Friday Offcuts – 20 May 2011
Click to Subscribe - It's FREE! Tasmanian forestry operations have again been in the news this week – well, more so than normal. One of the major parties to negotiating the forestry deal for the State has just walked away from the table because of the lack of progress and commitment by both the federal and state Governments. As we pointed out last week, the failure of the federal budget to include funds for timber industry reform was also said to have played a major role in the decision.The collapse of the talks could end the industry's hopes of a federally funded restructure package. The conservationists' hopes of a generational win for forest protection is also on the line. It may well be posturing on the part of The Wilderness Society but any progress on reaching a deal is contingent on all of the original parties reaching a final agreement. The Tasmanian State Government also announced this week that a strategic review is going to be carried out on Forestry Tasmania. The intention is to provide recommendations on potential structures and future operation of the Government Business Enterprise. Forestry Tasmania’s also starting work on modelling options for the sector's future with the project expected to be completed by next month (see stories below). Finally, a special thank you to all our advertisers and supporters. You'll notice in this week's issue there continues to be a large number of Jobs, Used Equipment, Expressions of Interest and Tenders. Feedback from advertisers is very clear - advertising is paying huge dividends. Offcuts readers are also telling us just how important these weekly updates are for keeping them informed on staff movements and job opportunities that have come up right across the Australasian forestry sector. For further details on options available for advertising, click here.
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BNZ Technology Clinics for forestry industry
As part of New Zealand’s Forest Industries 2011 event in Rotorua, a comprehensive series of 14 Technology Clinics will be running at the Energy Events Centre on Monday 6 and Tuesday 7 September. The wide-ranging series of practical and independent clinics will showcase leading Australasian and international technology providers.They will be covering every facet of the forestry sector, from new tools for improving efficiencies in forest management through to the very latest in timber design, construction and building practices. The full programme for the two days of BNZ Technology Clinics can be downloaded here. Since 1990, 'Forest industries Exhibitions' have been held every four years in Rotorua. As part of these larger forestry shows, the Forest Industry Engineering Association (FIEA), the leading provider of technology related information for Australasian forest products companies has run a series of short one-hour clinics. Back by popular demand, 14 innovative one hour technology clinics, including two longer lunchtime sessions, have been set up for FI2011. The BNZ Technology Clinics will complement the other activities planned at Energy Events Centre in Rotorua including the three day PF Olsen NZ Forest Expo 2011 and a one-day BNZ Forest Industries conference. They will enable those attending FI2011 to update themselves on the very latest tools and technologies from across the forestry sector. Full details on the clinics can now be found on www.forestevents.co.nz. Forestry key to NZ’s Emissions Trading SchemeOf the 30 plus Emissions Trading Schemes currently operating around the world, New Zealand’s ETS is leading the way with its close integration to the forestry sector. The NZ forestry estate is critical for New Zealand to meet its emissions targets, under the Kyoto Protocol. While it’s still early days, two recent studies, the Greenhouse Gas Inventory Position Report and the Projected Net Position Report, both showed improvements to New Zealand’s ability to meet its Kyoto commitments."These reports show the ETS working effectively in the forestry sector with deforestation ending when the scheme took effect in 2008. New plantings of 1900 hectares were achieved in 2008, 4000 hectares in 2009, 6000 hectares in 2010, with projections of 8000 in 2011 and 10,000 in 2012," Climate Change Minister Nick Smith recently. More >> Pacific forestry professionals to work closer togetherDelegates to the 7th ANZIF Conference have agreed that forestry professionals in the Pacific region will work closer together on such matters as promotion and advocacy for the production and use of timber and other forest products, the sustainable management of forests and the need for greater professional forestry input into forest policies in the region.ANZIF is the four-yearly joint conference between the New Zealand Institute of Forestry (NZIF) and the Institute of Foresters of Australia (IFA). The 2011 conference, held during the United Nations International Year of Forests, included participation by the Commonwealth Forestry Association (CFA) and forestry professionals from the wider Pacific region. The conference called for greater support for forestry professionals in smaller Pacific countries from the NZIF, IFA and CFA. “During the conference steps were taken to initiate a network of forestry professionals to increase engagement with our Pacific neighbours and to investigate ways in which the NZIF and IFA might facilitate exchanges of personnel and experience and promote the use of professional standards including codes of ethics” said Dr Andrew McEwen, President of the NZIF. “It is also a concern that governments throughout the region, including Australia and New Zealand, have reduced the role of professional forestry advisers, despite the importance of forests in contributing to carbon capture and storage”, said Dr Peter Volker, President of the IFA. “Our Pacific neighbours are particularly vulnerable to climate change impacts as a result of our domestic forest policies,” he added. Tasmanian forest deal now in doubtThe Australian reported this week that a key green group, The Wilderness Society, is suspending its involvement after a year of talks and despite significant progress, in the historic negotiations to end decades of conflict over Tasmania's forests. The group is blaming a "lack of engagement" in the forestry peace talks by the Gillard government.The decision appears a high-stakes gamble aimed at pushing governments to commit political and financial capital to a deal to restructure the timber industry and protect 570,000ha of forests. The Gillard government was urging TWS to reconsider its decision, insisting Canberra remained committed to facilitating a lasting peace deal for "jobs and conservation". CFMEU spokeswoman Jane Calvert said she could understand the motivations behind the decision made by The Wilderness Society. "We don't agree with The Wilderness Society's response to the lack of engagement by government, but we share their frustration," she said. "It's time for governments to step in and lead this process or risk seeing the whole lot unravel very quickly." Most key timber, union and conservation groups vowed to continue the process, but conceded a final deal would not stick without TWS. BNZ Carbon News With 31 May being the final date for compliance buying for New Zealand based emitters, many market participants have been expecting the NZU price to rise in the last few weeks. However, it appears that emitters brought their units earlier in the year as demand has been thin and the price has drifted lower finishing at NZ$20.05. An estimated 255,000 NZUs changed hands over the last week, 75,000 fewer than the prior week. Most of the buyers in the market now are looking to cover 2011 emissions so will not need to surrender units until 31 May 2012, further lowering demand. Reports from brokers also indicate demand is low and supply will only come to market if the price rises above current levels. The NZU price has also been impacted by offshore markets, all of which have reported lower carbon prices on very low volume. The Regional Greenhouse Gas Initiative (RGGI) scheme that is operating on the East Cost of America did not report any trades last week. Californian carbon allowance units (CCAs) did not trade either. In Europe, EURs closed at €16.68 ($30.34) after trading as high as €17.30 ($31.47) at the beginning of the month. This is in the face of rising crude oil and natural gas prices and lower coal prices, all of which generally point to higher EUR prices. Political developments have also been modest. There have been no clear signals from the German government about whether it intends to phase out older nuclear plants. If they do choose to switch from nuclear power to a more emissions intensive form of electricity generation, demand for EUAs and CERs are likely to increase. Australia is making some progress in advancing the CPRS (their equivalent of the NZ ETS). They are expected to unveil a fixed carbon price of AS15 - A$30 moving to a full trading scheme at some stage in 3 - 5 years. The latest government projections show that 2020 Australian greenhouse gas emissions are likely to be 24% above 2000 levels, well above the target of a 5% increase. Emissions from LNG are a considerable part of this increase. Total LNG emissions could be twice the 27 million tpy produced by coal. Although clean to burn, CO2 is emitted during the extraction and chilling process. Coal is the opposite, there are some emissions from extraction but most occur on combustion. If Australia enters into an emission trading scheme and their trade partners, China and India don’t, there will be a perverse incentive at a private level for Australia to extract less LNG and more coal.
