The purpose of this study was to examine the factors affecting the trade flow on forestry products within the European Union. A gravity model was used to estimate the factors affecting the trade flow. The study used a panel data set with observations of two forestry commodities between 28 EU member countries over the years 2005 to 2014. The commodities are Wood chips and particles and Industrial roundwood. The parameters are estimated with fixed effects, the result indicated for Wood chips and particles that exporting countries GDP affect the trade flow positivly (0.64) and the importing countries GDP affect positively aswell (0.36). For Industrial roundwood the exporting countries GDP affect the trade flow negatively (-0.69) and the importing countries GDP affect positively (0.80). With the estimated parameters a forecast of Wood chips and particles over the years 2015 to 2020 was made, the forecast indicated an increase in the trade flow value with 27.2%

The purpose of this study is to estimate the intra EU trade value of wood products and examine the factors affecting the trade flow. A gravity model is used to estimate the factors affecting the trade flow. The study uses a panel data set, with fixed effects, on trade in two forest products between 28 EU member countries over the period 2005–2014. The forest products are woodchips and particles (HS4401) and industrial roundwood (HS4403). For HS4401, the result suggests that the GDP of both the exporting and importing countries affect the trade flow positively (0.64 and 0.36, respectively). For HS4403, the GDP of the exporting countries affect have a negative effect (−0.69), while the GDP of the importing countries have a positive effect (0.80). In a second step, the estimated parameters are used to forecast the trade up until year 2030. The forecast suggests an increase in the trade by 47 per cent. This suggests an improved efficiency in reaching the EU climate and energy targets. That is, the trade in biofuels is expected to increase due to economic growth, which in turn works towards achieving the renewable and CO₂ emission targets in Europe.