Sunshine-Empire & EmMax

Sustainable timber investments are generating some good press lately as Wood for Good, a UK organisation working to increase demand for sustainable wood products, released at the 2011 Timber Expo last month the first ever Timber Industry Manifesto. Through this document, Wood for Good "aims to promote the suitability and sustainability of wood as a building material to the construction and logistics sectors and associated professionals such as architects and design engineers."

This new declaration clearly shows that the UK timber industry is committed to cultivating and utilising domestic timber resources in a manner that is safe for the environment, beneficial for the consumer and good for the economy.

But what does the Manifesto mean for people, who are new to the industry and are yet to put their money into timber investments?

First and foremost, the Manifesto sheds light on the economic scope of the industry in the UK. With its annual value of £18 billion and over 150,000 jobs, the timber industry is showing no signs of slowing down, even when other commodities are seeing volatility in prices and profits. This proves that these investments are great for balancing out your investment portfolio and providing revenue when stocks and bonds are not performing all too well.

In addition to the financial value of timber investments, the Manifesto presents the environmental benefits of sustainable forests. These projects not only help maintain the biodiversity within certain areas, but also provide a variety of ecosystem services. Add to that the carbon sequestration capacity of forests, and you get a genuine feel-good business venture.

Investors in sustainable forestry can help the UK increase its wooded land surface from 12 per cent to 16 per cent. This way, by 2050, the natural carbon sink might be able to compensate for as much as 10 per cent of UK's national carbon emissions, bringing them closer to the emission reduction goals under the Kyoto Protocol.

The quality of timber as a building material is an added benefit, which explains the high demand domestically and internationally. Wood production is much more energy-efficient than the manufacturing of other common materials, such as concrete and metal. To get a better idea of its competitive advantage, consider that it takes 24 times less energy to produce timber than it does to make steel.

But the products from your potential investment won't be a preferred construction material only because of its energy efficiency. Wood has the ability to prevent heat leakage through building walls, thus, providing for good thermal insulation. The Manifesto claims that wood's thermal insulation properties are five times better than those of concrete, 10 times better than brick and 350 times better than steel.

Last, but not least, the Manifesto makes a seven-point proposition addressed to the UK government. The purpose of the proposition is to advise officials on ways to support existing and encourage new sustainable timer investments. Among them are a reduced value-added tax on sustainable timber and timber products; a government endorsement of the eco material and making it the material-of-choice for public construction projects; recognition for its carbon sequestration qualities; government incentives for recycling timber products.

While most of these recommendations, if approved, will give a huge boost to the industry as a whole, subsequently giving greater incentives for investors to place their money on green, some of them do seem a bit impractical. They call to governmental favouritism toward the timber industry, which goes against common capitalist market forces. This, in turn, may place other industries at serious disadvantage on the competitive market, especially in tough economic times. Government officials will also be less likely to side with one industry due to potential conflict among lobbyists. So investors should not rely exclusively on heavy political support.

With that said, there are a number of government incentives available for the development of forestry investment projects across the UK. For example, revenues from timber investments are exempt from inheritance and income tax. Also, the Woodland Improvement Grant (WIG) provides funding for forestry investment projects to support the benefits that these initiatives deliver to the public - biodiversity, scientific advancements and accessibility to the public. Therefore, some of the funds under WIG are the Woodland Biodiversity Action Plan, Woodland Sites of Special Scientific Interest (SSSI) Condition Improvement and Woodland Public Access.

The Woodfuel WIG is a new grant, which supports the sustainable production of woodfuel and other timber products. It is designed to fund the development of roads and inventory that are essential for harvesting and transporting timber out of the forest. At the local level, the Scotland Rural Development Programme (SRDP) provides grants, which can be used towards buying equipment to harvest and process woodchip or pellets.

The Timber Industry Manifesto is a must-read for prospective investors. They will gain some insider information on what makes forestry an attractive alternative to traditional investments.

Timber Investments is an information portal keeping you up to date on timber market facts, trends, news and forestry investment opportunities. The value of investments can go up or down according to market conditions.

Labels: Calls, First, Industry, Investments, Manifesto, Sustainable, Timber