Hello,
Hello,
As reported in #134, German pellet prices were up about 27% in a year. The pellet industry pointed to sawmills. Less sawing leaves fewer residues.
Pulp mills want those same residues. Mercer makes pulp in Germany. This week, it announced a plan to cut its debt.
Plus listed US forests, an EUDR lesson from cocoa, and more time for carbon projects.
Here's what's moving European forestry this week:
One question for you
What's the one forest-market question your team must answer before 2027 budgets close?
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π The Big Story
π©πͺ Mercer agrees a plan to cut its debt. It says its German mills keep running.
What happened
On 2 November, Mercer International announced a plan to cut its debt. Mercer makes pulp, lumber and mass timber. It has operations in Germany, Canada and the US.
Holders of more than 87% of its senior notes signed support agreements. Senior notes are bonds. Holders of about half of its shares signed too.
About $1.1 billion of bonds would be swapped for new shares. That is about 88% of its senior note debt.
Mercer says the deal would cut about $96 million of yearly cash interest.
$400 million of new money would come in through new secured bonds. Their face value is $420 million.
Bondholders would also get $150 million of new secured "takeback" bonds.
So not all debt disappears. New secured bonds would replace part of it.
How it would work
Mercer plans a "prepackaged" Chapter 11 case in Houston, Texas.
Prepackaged means the main creditors agree the plan before the court case starts.
Only the parent company and one non-operating subsidiary would file. The operating companies would not.
Under the support agreements, the case should start by 9 November. Mercer and the main bondholders can agree to extend that date.
Mercer expects court approval about 45 days after filing. It expects to finish by the end of 2026.
What Mercer says stays the same
"This is a balance sheet recapitalization only," says CEO Juan Carlos Bueno. Mercer also says:
Its mills in Germany, Canada and the US are operating as usual.
Trade claims are to be paid in full. Vendors will be paid in the ordinary course.
Wages and benefits continue, and customers will continue to be served.
How it got here
On 1 October, Mercer chose not to pay about $25.8 million of bond interest. It used a 30-day grace period. On 30 October, an amendment to the bond terms extended that period to 90 days.
Mercer says the plan gives it cash for today's pulp and lumber markets. It also points to geopolitical conditions.
Why this matters for European forestry
Mercer has flagged German wood costs before. In its second-quarter report on 6 August, it said:
Rising European fibre costs weighed on its results.
It named regional supply shortages and intense competition from energy producers for sawmill residues.
It also pointed to strong demand for wood as an energy source.
It cut output at its German mills by about 26,000 tonnes. The reason: fibre constraints.
"Fibre" means the wood a mill uses: pulpwood, chips and sawdust.
As reported in #134, the pellet industry told the same story from the other side. Fewer sawmill residues. Higher pellet prices.
My read, and it is a read rather than a finding: Germany's wood residues have two big kinds of buyers, pulp and energy. If the plan completes, a big residue buyer would carry much less bond debt. Wood sellers are better off with more than one buyer.
What this means for you
If you sell wood or chips to Mercer in Germany: Mercer says vendors will be paid in the ordinary course. My advice: ask your mill contact if anything changes for you.
If you run a sawmill: Your residues have more than one buyer. Ask pulp and energy buyers for a price before you sign.
If you invest: Watch three steps: the filing, court approval and completion. Existing shares would be cancelled. Their holders would get about 8.5% of the new common shares. They would also get 3.5% of new preferred shares that can convert into common shares. A management share plan and those conversions could dilute both stakes. Sources: Mercer International β Recapitalization agreement announcement (2 Nov 2026) | Mercer International β Form 8-K, restructuring support agreements (2 Nov 2026) | Mercer International β Second quarter 2026 results (SEC Form 8-K, Exhibit 99.1, 6 Aug 2026) | prior ForestryBrief coverage: EFP #134
π Quick Hits
1. πΊπΈ Listed US forests: a good week in a hard year
In #135, I wrote that a listed forest company has a daily price. Here is what that looks like in the US.
Forisk's FTR Index tracks two listed US timber REITs: Rayonier and Weyerhaeuser. A REIT is a real estate investment trust. These two are listed and own forest land.
Forisk reports these returns:
Week to 30 October: +4.30%. The S&P 500 fell 0.57%.
Year to date: β12.55%. The S&P 500 is up 10.73%.
On 29 October, Weyerhaeuser reported its third quarter:
Net earnings: $61 million, down from $80 million a year earlier.
Adjusted EBITDA: $248 million, up 14%. It is the company's own profit measure, before depreciation and some other items.
Western logs, its average price per ton: $106.76 (Q1), $115.27 (Q2), $118.52 (Q3).
