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Opal workers face uncertainty

Philip Hopkins

ANOTHER 14 workers at Opal Australia Paper’s Maryvale Mill are set to be temporarily stood down tomorrow as a result of a lack of hardwood fibre for the mill’s white copy paper production. The stand-down of the 14 workers from the deinking production team follows the stand-down of 35 workers from the direct production M5 team from January 1. The M5 machine produces white paper. A spokesman for Opal said no decisions around further stand-downs had been made at this stage. “Until mid-February, Opal team members who may be stood down will receive full pay,” he said. This outcome was a result of talks with the state government and unions. “This is intended to provide certainty for Opal team members while the company and the Victorian government progress discussions on any further support for the mill’s future operations.” The Maryvale mill, with more than 800 workers, is the Latrobe Valley’s biggest employer, ran out of hardwood fibre to make white sheets of paper on December 23. The lack of fibre is a result of a Supreme Court decision in November, which found that VicForests was not doing enough to protect two species - greater gliders and yellow-bellied gliders. As a result, VicForests was ordered to scale back its timber harvesting in the state’s native forest. The state government body supplies hardwood pulpwood to the Maryvale Mill for white paper production. VicForests has appealed against the Supreme Court decision. A hearing is expected in March. The Opal spokesman said AP had been working to address the current shortfall in VicForests’ supply. “To be viable, the alternative supplies must match a range of strict criteria, including species, availability, volume, cost, logistics and long-term supply,” he said. “To date we have been unable to identify viable

Another 14 workers at Opal Australia’s Paper’s Maryvale Mill are set to be temporarily stood down today.

Photo: File

alternative sources of wood.” In addition to Opal’s employee assistance program, the state government has set up a worker support service. The Opal spokesman said this service would help workers “affected by potential stand-downs and operational changes as may be required as a consequence of a possible future scaling-down of white side manufacturing, one scenario currently being considered”. “Opal continues to consider a number of different operational scenarios for the longer term, in case possible alternative wood sources are below the volumes required or are not commercially feasible,” he said. “This is a complex situation and no longer-term decisions on operational changes have been made at this stage. While the current situation is difficult for everyone, Opal remains committed to keeping our team members, customers and key stakeholders updated on further developments.” Given the supply shortfall from VicForests, Opal has been using plantation eucalypt volumes to produce packaging papers. Proportions of fibre inputs differ across the packaging range, which includes bag paper, sack paper, liner board, fluting medium and industrial papers. Opal’s 2022 Sustainability Report noted that Opal was committed to the long-term transition of its Maryvale operation to 100 per cent plantation wood and recycled fibre. About 18 per cent is supplied from state native forests and four per cent from hardwood sawmill residues. Maryvale has been losing pulpwood supply from state forests for more than a decade. Under the government’s 1996 agreement with AP, it was obliged to supply about one third (a minimum of 350,000 cubic metres) of the pulp for Maryvale’s manufacturing of copy paper, with two-thirds coming from hardwood plantations. This agreement expires in 2030, when native forestry is scheduled to end under the state government’s forestry plan. In the interim, large bushfires, resource cutbacks and litigation from environmental groups have severely curtailed pulpwood supply to Maryvale. The government acknowledged in parliament last year that after the 2009 bushfires, government supply of pulpwood from mountain and alpine ash fell to 265,000 cubic metres. This further fell to now just 50,000 cubic metres of mixed species pulpwood under the agreement. In June 2020, the agreement was varied to allow silvertop ash to be substituted for mountain forest pulp log. Silvertop ash is classified as ‘mixed species’ timber. The government said the variation provided for up to 40,000 cubic metres of mountain forest pulpwood to be substituted with silvertop ash from 2019-21 and 2023-24 inclusive. Other causes in the agreement also allow variations. Green groups in recent years have strongly criticised AP’s use of native timber for copy paper production, and have put pressure on retail outlets not to stock it. In the interim, AP has been strengthening its packaging division to take advantage of the growth in parcels as online retailing continues to grow as a percentage of retail sales. At the same time, copy paper is under long-term threat from the use of information sent increasingly via the internet.

