Russia increases the amount of logistics subsidies to support timber companies with more practical measures
On Friday, Russia held a meeting on measures to support the timber industry, and then Russian President Vladimir Putin announced a series of measures aimed at supporting the timber industry and signed Decree No. 171.
The meeting was attended by Deputy Prime Ministers of the Russian Federation Victoria Abramchenko and Denis Manturov, as well as Minister of Construction and Housing of the Russian Federation Irek Faizulin, Head of the Arkhangelsk Oblast Alexander Tsz Burski and industry insiders.
The Russian president has agreed to increase the amount of compensation for transport costs of large companies in the timber industry, from 300 million rubles to 500 million rubles, and proposed to develop a subsidy method for exporting products through the ports of the Northwest Territory. The industry is also likely to be supported by policies that defer payment of forest land lease fees.
However, as Vladimir Butorin, head of the large logging company ULC, explained at the meeting, for large companies, this subsidy amount does not exceed 7% of the company's actual logistics costs. He proposed distributing transportation subsidies to all timber companies in equal proportions on a quarterly basis.
The Russian Ministry of Industry and Trade estimates that the total amount of subsidies in 2023 will be as high as 10 billion rubles. Prior to this, timber producers had repeatedly asked the government to increase the subsidy amount to at least 50% of the transportation cost.
It was also decided at the meeting to provide additional support measures to timber industry companies in the North-West Federal District, namely to consider the possibility of increasing the export volume of timber products by rail and to provide subsidies for the sea transport of woodworking products from ports.
According to Russian Railways, the volume of timber cargo loaded in 2022 has been reduced by 22%, or 11 million tons, while the average monthly transport applications have increased by almost 10 times, and these applications include both factories and trading companies.
Russian Railways is negotiating with government departments and plans to give priority to the transportation applications of timber production enterprises in the next rules.
The meeting also agreed to a proposal by timber companies to defer lease payments for areas that are not currently being logged. At the same time, in order to support domestic demand, low-rise prefabricated wooden houses will be included in the resettlement program for emergency construction and an additional infrastructure budget loan of at least 15 billion rubles will be allocated over the next two years for the conversion of municipal boiler plants to pellet fuel.
According to Aleksander Dyatlov, deputy chairman of the Arkhangelsk state assembly, it is crucial that the president proposes during the meeting concrete measures to support the industry, which many companies in the timber industry have been hoping for for a year .