Work on options for Tasmania’s forestry industryBoth sides of Tasmania’s forest peace talks welcomed the announcement that Forestry Tasmania would start modelling options for the sector's future. But industry and environmental organisations were also united on the need for an immediate federal government intervention to help the sector.Forestry Tasmania will test the impact of scenarios that include the environmental groups' push to conserve more than 500,000 hectares of forest as well as industry's proposal that more than 450,000 cubic metres of available resource was needed for a viable industry. Industry and environmental groups said that they were deeply concerned that the announcement was the first action since independent facilitator Bill Kelty handed his interim report to the state and federal governments nearly two months ago. Mr Kelty said that Forestry Tasmania had been officially provided with the modelling work from both sides of the talks and that the $100,000 modelling had to be completed by next month. It would be supervised by an independent team led by Southern Cross University Professor Jerry Vanclay. IFA announce recipients of the N.W. Jolly MedalThe IFA President, Dr Peter Volker, announced that two worthy recipients would be honoured in 2011 with the awarding of the N.W. Jolly Medal. The N.W. Jolly Medal is the Institute of Foresters of Australia’s highest and most prestigious honour for outstanding service to the profession of forestry in Australia.In making the announcement, Dr Volker congratulated Mr Robert L Newman OAM and Dr David Flinn and acknowledged the invaluable contribution that both recipients have made throughout their careers as professional foresters. ‘David’s career spans over 45 years and Roberts career over 60. These two men have dedicated their forestry careers to research and practical management in government, private and international arenas.’ ‘Both recipients have shown a remarkable contribution to forestry and continue to provide great insights into the strengths and weaknesses of the industry and the profession. Whilst these two professionals have worked in complimentary areas of expertise, together they respectfully represent scientific and management advancements seen in Australia.’ Dr Volker said when making the announcement of the prestigious award. The award to Robert and David recognises that science, research and how this translates into practical implementation are critically important aspects for the achievement of sustainable forestry and a sustainable and competitive forest industry – something that foresters have always strongly advocated and worked for. The respective awarding ceremonies will be held later in the year. UK emissions targets ramped up to 50%Britain on Tuesday unveiled plans to cut its greenhouse-gas emissions by 50 per cent from 1990 levels by 2025, ramping up pressure on the European Union to increase its target. The new target is a big jump forward for Britain in its carbon-cutting ambitions and puts it far head of the EU as a whole, which has committed to a 20-per-cent cut in carbon emissions by 2020 compared with 1990 levels. Britain is among the members of the 27-nation bloc, along with France and Germany that have been pushing for the target to be hiked to 30 per cent.More >> Who's interested in Gunn's Triabunna site?Media speculation is alive and well in Tasmania about who is going to be bidding for Gunn's Triabunna site which has been temporarily closed due to low export demand for native woodchips. Gunn's are adamant, as they should be - being a public company - that the sale will take place on commercial basis. Forest industry supporters are hoping for a white knight in the form of Forestry Tasmania, who are owed money by Gunns.Others are speculating that the environmental industry or a tourism-based consortium is somehow going to bid for the site which has the dual attraction of being a deep water port (good for cruise ships) as well as already being used for water-based tourism activities including local island trips. Along the line, the rumours have linked Jan Cameron (ex- Kathmandu owner) to a wider environmental-oriented investment group that is chipping in to buy the place. Whatever happens there will be great interest from all parties at the final outcome. Right now it is also causing political strife among Labour and the Greens in Tasmanian political circles. The Triabunna woodchip mill has, until now, been a crucial financial part of the Tasmania wood supply value chain. Industry players are concerned if it gets sold to a non-forest industry player. Ocean Freight Index updateThe Baltic Supramax Index (BSI) closed on Monday at 1393 points, a decrease of 1% or 16 points since April's report.The BSI (Baltic Supramax Index), published by the Baltic Exchange, is the weighted average on 5 major time-charter routes. It is based on a 52,454 mt bulk carrier carrying commodities such as timber.
(Source: Cotzias Shipping) Strategic review of Forestry Tasmania announced The State Government today announced a strategic review of Forestry Tasmania to help the business adapt to the rapidly changing forest industry. The Premier and Treasurer, Lara Giddings, said tenders would be sought for organisations to undertake an independent review of the Government Business Enterprise and provide recommendations on potential future structures, governance and business models.“Forestry Tasmania is an integral part of our timber industry, which means that as the industry adapts to changes in world markets and forest practices, the business must also adapt for the future,” Ms Giddings said. Ms Giddings said the review would be run in parallel to the on-going discussions in the Statement of Principles process. “Regardless of whether agreement can be reached in the Statement of Principles process, we recognise that inevitable changes in the industry, driven by market forces, will have a significant impact on the current operations of Forestry Tasmania.” The Minister for Energy and Resources, Bryan Green, said the forest business had been exposed to significant international and domestic market volatility in recent years. “Forestry Tasmania operates in a very complex market and industry environment,” Mr Green said. “Over the past few years, Forestry Tasmania has been adversely affected by the large decline in the market for export pulpwood, exacerbated by the severe contraction in the Japanese economy and the recent strength of the Australian dollar. “This review is about ensuring that we have the best business model to deal with these challenges into the future. “Throughout this process, our focus will be on maintaining a strong and viable forest sector that maximises job opportunities for Tasmanians.” Fierce competition over world's wood supplyThe demand for some types of paper, like newsprint and other printing and writing paper will decrease in the next decade but the many other uses for wood fibre will mean dramatic increases in global demand overall, according to a new report from PwC.PwC's Canadian Forest, Paper and Packaging Leader Bruce McIntyre says: "Companies from a diverse array of industries - energy, utilities, chemicals and potentially many more as biomaterials evolve - will compete with FPP companies for control of forests, or at least access to their fibre, and the best economic use of the resources they provide." As a result, demand will outpace supply and increasing competition for fibre will be a key factor of future supply chains. "The world's forests will make a reduced contribution to meeting our increasing needs for wood fibre," says McIntyre. "Many of these forests are economically inaccessible or are sensitive to disturbance. Instead, these forests are going to be valued for their conservation benefits and that will result in restrictions on industrial wood output." Wood fibre needs are increasingly being met from planted forests which currently cover approximately 272 million hectares or 7% of the world's total forest area. The World Business Council for Sustainable Development (WBCSD) estimates that the yield and harvest from planted forests, will need to increase threefold by 2050, with planted land-area increasing 60%. In 2005, there were already nearly 141 million ha of plantation forests globally, an increase of over 12.8 million ha compared to 2000. Brazil stands out as the world leader in forest plantation agriculture, with nearly 6 million ha of plantations producing significant amounts of fibre for the global market. Brazil's largest trading partner is now China, and large shipments of pulp are one reason for the increased demand. The report also finds that in North America and Europe, many of the existing mills simply won't be needed for newsprint or printing and writing paper. But increasing populations and wealth will mean more fibre is needed, regardless of the reduction in traditional paper use. In the EU for instance, 340-420 million cubic metres of woody biomass per year is forecast to be needed solely for energy purposes by 2020, if current government policies continue. That level of demand could lead to a forest fibre deficit of 200-260 million metres³ by 2020. Asia's emerging markets are also booming. In China and India, absolute demand for paper will still go up, although it won't increase as quickly as overall GDP growth. China in particular has a large fibre deficit, so pressure to secure access will grow in order to achieve its 2020 goal of 20 million ha for additional woodland planting to fuel bioenergy projects. In 2009, China imported over 100 million metres³ on a roundwood equivalent basis - roughly as much as Canada's entire timber harvest in that year. Plantations have already faced a lot of criticism, though, for everything from replacing natural forests with plantations, to displacement of local peoples, to accusations that they have damaged local water tables. "We believe that plantations still represent the single best opportunity to meet increased demand for forest products without damaging ecosystems, provided planting is done responsibly and balanced with appropriate conservation programs," says McIntyre. New methods of accessing available fibre may emerge in response to the growing pressures. PwC sees international fibre exchanges and the emergence of a new biomass aggregation industry as two possibilities, but there may be others as well. "The focus will shift from accessing fibre to using fibre more efficiently. There will be viable alternatives to woody biomass, although land availability may be a limiting factor," says McIntyre. "Technologies can help, but those businesses that control, or have secure access to competitive sources of fibre will be the best positioned for growth." For more information, and to read the full report, entitled "Growing the Future", please visit www.pwc.com Jobs
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...and one to end the week on...Australian customs
One more from a Kiwi reader. Brian, a recently redundant NZ'er decided to give Aussie a crack, and headed over to Australia, landing in Sydney. He went up to the customs counter, and was eventually called forward by a smiling Australian Customs Officer. And on that note, have a great weekend. Cheers. Brand PartnersOur Partners & Sponsors Friday Offcuts is made possible through the generous support of the following companies.
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