Policy Context & Proposal Overview. The Swedish government is considering a policy to compensate forest owners - approximately 400 SEK (~$42) per ton of CO2 - for delaying tree harvesting by 5 to 20 years beyond the legal minimum to enhance carbon sequestration and meet EU LULUCF obligations. The program is projected to cost up to 2.36 billion SEK (~$246 million) by 2030.

Industry Backlash & Economic Concerns. The proposal has sparked significant backlash from the timber and forest industries. The Swedish Forest Industries Federation warns that up to 7,200 jobs - particularly in smaller sawmills - may be at risk. The reduction in available raw material could further destabilize downstream sectors like paper, packaging, and construction.

As stated by Viveka Beckeman, Director General of the Federation: “Small-scale saw mills would also risk closing due to increased raw material costs.” Moreover, critics argue that limiting domestic wood supply could shift production overseas, undermining Sweden`s environmental goals by relying on less regulated markets.

Environmental and Market Rationale. Proponents of the initiative emphasize the climate and biodiversity benefits of temporarily reduced harvesting, viewing it as a means to reflect the true ecological value of forests. Supporters highlight broader benefits including recreation, habitat preservation, and climate mitigation.
Private markets are already responding: Estonian startup Arbonics, in partnership with Sweden`s Treebula, has begun offering forest owners access to carbon credit markets, reaching nearly 500 landowners - a sign of growing demand for voluntary carbon schemes.

For wood-industry professionals, the forthcoming Swedish budget (expected in September) will be pivotal - it may decide between state-backed support or leaving carbon sequestration to private markets.

For expert analysis on pricing trends, import/export flows, carbon policies, and the latest market forecasts, visit WoodBusinessPortal.com - your B2B hub for the evolving global wood and forestry sector.

Sources:
1. illuminem.com
2. agtechnavigator.com