EU Birds Directive translation creates uncertainty in Swedish forestry

The global transition towards Net Zero often presents complex trade-offs between equally desirable outcomes, such as improved climate versus biodiversity conservation. For example, while a wind turbine generates fossil-free energy crucial for decarbonisation, its construction requires over 500 cubic meters of concrete, displacing biodiversity in the foundational area. 

In upstream and extractive industries, time-related considerations arise regarding the environmental impact of obtaining materials necessary for decarbonisation efforts. Short-term land biodiversity disturbance and greenhouse gas (GHG) emissions must be weighed against long-term benefits, factoring in the fact that forest can be replanted and mine areas can be restored. 

Balancing these physical trade-offs, especially when processes operate on different time scales, presents one of the most complex challenges in sustainable development. Environmental actions can have far-reaching consequences on business operations and social aspects, affecting companies and their employees.

EU Birds Directive ruling and the Swedish interpretation

A recent European Court of Justice ruling on a case from Estonia has highlighted the complexities of interpreting the EU Birds Directive, particularly in relation to forestry practices. The ruling raises questions about the threshold for intentional harm to birds or their nests during felling and thinning activities. Article 5 of the directive prohibits certain deliberate actions. 

The case involved two forestry companies filing a motion against the Estonian Environmental Board after being forced to stop felling for several months. 

While Estonian law has quantitative thresholds for nests per hectare to determine intention, such thresholds don’t exist in the current transposition to Swedish law. This creates ambiguity in assessing when felling activities might violate the directive. The Swedish Environmental Protection Agency (Naturvårdsverket) and the Forestry Agency (Skogsstyrelsen) have issued a joint summary of the implications for Swedish forestry, emphasising the current interpretation of the laws will result in more case-by-case risk assessments. 

Furthermore, the EU Bird Directive’s Article 5(d) addresses the deliberate disturbance of birds within “the period of breeding and rearing.” However, Swedish regulations don’t specify these periods, potentially allowing for more felling prohibitions outside breeding seasons. 

Implications for Swedish forestry

We previously highlighted the EU regulatory challenges facing forest product companies, including potential wood supply restrictions through policies such as EU Land Use, Land-Use Change and Forestry (LULUCF). The Swedish interpretation of the EU Bird Directive adds to the challenges for these companies in demonstrating compliance and procuring wood, potentially impacting fibre costs and supply. Individual forest owners may also face losses and decreased property values if harvesting is restricted.

The ambiguities also raise questions about forest management practices, including the ability to adapt to climate change and prevent wildfires. These restrictions could affect the valuation of forest land as collateral, as highlighted by the European Central Bank’s recent publication on climate risk factors for assets. If owners cannot perform felling activities, even if not for commercial purposes, that could prevent them from demonstrating risk mitigation of their forests. This could have a financial impact on the value of the land for collateral if a greater uncertainty factor is applied. (See the ECB’s FAQ on the climate factor.)

With nearly half of Swedish forests owned by several hundred thousand individual owners, these restrictions could challenge property rights protected under the European Convention of Human Rights. Reports suggest the EU Commission is in the process of revising the text to address concerns of landowners and forest product companies. 

This situation emphasises the need for Swedish companies to measure, collect and effectively communicate biodiversity data to a wide range of stakeholders. Such efforts will be crucial in minimising disruptions to an industry already facing numerous regulatory challenges that impact global competitiveness and viability.