2024 was a pivotal year for the pulp, paper, and forest products industry, navigating an evolving landscape defined by global challenges, regulatory milestones, and emerging opportunities.
From supply chain disruptions due and natural disasters to regulatory changes like the EU Anti-Dumping Ruling and EUDR amendments, 2024 was a year of significant change for the industry. For professionals planning ahead, understanding the key events and trends of the year is crucial. Let’s take a look at the major moments of 2024 that influenced the industry and what they mean for 2025.
Latin America is solidifying its role as a key player in the global pulp industry, driven by significant investments and expansion projects that are reshaping the market. The region’s favorable climate for eucalyptus plantations, abundant resources, and cost-effective operations have made it a hub for new developments.
Here are some of the major pulp mill projects underway:
These projects highlight a transformative period for the global pulp industry. Brazil, the world’s largest pulp producer, is further cementing its dominance through massive investments.
The focus on sustainability in these developments aligns with the rising global demand for eco-friendly products. Thanks to faster growth cycles and lower costs, Latin America’s competitive edge in eucalyptus-based pulp production positions the region as a key supplier to meet this demand.
However, this rapid expansion raises concerns about market dynamics. Increased supply could drive down pulp prices if demand doesn’t grow at the same pace. Environmental and social impacts of large-scale projects will also require careful management to ensure long-term sustainability.
Latin America’s new pulp mills represent both opportunities and challenges, with companies like Arauco, CMPC, Paracel, Bracell, and Eldorado Brasil leading the way. The region’s growing dominance will continue to shape the global pulp market for years to come.
In August 2024, the US Department of Commerce announced a significant increase in tariffs on Canadian softwood lumber imports, raising the combined duty rate from 8.05% to 14.54%. This decision is part of a longstanding trade dispute between the two nations. The US alleged that Canadian lumber benefits from government subsidies, leading to unfair competition in the American market.
The increased tariffs are expected to have several implications for the industry:
The Canadian government has strongly opposed the tariff hike, labeling it "unfair and unwarranted." Efforts are underway to challenge the duties through various trade mechanisms, aiming to resolve the dispute and mitigate its impact on the industry.
This development adds another layer of complexity to the North American lumber market, influencing production decisions, trade flows, and economic conditions on both sides of the border.
The pulp, paper, and forest products industry faced a tumultuous year. A mix of geopolitical tensions, labor strikes, and natural disasters significantly disrupted supply chain operations.
The year began with turmoil in maritime shipping. Attacks on vessels in the Red Sea prompted numerous container ships to bypass the Suez Canal, opting instead for the lengthier route around southern Africa.
GEP reported an astonishing 80% decline in maritime traffic through the Red Sea and Suez Canal, with 62% of global shipping capacity taking alternative routes. As a result, global shipping rates soared. For instance, Tim Denoyer, a senior analyst at ACT Research, observed that container shipping costs from Shanghai to New York tripled, rising from $3,000 to $7,800.
March brought additional difficulties with labor strikes in Finland that directly affected the country's freight and rail transportation sectors. Major companies like UPM and Metsä Group were forced to shut down several mills, including UPM's Kouvola, Rauma, and Kaukas facilities. The closings disrupted production schedules and caused widespread effects throughout the supply chain.
Furthermore, a major gas explosion at Metsä Group’s Kemi bioproduct mill further interrupted operations, intensifying challenges for downstream suppliers and partners.
The industry faced even more pressure in the fall as two major hurricanes struck the Southeastern United States within weeks of each other. With ports damaged, transportation routes disrupted, and timberland severely affected, the hurricanes inflicted unprecedented damage on forest-rich states like Georgia.
According to WSAV-TV, the Georgia Forestry Commission (GFC) estimates that Hurricane Helene caused a timber resource impact totaling $1.28 billion. The late September hurricane affected 8.9 million acres of forestland in Georgia.
