28 FEATURE SUPPLEMENT
Thursday, August 18, 2022 Wairarapa Times-Age
FEATURE SUPPLEMENT 29
www.age.co.nz Thursday, August 18, 2022
FORESTRY IN WAIRARAPA BIOFUELS REPLACING FOSSIL FUELS - is forestry ready for this huge emerging market? The announcement that Fonterra is taking another step in its transition to low carbon production with replacement of a coal boiler at its Waitoa site in the Waikato with a 30 MW wood biomass boiler builds on the trend of food processors to adopt bioenergy solutions says the Bioenergy Association. Brian Cox, executive o˜ cer of the Bioenergy Association said that “the use of renewable biomass to replace coal to produce heat arises because of the increased use of forest residues, instead of leaving the residues in the forest to rot. In this investment by Fonterra the supply of biomass from residues as fuel has been facilitated with the entry of Wood Energy New Zealand, as an accredited wood fuel supplier, into the North Island to supply the fuel to Fonterra. Mr Cox said that “With Fonterra making this fourth transition from fossil to biomass fuel for producing heat at its milk processing facilities, they are
providing signiÿ cant leadership and demonstration on how easy it is to move from coal to biomass fuels. Such investments however need to be well planned and undertaken in partnership with their wood fuel suppliers. The transitions can’t be done overnight which demonstrates that reduction in our greenhouse gas emissions will take time.” Mr Cox said that “at the Residues2Revenues 2022 event last week it was outlined that we have the potential for adequate biomass to be available for transitioning from fossil fuels, but heat users and biomass fuel suppliers need to talk together so that each has good information on the demand and supply of bioenergy. The partnership between Fonterra and their fuel supplier, Wood Energy New Zealand, is a good example of that in action.” Residues2Revenues 2022 Conference in Rotorua saw an amazing turnout of well over 350 delegates. This was a record attendance and re˛ ects the growing recognition amongst forest owners and those
There is a lack of understanding of what biodiversity is in a land management sense, and how it rates in importance for either potential proÿ ts or other beneÿ ts.
involved in log harvesting and transport that the demand for alternatives to fossil fuels has the potential to transform the forestry sector. Biofuels, bioenergy and a range of renewable bioproducts increasingly are being added to the industry’s more traditional wood products. The economics of better-utilising forest residues, bin wood, o˝ cuts left on landings, short length or malformed logs that won’t meet MDF, pulp-mill or chip
export log speciÿ cations and sawmill residues are ÿ nally starting to stack up.
with major announcements on new investments being made now almost every month.
Low emissions energy to replace fossil fuels with electricity or solid biofuels is top of the Government’s agenda. Large industrial-scale heat and energy users throughout the country are ÿ rmly following the Government’s lead. The move to transition from fossil fuels is already well underway. Signiÿ cant conversions have been made across the country
This changing landscape means that forest owners, those involved in logging operations and those with surplus waste from sawmilling and wood manufacturing operations are looking at satisfying this current and projected future demand. Is the forestry sector in a position to supply? Source FridayO˝ cuts.com
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Some landowners rate it highly but for di˝ erent reasons, and we seem to have no common understanding of why it matters or how to achieve it in New Zealand under our di˝ ering land uses. Biodiversity is just a fancy term for variety. And the more variety we have in plants and animal species, then the better o˝ we are. These ecosystems ensure natural sustainability for all life forms. This diversity of systems gives all land users more ˛ exibility and adaptive responses to challenges such as climate
change, or disease, or where markets have suddenly changed. Forest ecosystems are worth far more than just the value of their wood. Their biodiversity and forest ecosystems are increasingly recognised in New Zealand for providing services that include climate change mitigation, habitats for native species, recreation, improved water quality, avoided sedimentation and ˛ ood control. Pine forests are measured with far more biodiversity than either pasture or horticultural land with the added beneÿ t of doing it fast. Birds do not much care what habitat you provide but would prefer a closed canopy forest in 15 years rather than 50, and this is how long many planted natives will take to catch up with pine, with the issue of no timber crop at the end.
Most forest owners in New Zealand are registered and must comply with the rules governing the FSC system. (Forest Stewardship Council) This rigorous international organization gives our New Zealand timber an endorsement that it is produced from forests meeting many measured criteria, and biodiversity levels
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is one of them. To meet FSC standards there are regular audits, and most forestry companies now hire dedicated sta˝ to keep track of the huge number of requirements for this process in order to keep their accreditation as many markets now demand this overseas. For forestry, biodiversity is not just a “nice to have”, it’s
a necessity to meet market requirements and a longstudied mechanism in pine forests that have been around in New Zealand for nearly 180 years, so we care very much as this measurable can mean the stamp of approval for our timber and hence, more proÿ t, at the top of the list of beneÿ ts that production forests will leave long-term for the landscape.
