Yes. Rwy12 Libraries must be availalbe in the system for Rwy12 to access them.

The Rwy12tutorial.PDF explains it on p.p. 11-13
It reads in part:
"Adding New Libraries
14. Question: I downloaded a new library of objects that was just uploaded. How do I
install them so they will be available to the Rwy12 program?
Answer: It is probably best to first take a quick look at the structure of any properly
prepared library.
- The structure will include an xml file – example; add_Balloons.xml. This xml file is to be
copied to your Rwy12 program folder. While making the copy you will see other xml files in
that folder.
- It will include an img folder with thumbnail images - the images you see when selecting
an item in the Rwy12 program. The folder with these images will have a name that usually
suggests its contents; for example; Hot Air Balloons - S. Kahn. The folder with the
thumbnail images should be copied to your Rwy12/img folder. While making the copy you
will see other folders with thumbnail images in them in the img folder.
- There will also be a “library bgl” - example; add_Ballons.bgl. The library bgl file
should be copied to your Static Objects Library/Scenery folder.
- And there will be a set of textures relating to the library items. the textures should be
copied to your Static Objects Library/Texture folder."

P.S. Most of us have bought EZ-Scenery from abacuspub.com for $29 which has all installed Rwy12 Libraries available

Link to Rwy12tutorial.PDF