Sustainable development of the wood processing industry—the achievement of this operational objective of the Government Action Program—is now the responsibility of the Ministry of Agrarian Policy and Food, whereas until recently, forestry was overseen by the Ministry of Economy and Environment.
According to the Program, which the Cabinet of Ministers submitted to the Verkhovna Rada, the Ministry of Agrarian Policy and Food is tasked with approving the Strategy for the Development of Ukraine’s Wood Processing and Furniture Industries for the period up to 2030 and adopting an operational plan of measures for its implementation for 2026–2028 (2026).
Other tasks in this area include introducing, in 2027, uniform rules for the functioning of the timber market for all permanent forest users and forest owners; completing the corporatization of the state-owned enterprise “Forests of Ukraine”; and imposing a permanent moratorium on the sale of state-owned shares.
The forestry sector and the State Forest Resources Agency (State Forest Agency) were under the jurisdiction of the Ministry of Agrarian Policy until 2019, after which they were transferred to the jurisdiction of the merged Ministry of Energy and Environmental Protection (Ministry of Energy and Environment), and in 2020, following its split, they were transferred to the jurisdiction of the Ministry of Environmental Protection and Natural Resources, where they remained until the summer of 2025, when yet another merged ministry was created—the Ministry of Economy, Environment, and Agriculture.
People’s Deputy Olga Vasilevska-Smaglyuk criticized the possible decision to return the forestry sector to the jurisdiction of the Ministry of Agrarian Policy. “The key risk is a change in the very philosophy of forest management. Forests cannot be viewed merely as an economic resource that needs to be used more efficiently. After all, they are first and foremost natural capital, an ecosystem, and a component of the country’s environmental security,” she explained.
In her view, such a transfer could also slow down the corporatization of the state-owned enterprise “Forests of Ukraine,” the digitization of timber accounting, and the transition to European forest management standards.
CORPORATIZATION, FOREST, MINISTRY OF AGRARIAN POLICY, TIMBER, WOOD PROCESSING
The program of the Cabinet of Ministers of Ukraine calls for increasing timber harvesting to 15.5 million cubic meters in 2027, boosting production in the woodworking and furniture industries by 5%, and raising the share of high-value-added products in exports by 10%.
According to the program, in 2026 the government plans to adopt the Strategy for the Development of Ukraine’s Woodworking and Furniture Industries through 2030 and approve an operational plan of measures for its implementation in 2026–2028.
In 2027, the government plans to introduce uniform rules governing the timber market for all permanent forest users and forest owners, regardless of ownership status.
In addition, in 2026–2027, the government plans to implement the European Union Regulation on the Trade in Goods Related to Deforestation and/or Forest Degradation (EUDR), as well as a system for due diligence and geospatial traceability of timber origin based on state information systems.
Furthermore, the corporatization of the state-owned enterprise “Forests of Ukraine” is scheduled to be completed in 2027, along with the introduction of a permanent moratorium on the sale of state-owned shares.
According to the Ministry of Economy, Environment, and Agriculture, the total volume of timber harvested in Ukraine in 2025 amounted to 11.7 million cubic meters.
As previously reported, on August 17, the Cabinet of Ministers of Ukraine approved the Government Action Program. Verkhovna Rada Chairman Ruslan Stefanchuk stated that parliament will consider the Program in the near future in accordance with established procedure.
The Cabinet of Ministers of Ukraine has authorized that, for the duration of martial law and for 12 months following its end, timber harvested during sanitary logging be counted toward timber harvesting limits for main-use logging in mature and overmature stands in all forests, except for mountain forests in the Carpathian region, the press service of the Ministry of Economy, Environment, and Agriculture reported on Thursday.
“The adopted resolution will allow for more efficient use of forest resources under martial law and ensure additional volumes of timber to meet the needs of the economy, communities, and the defense sector. The document strengthens requirements for forest management, biodiversity conservation, and forest restoration. ‘We are establishing clear rules for forest users while ensuring a balance between the state’s economic needs and environmental responsibility,’ the press service quoted Taras Vysotsky, Deputy Minister of Economy, Environment, and Agriculture, as saying.
According to the statement, this decision will allow forest users to further meet the timber needs of the economy, the population, and the Armed Forces of Ukraine, while enabling state-owned forestry enterprises to increase the supply of marketable timber to the market.
At the same time, if the application of the new mechanism leads to a reduction of 30% or more in the main-use logging quota in mature and overmature stands, a mandatory recalculation of the quotas with a corresponding reduction is provided for. After logging, the forests will be subject to mandatory restoration in accordance with legal requirements.
In addition, the resolution clarifies the requirements for conducting sanitary measures and addressing the consequences of hostilities in forests, defines the specifics of certain types of logging, and introduces a mechanism for correcting technical errors in electronic logging permits.
Last year, the forestry industry received UAH 6.9 billion in net profit, which is UAH 4.4 billion more than in 2024. This was announced by Viktor Smal, head of the State Forestry Agency, during the annual public report for 2025.
“In 2025, timber worth UAH 30.4 billion was sold, which is UAH 6.7 billion more than last year. The net profit of the industry amounted to UAH 6.9 billion, which is UAH 4.4 billion more than in 2024,” said the head of the State Forestry Agency.
Thus, the growth in profit significantly outpaced the growth in revenue.
The State Forestry Agency believes that this result was achieved thanks to the reforms and digitalization of the industry, even despite the fact that during the war there was a reduction in the areas available for management.