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30 FEATURE SUPPLEMENT
Thursday, August 18, 2022 Wairarapa Times-Age
FEATURE SUPPLEMENT 31
www.age.co.nz Thursday, August 18, 2022
FORESTRY IN WAIRARAPA Marcus Musson. Director Forest360 Last month I made the forces in protesting local and comment that there was central governments which some light at the end of the has resulted in the president’s tunnel regarding increases in o° ce calling on local o° cials export log pricing. It appears to ensure these projects are that the tunnel is quite long completed and pressure and, although we have had a going on State owned banks modest lift in pricing of around to ÿ nance the completion. $10/JAS on average, and we In addition, a report by S&P are reasonably conÿ dent that Global Ratings highlights the light isn’t a train, we’re not the expectation that China yet sure exactly what the house prices will fall as much light is. as 7% and sales will drop by 28 to 33 percent in 2022. This The underlying economics is all a bit untidy with the of the Chinese construction Communist Party elections industry are about as shaky in coming months but does as Robertsons ‘cost of living show the level of pressure that payment’ and the news homeowners are feeling in seemingly keeps getting China at present. worse. The mortgage boycott by owners of uncompleted Throw into the mix the US apartments in the Evergrande House Speaker, Nancy Pelosi’s debarkle has sent shockwaves one-woman crusade to Taiwan through the China Communist last week to basically ˛ ick Party (CCP). The issue has been the bird at Beijing on behalf the cessation of construction of Uncle Sam and the CCP is work on these projects as the probably losing its sense of Evergrande company wades its humour. This is very unlikely way through ÿ nancial turmoil. to do anything but further Mortgage holders have joined destabilise an already very
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Outlook better... But not great for log exports.
movements not seen before, roads blown out and continual ˛ ooding and slips from land that is now super-saturated. In many of these forests we are having to completely change our way of thinking in terms of managing for 50-year rain events once a month.
Export A Grade AWG Price ($/JAS) A Grade sales price $NZ/JAS AWG
Log Market Update -
Period unstable situation. The old theory that ‘if you are going to kick a tiger in the backside, you’d better have a good plan for dealing with its teeth’ comes to mind here and I’m not sure Pelosi, the third most powerful politician in the US, had completely ÿ gured out the teeth plan. Anything that increases tensions between China and the West is not likely to be positive for our exports in the medium term.
non-existent. One of the bigger issues in recent months has been vessel wait times in NZ ports which has added as much as $NZ18/m3 in cost. As supply drops and covid absenteeism tails o˝ in port operations, vessels are getting turned around faster resulting in lower freight rates and, in turn, increased at wharf gate (AWG) prices. There seems to be a reasonable amount of optimism amongst exporters in terms of pricing for the next quarter, which is encouraging, however we are unlikely to see a repeat of 2021 price spike.
On the positive side, the log inventory position is slowly reducing in China as supply drops out of NZ, demand is stable but not yet increasing and global supply is almost
NZ supply isn’t likely to swing back into action for a while yet
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as the current A grade price of around $125/m3 isn’t going really going to set a forest owners’ pants on ÿ re, especially with the additional cost of fuel still taking a large bite out of the net return cake. And it’s wet, really wet. Winter is always a good excuse to complain about the weather, but this winter has been especially bad. It was perversely encouraging to hear the media report that we have just had the wettest July on record which made us feel better that our whining about the rain has been justiÿ ed. We are seeing signiÿ cant damage around many forests with mass land
WH
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sniwoodcouncil@gmail.com
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Carbon prices jumped back up over $80/NZU in mid-July following the governments’ proposed changes to the NZU auction price parameters. At the $80/NZU level, this gives around $2,200/ha/year in revenue on a carbon regime which gives some signiÿ cant optionality to farmers who have areas of marginal land. James Shaw has buckled under pressure from Iwi groups around the inclusion of exotics in the permanent carbon scheme and now radiata is back on the table as a permanent carbon species. Maybe the reality has set in that trying to establish native carbon forests at large scale in place of exotics is about as easy as holding onto the green party leadership. Domestic demand for pruned
and unpruned sawlogs remains buoyant. Several mills, especially those that rely heavily on private supply, are sailing close to the wind in terms of log supply. This isn’t a factor of the logs being exported, moreover a result of the signiÿ cant drop in harvest levels. Demand for framing lumber continues to be very strong around the country, however, pruned mills are signaling a reasonable reduction in clearwood demand, speciÿ cally from the states, which supports the media reports of a sharp slowdown in residential construction in the USA due to spiraling construction costs (sound familiar?). So, all in all, August is a bit more positive than July – not that that would be hard. Summer is creeping closer by the day and markets are looking less negative. The light at the end of the tunnel is still shining, lets hope its Jennifer Anniston with a spotlight not Nancy Pelosi with a lit stick of dynamite.
ANYONE CAN APPLY. ARE YOU: • Enrolling in full time forestry tertiary study - or • Planning on enrolling for 2023? • An employee within the industry who aspires to further training; to improve their skills, knowledge and value to the employer For more information visit https://growmeforestry.co.nz/#scholarships or contact Erica Kinder E sniwoodcouncil@gmail.com P 027 329 0498
APPLICATIONS CLOSE OCTOBER 2022
The Southern North Island Wood Council provides a collective voice for the forestry sector in Taranaki, Whanganui, Manawatu, Wairarapa, Tararua and Wellington. Members have a common interest in ensuring the long-term success of the sector. Membership is open to any company or individual with an interest in the local wood industry. Erica Kinder, SNI Wood Council CEO, can be contacted for more information.
sniwoodcouncil@gmail.com 0273 290 498 growmeforestry.co.nz /www.sniwoodcouncil.co.nz