Financial Stability And Market Structure Of Logging Contractors : Assessing Economic Resilience In The Transition To Fossil-Free Forestry

Le résumé fourni par la source

The transition to fossil-free operations in the forestry sector is essential for meeting the EU’s climate goals. Logging contractors (LCs), vital to the softwood lumber supply chain, face financial constraints due to their small scale and capital-intensive operations. This study assesses the financial stability of Swedish LCs using Altman’s Z′-score and evaluates market structure through concentration ratio analysis from 2014 to 2023. Results from 871 LC show that over 60% consistently fell into the Distress or Gray zones, indicating widespread financial vulnerability. Meanwhile, industry concentration increased significantly, with the top 20% of LCs accounting for 74% of total turnover by 2023. These trends suggest a shift toward dominance by larger, financially stronger LCs, raising concerns about the long-term inclusiveness of the sustainability transition. By combining financial distress modelling with industry concentration metrics, this study provides a quantitative assessment of LCs economic resilience during the fossil-free transition, revealing potential barriers for smaller LCs to invest in sustainable technologies. Without policy support, the shift to fossil-free forestry may be driven primarily by larger LCs, risking exclusion of smaller contractors.

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