The Heated Politics Of The Timber Industry — And The Man Who Is Its Future

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John D. Rockefeller became the richest person in history by revolutionizing the oil and gas industry. One hundred and fifty years later, Elon Musk is in the running for that same title by eliminating demand for Rockefeller’s chief product.

new forestry strategy, international conglomerate, Kronospan Foundation, afforestation initiative, community action programs, European Forest Institute

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As the world is heating up, the fastest-growing fortunes in the world are now green thanks to a new generation of tycoons amassing wealth in sectors that work towards slowing global climate change. Timber has quietly joined the fray, offering both a clean solution to the net zero carbon challenges we face and complex contestation between private and public interests.

Topping the list of the timber industry with dizzying levels of revenue is Kronospan, run by Austrian businessman Peter Kaindl. Kronospan is the world’s largest manufacturer of wood-based panels, bringing in between 4-5 billion Euros of revenue per year. You will not have heard of his name, but Kaindl runs an empire of trees that will power Europe’s green revolution.

Now more than ever Europe will need industrial leaders in the timber sector to stabilise the bloc as wood becomes an ever more important resource after the passing of Europe’s Green Deal, demanding hundreds of billions of euros in annual investment. Timber’s rise also follows the EU Commission’s new forestry strategy to plant an additional 3 billion trees in the next decade as carbon-intensive concrete is phased out from use in construction.  

The strategy drafted in Brussels is expected to be a big asset for the environment, as well as the emerging climate-data industry powered by the EU’s Copernicus Climate Change Service satellite fleet. However, timber merchants wary of stronger restriction have rallied to fight the proposal. Some believe the Commission is tone deaf to forest owners and investors, or that the surveillance measures proposed could yield misleading information.

Kaindl has remained neutral, but if he speaks, the industry will listen. Alongside his father, Peter established the Kronospan Group in 1987, growing the company into an international conglomerate that operates in 30 countries. Chances are, if you live in Europe, North America, or Asia, you will have Kronospan’s wood products in your own home.

But his largest impact remains in the EU, where a near entirety of the continent’s wood product supply chains run through one of Kronospan’s manufacturing sites across Latvia, Poland, Czech Republic, Slovakia, Bulgaria, Romania, Serbia, Croatia and Hungary, or his private investment in harbours and ports and paper and plastics multinational, Surteco Group SE.

Kronospan also serves as an industrial link between the bloc and the Commonwealth of Independent States (CIS), having invested 200 million USD last year in Belarus in expansion plans, having been praised by President Lukashenko for bringing in new jobs to the country, now sanctioned by the UK, US, and the EU.  

Getting private industry to buy into new ways of doing business on a warmer planet will require more focus on environmental and social governance (ESG) responsibilities. The Kronospan Foundation has been one of the first in the EU to set new ESG standards the wood products industry will have to meet to adapt with the times. Under Kaindl’s governance, the Foundation has enacted an afforestation initiative to plant 1 million trees across Europe, as well as support the localities it operates in through community action programs and reforestation efforts within its own 11,000 hectares of managed spruce forest in Scotland.

Sustainable forestry practices will become an ever-greater need to secure climate change goals. Tension has been building within the industry since the Commission’s Joint Research Centre (JRC) published a July 2020 report that found an abrupt increase in harvested forest from 2015 to 2018. They warned the growing demand for timber products as a construction material has potential to derail Europe’s climate goals by eradicating important carbon sink for the continent. The European Forest Institute, the overseer of an EU facility dedicated to reducing emissions from deforestation, has argued the opposite way.

This week, Europe’s biggest timber nations, including Kaindl’s own Austria, arrived in Vienna to reject the new forest strategy on the basis that it would give more control to the private industry, revealing the magnitude of influence wood manufacturers such as Kronospan hold. Ministers from Germany, France, Finland, Slovakia, and Sweden have argued that the plan risks undercutting employment and resource deprivation. Clearly, a multi-stakeholder approach will be needed, incorporating independent, national, and regional forest polices. Peter Kaindl may just be the man to plant the first seed of Europe’s forests of the future by setting an example of good governance.

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