Wood Energy: NZ’s strategic hedge against global instability

Friday 13 Mar 2026

 
Volatility in global LNG markets and renewed instability across the Middle East are driving sharp increases in international fuel prices and raising real concerns about New Zealand’s future energy costs for business. With LNG spot prices spiking and shipping routes facing disruption, New Zealand’s reliance on imported fuels is becoming an increasingly expensive strategic risk.

Brian Cox executive officer of the Bioenergy Associations says, “the solution is already in our backyard: wood energy, a proven, renewable fuel that is significantly cheaper and far more stable in price than imported gas”.

Wood Energy: Lower Cost, Lower Risk

New Zealand’s wood fuel sector—built on forestry residues, processing offcuts, and sustainably managed plantations—now delivers some of the lowest cost heat energy in the country. Across industrial users, wood energy typically sits well below the predicted cost of LNG, and unlike global fuels, wood energy pricing is local, predictable, and insulated from geopolitical shocks.

Key advantages include:
  • Lower delivered energy cost — wood fuels consistently undercut LNG on a $/GJ basis, at around $16/Gj, even before carbon pricing. LNG is likely to cost $40-$80/GJ retail.
  • Price stability — Because wood energy is from residues of the existing wood industry domestic biomass supply chains avoid the extreme volatility seen in global gas markets.
  • No new infrastructure needs to be built – the infrastructure for growing and recovery the biomass resource is already provided by the forestry and wood processing activities.
  • NZ Energy security — wood energy production is local, renewable, and not exposed to international conflict or shipping disruption. Every region can provide biomass.
  • Regional economic value — revenue and jobs stay in New Zealand’s, wood manufacturing, engineering, forestry and transport sectors.
A Strategic Hedge in an Uncertain World

With LNG markets tightening and Middle East tensions escalating, New Zealand faces rising exposure to global energy shocks. Wood energy offers a practical, scalable “made in NZ” hedge—providing firm, 24x7 dispatchable heat for industry at a materially lower cost than imported fuels.

The sector is ready to expand. With targeted investment and clear policy settings, New Zealand can accelerate the shift from fossil fuels to domestic bioenergy, strengthening both economic resilience and climate performance.

A Call for Action

As global instability grows, New Zealand must prioritise energy options that are affordable, reliable, and under our control. Wood energy meets all three tests. It is time to recognise it not just as a renewable fuel, but as a strategic economic advantage.

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Source: Bioenergy Association of New Zealand



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