Friday, December 12, 2025
The German timber industry, a foundational pillar of the nation’s construction and manufacturing sectors, is grappling with a severe and complex raw material paradox. At the recent Branchentag Holz (Wood Industry Day) in Cologne, leading German sawmill associations sounded a critical alarm: while German forests are estimated to hold vast volumes of standing timber, the accessible supply of fresh sawlogs has dropped to alarming lows, driving the sector towards an “existential crisis” by early 2026.
This unusual situation—a raw material shortage coexisting with significant in-forest stocks—was the dominant theme of the 2025 timber industry gathering, forcing industry leaders, forest owners, and policymakers to confront a perfect storm of environmental shifts, economic headwinds, and new European regulation.
For the better part of the last decade, the German timber market was flooded with damaged wood, primarily spruce logs felled en masse due to the catastrophic bark beetle infestation (especially in regions like the Harz and Bavaria) and severe wind damage from storms. This damaged timber provided sawmills with a consistently cheap, if logistically challenging, raw material source, enabling high production and export levels.
The unexpected success in controlling the bark beetle population, combined with relatively cool and wet weather in the preceding summer of 2025, has dramatically reduced the volume of forced-harvested wood. This ecological victory has resulted in an abrupt “hangover” effect for the sawmills:
Damaged wood dries up: The artificial supply cushion of beetle-wood is gone.
Need for fresh logs: Sawmills must now return to sourcing fresh, high-quality, standing timber for normal operation.
Forest owners hold back: This shift has coincided with a reluctance from private and communal forest owners (who own the majority of German forests) to harvest. Reasons include a lack of immediate financial pressure (due to good agricultural prices for farmer-owners) and, crucially, rising fears over regulatory compliance.
As Matthias Obermaier, a respected voice in the Bavarian timber industry, noted at a recent forum, the high demand for logs is now driven less by soaring end-product sales and more by the fear of undersupply, forcing sawmills to compete fiercely for the limited fresh material.
Compounding the supply issue is the looming shadow of the EU Deforestation Regulation (EUDR). While a much-needed step for global climate action, the German timber industry argues that the regulation’s current implementation framework poses an immediate, catastrophic threat to domestic log supply.
The EUDR mandates full traceability of wood products down to the specific plot of land. Industry representatives warn that the immense bureaucratic burden and the requirement to pass reference numbers along the entire value chain are simply “unworkable” for the highly fragmented German forest ownership structure, which includes millions of small, private plots.
The industry’s central fear is that smaller, non-industrial forest owners will choose to suspend harvesting altogether rather than face the complexity, financial cost, and legal risk of non-compliance. This withdrawal of a critical volume of wood from the market would instantly trigger severe raw material shortages, dwarfing the current crisis.
The German Sawmill Industry Association (DeSH) has appealed directly to forest owners to increase their harvests of spruce and pine, emphasising the industry’s need for high-quality, fresh timber to sustain operations and fulfill orders in the coming year.
The log shortage is creating a punishing economic squeeze on German sawmills:Economic Factor Impact on Sawmills (2025) Finished Sawn Timber Demand Low, due to a severe slump in domestic residential construction. Sales prices are depressed. Raw Log Prices High, driven up by intense competition for scarce fresh spruce and pine sawlogs. Prices are at a three-decade high in some regions. Resulting Margin Drastically shrinking profit margins, forcing production cuts (up to 95% capacity affected in some areas), and increased use of short-time work.
The low profitability is forcing large sawmill operations to run at a sub-optimal level (around 80% capacity is the minimum for major plants), primarily to retain staff and maintain core machinery, drawing on reserves built up during the pre-2023 boom years. The immediate priority is operational survival, not necessarily profitability.
Despite the immediate raw material crisis, the long-term outlook for wood as a sustainable construction material in Germany remains positive. The market for Engineered Wood Products (EWP)—such as Glulam, LVL, and the rapidly growing Cross-Laminated Timber (CLT)—is forecast to grow at a Compound Annual Growth Rate (CAGR) of over 10% through 2033. This growth is driven by urbanisation, regulatory support for sustainable building, and the superior performance of mass timber in high-rise construction.
However, the raw material composition of this growth is shifting. Data presented at the International Softwood Conference highlighted that due to climate change and the bark beetle crisis, Germany’s spruce stocks are projected to fall dramatically over the next few decades. This has prompted industry experts to urge a strategic pivot:
The industry must do more to promote pine as a structural timber, as its share in production will inevitably increase compared with the traditional, but now increasingly vulnerable, spruce.
In the short term, the market will remain tense. While the US export market has offered a crucial outlet for some German sawn timber, the domestic construction revival is lagging. The consensus among the timber industry at the Cologne summit was clear: unless decisive political action is taken to simplify the EUDR and motivate forest owners to resume sustainable harvesting, the raw material shortage will continue to tighten, threatening the very foundations of Germany’s wood processing and timber construction sectors.
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Tags: construction slump, EUDR, German Forestry, German sawmills, German Timber Industry, Raw Material Crisis, Softwood Log Prices, timber shortage
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