“Before the reform in 2020, when there were more resources and less extreme working conditions, the industry managed to earn only UAH 0.2 billion — almost 35 times less. This is the best proof that the reforms we have carried out have proven their effectiveness,” said Viktor Smal.
Also, according to him, in 2025, the profitability of forestry sector enterprises was 22.8% — 12.3% more than in the previous year, and the average salary increased by almost UAH 6,000 and currently stands at over UAH 30,000.
“Another indication of the success of the forestry sector reform was the amount of taxes paid. In 2025, UAH 16.1 billion was transferred to the budget, which is UAH 6.8 billion more than in the previous year. This is an absolute record in the history of independent Ukraine. And I am proud of this result, which was achieved through the diligent and systematic work of 24,000 employees in the industry,“ concluded the head of the State Forestry Agency.
As noted by the head of the State Enterprise ”Forests of Ukraine” Yuriy Bolokhovets, the economic results of 2025 were influenced not only by positive market conditions. There was an increase in the percentage of competitive procurement by the enterprise. For the first time, 97% of the procurement budget of the State Enterprise “Forests of Ukraine” was directed to Prozorro, resulting in savings of over UAH 700 million. Reorganization was also carried out, and administrative staff was optimized.
The team at State Enterprise “Forests of Ukraine” is constantly faced with pressure and attempts to lobby for the pre-reform opaque system of forest product sales. However, the company sells timber (except for firewood for the population and the social sector) exclusively through open auctions. Data on concluded exchange agreements for the purchase of timber is now fully open.
“The increase in forestry revenues means record growth in budget contributions, the restoration and protection of Ukrainian forests from fires, support for the Armed Forces of Ukraine, investments in infrastructure development, and technical re-equipment of forestry. Before the reform, profits were lost, but today financial flows have been de-shadowed and work in the interests of the state and the industry,” said Yuriy Bolokhovets.
Since the beginning of 2026, Lesy Ukrainy has harvested 244,000 cubic meters more timber products than in the same period in 2025, the state-owned enterprise’s press service reported on its Telegram channel.
According to the report, the pace of harvesting has increased by 44%. The work is being carried out ahead of schedule, despite unfavorable weather conditions – snowfalls and severe frosts.
At the same time, Lesy Ukrainy noted that businesses are choosing contracted products with a certain delay. The main reasons are the lack of electricity and logistics problems, in particular due to enemy attacks on the railway in some northern regions.
“We are in constant contact with our customers. In general, businesses are not refusing products, but are proposing to revise shipment schedules,” the state-owned enterprise noted.
Currently, there is an increase in the stock of certain types of timber in warehouses, but this is not critical for the winter period. The company has decided not to slow down the pace of harvesting, strictly adhering to its commitments for 2026. Lesy Ukrainy added that further developments will depend on the buyers of timber products.
The state-owned enterprise “Forests of Ukraine” has completed auctions for the first quarter of 2026, during which almost all forest products were contracted, prices for hardwood species continued to rise, and prices for coniferous species stabilized, the press service of the state-owned enterprise reported.
“Forests of Ukraine” noted that the auctions were held for the first time under the zero quota for firewood exports introduced by the Cabinet of Ministers. However, in the process of competitive struggle for resources, market participants once again reached higher price levels.
Thus, 381,000 cubic meters were put up for quarterly auctions for the sale of industrial wood (PV), and almost 100% was contracted. Compared to the fourth quarter, the average price of firewood rose from UAH 2,300/cubic meter to UAH 2,600/cubic meter. The main reason was the rise in the price of hardwood from UAH 2,300/cubic meter to UAH 3,000/cubic meter. At the same time, the market value of softwood did not change significantly and amounted to UAH 2,400/cubic meter.
It is noted that the supply of firewood for sale by the State Enterprise “Forests of Ukraine” was distributed almost equally between quarterly and semi-annual (forward) auctions. The forward contracts for the first half of the year took place earlier: 100% of the resource (741 thousand cubic meters) was sold, with an average sale price of UAH 2.4 thousand/cubic meter.
“The tool for hedging price risks by concluding long-term contracts has once again proven its effectiveness. At least in the first quarter, products under semi-annual contracts for firewood will be slightly cheaper,” the state-owned enterprise stated.
Of the 775,000 cubic meters of round timber put up for sale at quarterly auctions, more than 99.5% was sold. The average selling price increased from UAH 6,800/cubic meter in the fourth quarter to UAH 7,300/cubic meter.
At the same time, “Forests of Ukraine” considers it incorrect to talk about a general increase in prices for commercial timber, since birch rose in price from UAH 5,700/cubic meter to UAH 7,600/cubic meter, oak from UAH 22,000/cubic meter to UAH 28,000/cubic meter, and ash from 8,000 UAH/cubic meter to 11,000 UAH/cubic meter. At the same time, alder has become cheaper, falling from 6,700 UAH/cubic meter to 5,900 UAH/cubic meter, and pine from 5,900 UAH/cubic meter to 5,600 UAH/cubic meter.
About 25% of the resource (654 thousand cubic meters) was put up for forward trading in commercial timber for the first half of the year. The average selling price at forward trading was slightly lower than the quarterly price and amounted to UAH 7.2 thousand/cubic meter. At the same time, while oak and ash were indeed contracted at prices lower than those at quarterly auctions, the situation was reversed for coniferous species, the state-owned enterprise noted.