Southern logs sold to other buyers: $38.20 per ton in Q2, $37.67 in Q3.
It also agreed to sell about 81,000 acres of Arkansas forest for $146 million. That implies about $4,450 per hectare, my calculation. Weyerhaeuser expected the sale to close this quarter, subject to conditions.
Why it matters: A listed forest price moves fast. One good week does not undo a weak year.
The context: Rayonier, the index's other member, reported on 4 November. Its Adjusted EBITDA was $144.6 million. Net income attributable to Rayonier was $123.3 million. That included $90.6 million, after tax, from a large asset sale in Washington.
The takeaway: Read listed forest prices over years, not weeks. Compare them with land sale prices too. Sources: Forisk β FTR Index weekly summary, week ending 30 Oct 2026 (newsletter email to ForestryBrief, 2 Nov 2026) | Weyerhaeuser β Third quarter 2026 results (29 Oct 2026, PDF) | Rayonier β Third quarter 2026 results (4 Nov 2026) | prior ForestryBrief coverage: EFP #135
2. π EUDR: a satellite flag is a question, not a verdict
On 30 October, IDH published eight recommendations on EUDR data and smallholders. They come from a sub-group of the EUDR Community of Practice. IDH and Tony's Chocolonely ran the sub-group. The European Forest Institute (EFI) co-facilitates the wider community.
The report's numbers come from cocoa and coffee farms:
In one cocoa supply base, up to 98% of flagged farms were false positives.
In mostly coffee agroforestry regions, false positive rates reached 55% (Peru) to 78% (Honduras).
A false positive is a plot flagged for deforestation that was not deforested. These are case findings, not general error rates for satellite tools.
Three of the eight recommendations, which are proposals, not rules:
Verify once, share many: one field check of a plot should count for every buyer.
A right to correction: farmers need a standard way to appeal an exclusion.
One set of reference maps: the same plot should not get different verdicts from different tools.
Why it matters: In #134, I covered two forest maps for 2020. The advice was to use maps as a first screen, then check at source. This report shows what happens when the screen becomes the verdict.
The context: The facilitators wrote the report. The core group did not review or validate it. It also notes that timber is underrepresented in the evidence.
The takeaway: The main EUDR rules apply from 30 December, for most wood products. My advice: decide now who checks a flagged plot, how fast, and with which records. Sources: IDH β When data decides who can sell to the EU: eight recommendations to protect smallholders under the EUDR (30 Oct 2026) | EUDR Community of Practice β Sub-group on Smallholders and Data Ownership, Verification and Sharing, final report (14 Oct 2026, PDF) | EUR-Lex β Regulation (EU) 2025/2650 (EUDR dates) | prior ForestryBrief coverage: EFP #134
3. π Carbon and nature credits: more time, and a new club
Three updates in one week:
Verra, 27 October: Most VCS Version 5 rules now take effect on 1 July 2027, not 1 January 2027. VCS is Verra's Verified Carbon Standard. Projects that are ready can use Version 5 now.
Verra, 29 October: Two new resources for VM0047, its method for afforestation, reforestation and revegetation. One guides projects switching to VM0047. The other is a reviewer checklist, which Verra says is not exhaustive.
European Commission, 27 October: At COP17 in Yerevan, the EU launched the Friends of Credits for Nature and Biodiversity. France and Peru co-hosted. Twelve more countries joined, including Finland, Luxembourg, the Netherlands, Portugal and Spain.
The Commission calls it informal and government-led. It says future work includes endorsing a joint statement.
Nature credits are designed to attract money for protecting and restoring nature. The Commission says they could reward "farmers, foresters and other land managers".
Why it matters: Carbon rules got more time. Nature credits are still being designed. The EU plans to test them through research and pilot projects.
The context: Verra says developers and auditors asked for more time.
