Illegal logging

TRADE OF ILLEGAL TIMBER The Russian forestry sector is highly dependent on exports. In 2014, US$ 11.6 billion worth of Russian wood and wood products were exported, 42 comprising 72 per cent of the total value of revenues

fromRussian exports. 43 In 2011, 68 per cent of sawn wood products were exported to world markets. Cellulose exports comprised 85 per cent of the total amount produced (up 15 per cent from 2007). Expensive woods, such as oak, ash, elm and linden, are commonly used for furniture and flooring. As illustrated in Figure 6, the value of Russian timber increases dramatically from the time it is cut to when it is sold to the final consumer. When harvested timber is smuggled the share of revenues to local communities and the Russian budget can be as low as zero. When this is the case, none of the profits from criminal businesses are reinvested in improving the management of old-growth forest ecosystems in Russia. China and Finland are the main importers of Russian roundwood (Figure7). In2012, Russiaexportedmore than30millionm³oftimber to China; according to EIA experts, approximately 24millionm³ of thiswas exported illegally. Russian timber comprises approximately 20 per cent of timber imports to China, including 21 per cent of Chinese imports of roundwood – inferior only to New Zealand (Figure 9). In 2012, China exported timber, ready-made furniture and flooring worth US$ 20 billion: 33 per cent of which went to the United States, 17 per cent to the EU, and 7 per cent to Japan.

2,994***

USD per m ³

x 14

x 43 / 3

x 67 / 1.6 x 200 / 3

1,031

640

211

15*

Paid to loggers

At Russian export**

On border markets in China

At Chinese export

In U.S. Showrooms

x 43 / 3 increase from the initial and previous price * Less than 1% of the final sale price.

** Illegal logging reduces the customs duties and total revenue of the Russian forest industry. Starting at this point, Russia is not generating income from its forests. *** The cost of flooring sold in US retail chains.

Graph by Manana Kurtubadze, GRID-Arendal, 2015. Source: EIA, 2013

Figure 6: The value of oak along the supply chain

750

15,243

104 LATVIA

JAPAN

FINLAND

CHINA 34,962

2,185

SWEDEN

2,248

RUSSIA

89 POLAND

SOUTH KOREA

279

20,914 Total export: 57,690

608

GERMANY

931 UZBEKISTAN

KAZAKHSTAN

291 OTHER COUNTRIES

19,045

17,731

2012 2013 2014

Source: Russian customs data.

Graph by Manana Kurtubadze, GRID-Arendal, 2015.

Figure 7: Roundwood exports from Russia between 2012 and 2014

14