Meeting with deputy prime ministers on current issues.
Opening remarks by Mikhail Mishustin
Excerpts from the transcript:
Meeting with deputy prime ministers on current issues
Mikhail Mishustin: The Government is working on a new version of the Strategy for the Development of the Timber Industry for the next nine years under the President’s tasks and instructions. During this year, we must build a pilot system for distributing powers in forest oversight among various government agencies at all levels is a weighted and well-balanced manner. It is necessary to encourage businesses to build capacities for deep processing of timber. The Government has made provisions to enable small and medium-sized businesses to take out subsidised loans for upgrading their production facilities.
It is important to enable businesses to start upgrading their main assets and creating capacities for heavy timber processing this year. Instead of exporting raw materials and low processed products Russia must supply other countries with furniture, plywood, cardboard and other products with high added value. It is important for businesses to be interested in investing, among other things, in wood housing construction or production of alternative bio fuels.
Ms Abramchenko, please report the new version of this strategy.
Viktoria Abramchenko: Mr Mishustin, colleagues,
The Government has drafted an updated Strategy for the Development of the Timber Industry until 2030. This is part of the large systematic work that we are carrying out in pursuance of the presidential instructions on decriminalising and expanding the wood sector.
For the first time ever, the strategy includes two components: economic, which is associated with lumber processing, and environmental, which focuses on the reproduction of forest resources. We have managed to balance the forestry sector and the lumber industry’s interests. Our goal is to build a cost-effective industry. I will go over the document’s main points.
First, this includes increasing the industry’s transparency through digitalisation and introducing industry-specific information systems. We use the single state information system to follow lumber movement through e-paperwork from harvesting at a logging site to storage and processing, or exporting outside Russia.
If an inconsistency is detected in information about harvesting or other operations, the transaction involving lumber will become impossible. In the first stage, we upgraded the current LesEGAIS information system (Single State Automated Information System on Forestry). Since 1 January, a pilot programme has been underway to introduce a wood products traceability system. Major market participants are now part of the programme.
In the second stage, we plan to create a single electronic forest register to combine information about the quality and quantity of forests and forested areas. Thus, the industry’s digitalisation will help put the information about the use of forests and forest resources in proper order, ensure transparency of trade in lumber and will effectively counter the grey market in lumber processing.
Second, this includes implementing federal forestry supervision to prevent forest-related violations. We plan to grant the Federal Agency for Forestry (Rosleskhoz) the supervisory function over forests. Chief federal state forest inspectors will start working in the regions. We will improve the forest guards’ material and technical equipment. They will have access to drones, remote sensing of the Earth, and photo and video recording, to analyse information about forest use by accessing data from various state information systems. This will significantly reduce the damage caused by illegal logging and other forest-related violations, which runs into the tens of billions of roubles a year.
Third, this strategy reinforces our transition to an intensive forestry model. This means we will improve the economy of lumber harvesting not by using more forest lands to fell trees, but through efficiently organising selective cutting and forest maintenance. By switching to cutting-edge technology for forest car, we can harvest twice as much lumber per unit area while simultaneously achieving the outlined parameters of forest reproduction.
Fourth, the strategy is aimed at changing timber planning and forest tenure. Plans are underway to transfer forest tenure functions on forest foundation lands to the federal level, intensify forest management and establish requirements for operators and specify responsibilities for this processing work. In this way, we will be able to provide foresting oversight for the entire territory of economically established forestlands in Russia. This is about 300 million hectares. This will allow us to effectively control the forests, increase profits from the use of forest resources and plan forestry resource measures.
Fifth, one of the main areas of the new strategy is the revision of approaches to restoring forests. We have already amassed over 35 million hectares of land without forest recovery and get 450,000 hectares behind the plan every year. We must reverse this situation. Therefore, the strategy provides for enhancing the role of regional public forestry institutions that can become professional operators of forest management work, including compensatory reforestation. This will allow us to restore as much as 100 percent of felled or dead forest plantations as early as 2024.
Sixth, we must ensure effective control over timber harvesting and fair access to raw materials. Timber companies are already complaining about the inability to receive forestlands for developing investment projects. This problem gets worse if there is an interregional investment project. Therefore, we envisage the step-by-step centralisation of authority on granting forestland, partly for priority investment projects. In addition, we will revise the rules for granting this forestland and will simultaneously review whether the previously concluded lease contracts comply with the requirements of forest regulations. We plan to cancel contracts with violators and sign new wood procurement contracts with companies that have wood processing capacity.
Seven is about new incentives to expand infrastructure. When implementing major investment projects, we provide support measures to build infrastructure, such as forest roads. This will increase the availability of forestlands, including for the purpose of fighting wildfires in remote areas.
Eight is about stimulating the domestic demand for lumber. With the reorientation of the industry towards creating products with high added value rather than exporting roundwood, we must lay down measures to stimulate the demand for lumber. Expanding wooden housing construction is one such measure which you, Mr Mishustin, mentioned. Plans are to use wood to build at least 20 percent of residential buildings and social and cultural facilities. Another example is promoting the use of alternative energy and the green economy by using forest industry waste as bioenergy raw materials. In remote regions, this will facilitate the conversion of municipal boiler houses from fuel oil and coal to alternative wood-based biofuels, such as pellets.
Ninth, in conjunction with the Forest Preservation federal project which is part of the Environment national project, we have planned a research and technical upgrade programme for the forestry industry. The research part is critical if we want to objectively assess our forests’ role in carbon pickup, regulate climatic processes and achieve the Paris Agreement’s global goals.
Once implemented, this strategy will significantly change the landscape of forestry. These comprehensive measures will increase the industry’s profitability by creating the most favourable environment for domestic processing of timber resources and the consumption of products. As a result, the forestry sector’s contribution to GDP will double. The added value created by the forestry complex should increase by over 70 percent.
The above approaches, in conjunction with restricting the export of round timber and low-value-added products, should take the domestic market for lumber goods and services to a new level. We will be able to increase the production of sawn timber by 55 percent, chipboard by 30 percent, plywood by 40 percent, paper and cardboard by 30 percent and wooden house sets by 60 percent. We will also preserve and restore forest resources, which are our country’s assets and pride. The forest cover in the Russian Federation will thus increase by 3 percent.
As distinct from the current version, this new version of the strategy contains annual objectives which the responsible federal bodies will report to the Government on each year. Based on this information, we will be able to promptly make decisions and adjust government support measures for reaching the objectives.
Mr Mishustin, while working on this strategy, we involved all federal executive bodies concerned and our scientists. We also asked for the opinion of our colleagues from the Federal Security Service, the Audit Chamber, the Federal Assembly and the regions of the Russian Federation.
After this strategy is reviewed at the Government meeting, we will prepare a detailed plan for implementation.
Mikhail Mishustin: Thank you, Ms Abramchenko. It is necessary to promptly complete the work on this document so that we are able to review it at the Government meeting on Thursday.
