The forestry market in France
Forests play a lead role in France’s natural and cultural heritage. In addition to being beautiful, forests are critical for regulating the climate, preserving biodiversity and supplying natural resources. In France, the forestry market is a complex system; economic issues are intertwined with the need to preserve this fragile ecosystem. Interview with Matthieu Gombault, Head of Wine and Forestry Banking Services at Societe Generale Private Banking.
Can you give us a sense of how diverse the forestry market is?
Forests occupy about 31%(2) of the Earth’s surface. Some of the world’s largest forests are in Brazil, Russia, Canada and the US.
In Europe, forests cover about 45% of the total surface area(3), providing biological diversity and a variety of crucial functions for the environment. Europe’s largest forest expanses are in Sweden, Finland and Spain.
In the global forestry landscape, France is no outlier – it’s about 31%(4) woodlands. With more than 16.8 million hectares of forest including 12.7 million privately owned(3), France also has a massive forest cover, which is good for the nation’s economy. The forestry market includes the buying and selling of woodlands, forestry management(5), timber production, and recreational and tourism business development. Forest owners – whether private, public or institutional – are essential to sustainably managing and using this land.
Can you tell us how to enhance the economic value of a forest?
French forests are a major source of raw materials, specifically timber. The timber industry fuels many sectors, including construction, furniture, energy and the paper industry. In 2022, the timber industry added more than €47 billion in revenue to the nation’s economy(6). And now that demand for forestry products is growing and technology is advancing, woodland management has really ramped up, focusing on maximum timber production alongside tree regrowth.
How are financial investment and heritage linked?
Financial investment in forests is gaining ground in France. Forests are increasingly seen as valuable assets, not just for their economic potential but also for their role in protecting the environment.
There are two major ways you can invest in forests in France:
by directly acquiring forest land, which lets investors become the owners of forest lots;
or by investing in forestry groups who manage and operate forests collectively. For investors who want to diversify their portfolio without having to actively manage forests, forestry groups are more accessible, with a more affordable entry point.
The French government has set up encouraging tax measures to promote forest investment. Investors get tax credits for their forest investments and tax deductions for capital gains from the sale of forests and woodlands. Also, with some conditions, investing in forestry groups can reduce the real estate wealth tax(7). Finally, the Sérot-Monichon Act promotes the free transfer of forest assets (by gift or inheritance) by allowing a partial exemption from transfer duties, subject to conditions.
What are the challenges to Sustainability?
Because they store carbon and regulate water cycles, forests play a vital role in combating climate change. As such, it’s important to strike the right balance between productivity and preservation of forest ecosystems. Deforestation, habitat fragmentation and overuse are major concerns. According to the French National Forestry Office(3), France lost about 73,000 hectares of woodland between 2006 and 2016 – an average of 7300 hectares per year(3). Yet since the second half of the 20th century, total forest surface area has increased considerably (+20% since 1985). France has committed to achieving net zero emissions by 2050(8), which means forests must be sustainably managed, and damaged ecosystems restored.
What kinds of certification regulate the forestry market in France?
Forest certification like the FSC (Forest Stewardship Council) label plays a key role in promoting responsible forest management. It guarantees that timber and forest products come from sustainable sources and meet strict social and environmental criteria. In 2021, some 40% of European FSC-certified forests were in France – evidence of the country’s commitment to forest sustainability(9).
The forestry market in France reflects a delicate balance between economic use and environmental protection. While the growing demand for timber and forest products is a driver of economic growth, preserving forest ecosystems and combating climate change are critical. By combining sustainable management, certification, public awareness, financial investment, recognition of the heritage value, tax incentives and the bigger picture, France can guarantee that its forests will continue to prosper while at the same time protecting their rich biodiversity for future generations.
(1) Private Equity, or venture capital, consists of investing in companies not listed on the stock exchange. It is a method of financing the real economy to help small, medium-sized and large companies.
(2) 2020 assessment of global forest resources, IGN (French National Institute of Geographic and Forest Information).
(3) ONF (French National Forestry Office). Source: www.onf.fr/onf/forets-et-espaces-naturels/+/20::les-forets-de-nos-territoires.html
(4) Source: IGN (French National Institute of Geographic and Forestry Information), inventaire-forestier.ign.fr/spip.php=
(5) Sustainable forest management.
(6) Data from the French Ministry of Agriculture and Food.
(7) The tax benefits described are only for natural persons, not legal entities (including ).
(8) Under the Paris Agreement, signed at the UN by 196 countries, in force since 4 November 2016.
(9) Forest Stewardship Council (FSC) 2021 Annual Report.
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Interview with Matthieu Gombault, Head of Wine and Forestry Banking Services at Societe Generale Private Banking, and...
Interview with Matthieu Gombault, Head of Wine and Forestry Banking Services at Societe Generale Private Banking.
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