Bhutan, a forest-abundant country, aims to earn a revenue of Nu 10 billion from the export of wood and wood products in the next five years.
The Minister of Energy and Natural Resources, Loknath Sharma, announced this during a recent live television discussion.
He said that the government would soon introduce a timber project that will help Bhutan to earn Nu 10 billion within the next five years.
“We have to derive economic value from our forest resources,” Lyonpo said, adding that the government is reviewing the relevant policies.
He added that Bhutan is in discussion with Singapore and Japan to explore a carbon credit mechanism. Through this mechanism, Bhutan can participate in international carbon credit markets, where it can sell its excess carbon credits to countries and organisations seeking to offset their emissions. This will be a major source of revenue for the country.
Prime Minister Dr Lotay Tshering expressed Bhutan’s commitment to boost wood product exports during the 35th Bhutan Chamber of Commerce and Industry’s annual general meeting on September 8.
He said that the government would announce soon to permit the sale of timber in log form, which is currently not allowed.
The Forest and Nature Conservation Act of Bhutan 2023 states that the ministry shall not allow the export of timber and firewood except in situations where the timber has no market within the country.
The export of wood-based products to countries like India and Bangladesh gained attention in 2020 and a report was also prepared titled: Report on Export Potential for Wood Products, Establishment of Mega Wood Processing Unit and Possible Import Substitution in Bhutan.
The report was discussed in the Cabinet
As per the National Forest Inventory Report 2016, the total growing stock of Bhutan’s forest was estimated at 1,001 million cubic metres (m3), with an average growing stock per hectare of 261 m3.
Despite this, only 5 percent of the total forest area was used for commercial production. The report suggested that 5.79 million m3 of timber could be sustainably extracted from Bhutan’s forests annually.
However, recent data from the National Forestry Inventory Report 2023 show the country’s declining total growing stock to 759 million m3, with an average of 283.65 m3 per hectare.
If Bhutan can produce and export wood and wood-based products, it can not only substitute imports but also can earn revenue.
According to Bhutan Trade Statistics, the country imported Nu 4.28 billion worth of wood and wood-based products in 2022, with wood charcoal import constituting about 80 percent, amounting to Nu 3.48 billion. This was an increase of Nu 1.03 billion from 2021.
Bhutan also exported Nu 217.87 million worth of wood and wood-based products to India and other countries in 2022. It saw an increase of Nu 42.88 million from the 2021 export figure.