth per hectare per year from 4 to 10–12 m³.

Ukrainian scientists have been researching the introduction of close-to-nature forestry since 2008. Back in 2018, foresters initiated changes to felling regulations, though they were only approved last year. Modern methods have yet to be applied, as the regulatory framework allows this only after updating forest management plans — a process that can take decades.

However, it is important to note that not all Ukrainian forests are comparable in productivity to those of Poland or Germany. The southern and eastern regions are non-resource areas, serving primarily ecological functions. About 1.1 million hectares of forests managed by SFE “Forests of Ukraine” belong to the Nature Reserve Fund, resulting in a 1.5 million m³ reduction in annual harvesting.

A significant part of forest areas in resource-rich regions remains inaccessible due to hostilities. In the Sumy region, this applies to one-third of forestry enterprises; in the Kharkiv region, to more than half. In total, 300,000 hectares under SFE “Forests of Ukraine” management are mined.