Mill has confidence it can meet government demand

Philip Hopkins

OPAL Australian Paper is confident that the Maryvale Mill will be able to meet the demands of the federal government’s intensified climate policy. Maryvale is included in the federal Labor government’s upgraded ‘safeguard mechanism’ policy, which is an integral part of its broader climate action. Created in 2016 by the former Coalition government, the safeguard mechanism gives the federal government powers to enforce caps on the nation’s 215 biggest emitters of carbon dioxide. The benchmark is industrial sites that emit more than 100,000 tonnes of CO2 a year. The Coalition argued that technology was the best way to cut emissions and thus did not set emission reduction targets. However, the changes announced last week by the Climate Change and Energy Minister, Chris Bowen, mean that from July 1, the biggest emitters will have to cut their carbon footprint 30 per cent by 2030. In Victoria, 18 industrial enterprises are affected. In Gippsland, apart from Maryvale, this includes ExxonMobil’s Gippsland Basin gas project - the state’s heaviest emitter - and BlueScope’s Western Port steelworks. An Opal spokesman said the Maryvale site had been covered under the safeguard mechanism since it came into effect in 2016. “Opal is aligned with the Australian government’s emission targets,” he said. “As a business, we’re focussed on progressively reducing our environmental footprint, with a greenhouse gas emissions reduction target of 45 per cent by 2030 and reaching net zero emissions by 2050.” The spokesman said Opal was focussed on the principles of the circular economy. “We are committed to reduce waste through reuse and recycling. We will also continue to transition our energy use to renewable resources,” he said. At Maryvale, 20,205 tonnes of brown recycled fibre produced 17,004 tonnes of recycled brown pulp, while 37,456 tonnes of white recycled fibre produced 18,571 tonnes of recycled white deinked pulp, the company’s figures show. The spokesman said packaging was an integral part of its sustainability targets. This approach included 100 per cent reusable, recyclable or compostable packaging by 2025; and 60 per cent of average recycled content, as defined by FSC and PEFC certifications, to be included in fibre-based packaging by 2025. Also, the aim was to minimise problematic and unnecessary single-use plastic packaging by 2025, he said. Opal’s research team was aiming to eliminate, redesign and/or replace single-use plastic with fibre-based packaging. In 2022, Opal and JBS Foods created a 100 per cent recyclable corrugated carboard dunnage solution that won gold in the Sustainable Packaging Design of the Year industrial subcategory at the 2022 Australian Packaging and Innovation Design Awards. The spokesman said Opal already procured 26 per cent of its electricity from the Lal Lal wind farm in Moorabool Shire near Ballarat. “Opal operates the largest baseload renewable electricity generator in Victoria, powered by biomass,” he said, as well as a biogas generator in NSW. Maryvale’s baseload energy is produced through its kraft pulping process, which produces black liquor as a renewable energy resource. In 2021, the Maryvale site produced 567,177 tonnes of black liquor for steam production, meeting 56 per cent of the mill’s thermal energy needs. Of the total Opal Group’s electricity usage of about 900,000 megawatt hours, 52 per cent was generated from renewable resources - 26 per cent from the wind farms and 26 per cent from renewable biomass fuels onsite. “Opal is investigating multiple green energy projects to form part of Opal’s electricity supply solution into the future,” the spokesman said. Energy intensity in fibre packaging had fallen by 5-10 per cent since 2017. “With a target of one per cent efficiency improvement year on year to 2030. Opal’s 2022 Sustainability Report noted that 92 per cent of the company’s wood and fibre products came from suppliers certified by the world’s two main certification bodies - PEFC and FSC. The report said in 2021, 78 per cent of the Maryvale and Botany inputs were plantation wood and recycled fibre Fifty-four per cent plantation and 24 per cent recycled. Of the rest, 18 per cent was from state forests and four per cent hardwood sawmill residues. “Opal is committed to the long-term transition of its Maryvale operation to 100 per cent plantation wood and recycled fibre supply,” the report said. The sustainability report emphasised the importance of Maryvale’s Energy from Waste project. The $600 million plant aims to create jobs in the Latrobe Valley and secure the mill’s future energy needs. It will divert about 325,000 tonnes of nonrecyclable waste from landfill and reuse it to generate steam and electricity to replace natural gas and coal-fired electricity. The plant will reduce Victoria’s greenhouse gas emissions by about 270,00 tonnes per annum, which would give a net energy benefit of gas and electricity to power more than 50,000 homes, the report says.

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