The takeaway: If you run a forest carbon project, most Version 5 rules now apply six months later. Check Verra's effective-dates document for your project. If someone offers you nature credits, ask which standard they follow. Sources: Verra β New effective date for VCS Version 5 (27 Oct 2026) | Verra β New resources for ARR projects (29 Oct 2026) | Verra β VCS Version 5 resources and effective dates | European Commission β EU launches Friends of Credits for Nature and Biodiversity (28 Oct 2026)
π The Weeks Ahead
Today, Thu 5 Nov: WRI webinar: agriculture and forests in the Congo Basin β online, in French and English
ThuβFri 5β6 Nov: π³ 11th International Hardwood Conference β Antwerp
November: Commission EUDR Information System trainings, all at 14:00 CET. Upstream operators: 10, 17 and 24 November. Micro and small primary operators: 12, 19 and 26 November. Register here
Mon 9 Nov: π Date set in Mercer's support agreements for starting its Chapter 11 cases. It can be extended. See the Big Story
MonβThu 9β12 Nov: ITTC 62 β Yokohama (ITTO)
Mon 9 β Fri 20 Nov: COP31 UN Climate Change Conference β Antalya, TΓΌrkiye. EU side event on 18 November, following up the Friends of Credits for Nature
Tue 10 Nov: BiodivFuture pre-proposals due, 12:00 CET (Biodiversa+)
TueβFri 10β13 Nov: FIMMA + Maderalia β Valencia
WedβThu 11β12 Nov: PuupΓ€ivΓ€ β Helsinki (Puuinfo)
Thu 12 Nov: ATIBT and UICCB workshop on assessing EUDR deforestation risk with WHISP and forest management documents
WedβThu 18β19 Nov: German Timber Congress 2026 (DeSH) β Wiesbaden | European Bioenergy Future (Bioenergy Europe) β Brussels
Thu 19 Nov: Luke's October roundwood trade statistics (Finland) | 2nd European Bioeconomy Conference (The Parliament Magazine, with Cepi) β Brussels
Tue 24 Nov: Latest date for Stora Enso's information brochure on Bergslagets Skogar. See #135
Wed 25 Nov: Forest Bioeconomy Investment Accelerator (FBIA) 2026 final event β EIB, Brussels (by invitation)
Fri 27 Nov: Timber and Circular Economy CPD β online and free (PEFC via TDUK)
Mon 30 Nov: SΓΆdra's temporary birch premium window closes. See #126 | SΓΆdra's browsing-damage challenge closes
Tue 1 Dec: SMURF Carbon Standard consultation closes, 17:00 CET
Wed 2 Dec: FOREST Partnership first joint call: pre-proposals due, 13:00 CET (up to β¬40 million)
WedβFri 2β4 Dec: 30th International Wood Construction Forum (IHF) β Innsbruck
Wed 9 Dec: π Reported Commission deadline for its UPM/Sappi joint venture decision (Case M.12270). See #128
Tue 15 Dec: Stora Enso extraordinary general meeting on the Bergslagets Skogar demerger (on or about) β Helsinki
Wed 30 Dec: EUDR applies to large and medium operators, and to micro and small operators for products the EU Timber Regulation covered
Thu 31 Dec: Mercer's target for completing its recapitalization (by the end of 2026)
Mon 1 Feb 2027: GHG Protocol request for information on forest carbon accounting closes. See #132
Wed 31 Mar 2027: Planned completion of the Bergslagets Skogar demerger (on or about)
Wed 30 Jun 2027: EUDR applies to other natural persons and micro or small operators established by 31 December 2024
Thu 1 Jul 2027: Most VCS Version 5 rules take effect (Verra). See Quick Hit 3
π‘ One Thing to Try This Week
Map who buys your low-grade wood.
Check how many buyers take your pulpwood, chips, sawdust and firewood. Here is a 20-minute check.
List everyone who bought your low-grade wood in the last two years.
Next to each, write the buyer type: pulp, panels, pellets and energy, or firewood.
Note the share of your volume each one took.
If one buyer took most of it, look for a second. Ask your forest owners' association who else buys.
Ask each buyer for a current price on the same basis. Per tonne or per mΒ³, at roadside.
One good buyer is a relationship. Two buyers are a market.
π The Forestry Communication Playbook
"Is the mill closing?"
A neighbour may ask after a Chapter 11 headline. Or a contractor, or a local reporter. The calm answer starts with what the company has said. Saying it clearly, without guessing, takes practice.
Part 1 covers the questions that arrive without warning.
π The Forest-Investment Dictionary
When a big wood buyer changes its debt, investors read the numbers first. Foresters often read them last.
I wrote the Forest-Investment Dictionary with Danish forest economist Anders Tærø Nielsen. It has 151 pages, 11 chapters, 14 printable tools, and 3 calculators. Investors learn to read a forest. Foresters learn to read a term sheet.
When the market turns, the people who can read the numbers make the better calls. The price is β¬99. Get yours below.
π The Organization β Playbook Part 3
A company in a restructuring must explain itself to staff, suppliers and neighbours. Someone has to do that work.
I wrote The Organization, Part 3 of the Playbook. It has 165 pages, 10 chapters, 10 printable tools, and a survey. It shows what it takes to be heard, and who does the work.
Almost nobody in European forestry publishes what communication costs. The survey inside starts the count. The price is β¬149. Get yours below.
π€ ForestryBriefing
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ForestryBrief publishes verified intelligence β free, three times a week, in 25+ countries. When you need that intelligence applied to your specific situation, that's a ForestryBriefing.
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Until Thursday!
Wish you all the best: Peter
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