Examining ResourceWise data at the beginning of November from Brooks, Echols, Lowndes, Ware, Jefferson, and Madison counties in Georgia following Hurricane Helene indicates these changes in stumpage product groups:
These events underscore the importance of resilience and preparedness. Supply chain disruptions like these emphasize the critical need for dynamic planning, proactive risk management, and continuous monitoring of global developments. Professionals equipped with current market insights can anticipate changes and adapt to protect their operations in the face of unforeseen crises.
The EU’s Anti-Dumping Ruling & Opportunities for Forest Products Professionals
One of the major shifts in 2024 came from Europe, where the EU implemented anti-dumping duties between 23.7% and 36.4% on imports of Chinese biodiesel and HVO. This decision will disrupt Europe's largest source of biodiesel and HVO imports. As a result, several feedstocks are poised for renewed market interest, such as crude tall oil (CTO). This advanced biofuel feedstock, a by-product of the pulp and paper industry, may experience increased demand due to shifts in the biofuel sector.
As a result of this ruling, the biofuels market is expected to undergo swift changes in the EU and other regions like the US. This will likely lead to a significant increase in production demands to support the rising adoption of biodiesel, driven by mandates and regulations such as the Renewable Energy Directive (2018/2001) or RED II.
As the demand and value of CTO, a byproduct of the kraft pulping process, rises, producers can access a new revenue stream. By leveraging the increasing worth of CTO, companies can enhance their profitability and secure a competitive advantage in the industry.
The move to use CTO as a key feedstock for biofuel production offers a strategic edge for producers aiming to broaden their product range and maintain a competitive position in a swiftly changing market. With the increasing demand for biofuels, harnessing the potential of CTO can set producers up for enduring success and sustainability within the biofuels sector.
At the start of the previous year, FisherSolve reported that 187 mills were involved in extracting tall oil. Due to historically low prices and variations in yield and quality depending on wood species, not all pulp mills were producing crude tall oil. However, the growing interest in utilizing CTO for biofuel production has invigorated the tall oil market. We anticipate this trend will intensify further with the implementation of anti-dumping duties.
This trend presents long-term growth potential for producers. By integrating biofuel production into business operations, companies can diversify offerings, gain profitability, and support sustainability goals aligned with broader environmental priorities.
While the European Union Deforestation Regulation (EUDR) was formally adopted in 2023, a series of significant developments took place in 2024. Initially scheduled to go into effect in December 2024 for larger operators, the implementation timeline was extended by one year for both large companies (to December 2025) and smaller enterprises (to June 2026).
The delay was a response to widespread international criticism. China expressed opposition to the EUDR, mainly due to concerns about the security risks associated with sharing geolocation data. The situation complicates compliance for Chinese exporters.
This issue is significant because China is a key player in global trade, especially in the forest products sector. It is a major supplier to the EU, offering products like furniture, plywood panels, and cartons.
Through its Belt and Road Initiative, China manages over 30% of the global forest products supply chain. Any deviation from the EUDR regulations could severely affect these supply chains. China's resistance to the EUDR could disrupt the global market for timber, paper, and pulp products, potentially leading to shortages and higher costs for businesses reliant on these materials.
China's opposition mirrored the position of the United States. Twenty-seven US senators called on the EU to postpone the EUDR's implementation, claiming it acts as a "non-tariff trade barrier." They cautioned that it could interfere with the $43.5 billion forest product trade between Europe and the US
Amendments to the EUDR introduced a new “no-risk” country classification, designed to streamline compliance. Businesses sourcing materials from these countries are exempt from submitting due diligence statements or providing geolocation data, simplifying regulatory processes.
Critics, however, argue that the “no-risk” classification undermines the EUDR’s original intent to combat deforestation and safeguard forests. While easing burdens on businesses, the changes also place the regulation’s broader climate goals in question.
Looking ahead, forest product professionals must anticipate the evolving regulatory landscape. New amendments and ongoing debates around compliance will require businesses to remain adaptable and proactive as they prepare to meet stricter environmental standards.
The lessons learned from 2024’s disruptions, trends, and policy changes offer critical insights to inform strategies for 2025 and beyond. Key recommendations include: