Friday Offcuts – 22 July 2011
Click to Subscribe - It's FREE! The last couple of years for the Tasmanian timber industry can best be described as tumultuous. The last week or so though has been one of the most bizarre yet. Last week the State’s largest timber company, Gunns Ltd, decided to sell the Triabunna woodchip mill for AU$10 million. Instead of accepting an earlier offer of AU$16 million from another timber company, FibrePlus, the mill was sold to two environmentalists, Jan Cameron and Graeme Wood. It’s no secret that they’re planning on transforming the site into a tourist hub.The new owners are standing by plans to close the mill within three to five years, but said the timeframe was open for discussion, as were the conditions under which the mill will be operating. The timber industry and the Premier have already held talks and are pushing for the mill to stay open until at least 2027 to honour existing timber contracts. They’ve warned that if the mill is closed that the entire native forest logging industry in southern Tasmania could shut down. Adding to the debate, the timber industry says it could tear up the historic peace deal for Tasmania's forests unless the new owners agree to keep it open for far longer than they’ve suggested. To add to the sale drama, it appears that the Tasmanian timber industry is now going to have to negotiate its future with a man who spent 25 years trying to shut it down. Former Wilderness Society chief Alec Marr has been appointed GM of the new company that’s just bought the mill. Mr Marr reportedly has been a wily campaigner, setting a tree-sitting record of 16 days to keep bulldozers out of native forests in Farmhouse Creek back in 1986 and has helped to masterminded a campaign that’s forced Gunns to exit from native forest logging. The writing’s on the wall. Premier Lara Giddings came up with the quote of the week. In reference to the Triabunna sale she said, "you do have to ask the question in relation to this deal - why do vegetarians want to buy an abattoir?" Other news this week is dominated by carbon forestry; details from last week’s inaugural carbon forestry event in Auckland, results from the first study of its kind showing forests are playing a much larger role than first thought in combatting climate change and we have the forestry industry’s take on the Australian Government’s Carbon Price Scheme.
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New wood products on the wayPlain, genuine timber is still king of forest and wood processing, but for how much longer?An intriguing series of presentations at the BNZ Tech Clinics to be held in conjunction with the PF Olsen Forest Industries Expo 2011 in Rotorua in September will look at new and emerging products. LVL is already in use in construction and CLT is following closely, with Australasia’s first cross-laminated timber manufacturing plant due to open in Nelson late this year or early in 2012. Next up could be increased use of wood plastic composites and the development of wood hardening technologies to transform plantation-grown softwoods into viable competitors for hardwoods. One Tech Clinic will see Christchurch consultant Johann Betz and Robin Jack, managing director of W&R Jack, outline how CLT is ready to revolutionise construction small to medium buildings. In a second clinic, titled Emerging Wood Products, Mark Smith, Director of Smith Railey Consulting, will review progress towards large-scale industrial application of wood modification technologies to make radiata pine to make it harder, more stable and less prone to decay. In the same clinic Scion Business Development Manager Jeremy Warnes will outline the latest developments in wood plastic composites, covering the characteristic, applications and markets for these new materials. One question that he will raise is whether these composites are competition or complementary products to wood. To register for this Tech Clinic go to www.fi2011.co.nz Tasmania's forestry future up in the airThe sale of Triabunna's woodchip mill on Tasmania's east coast was covered in last week’s issue. The sale to conservation-minded entrepreneurs Graeme Wood and Jan Cameron has been, as expected, a huge shock for many in the East Coast town as well as the Tasmanian timber industry. Sawmillers and others have warned that if southern Tasmania's only woodchip mill is closed and they cannot export timber residue through Triabunna, they might go out of business.The two purchased the mill from Gunns for AU$10 million on Wednesday last week and plan to develop the site for vineyards and tourism, potentially including a marina and cruise ship terminal. But they have agreed to keep the mill open for three to five years to allow the industry time to adapt. To add to the timber industry’s angst, former Wilderness Society chief Alec Marr has just been appointed General Manager of the company that bought the woodchip mill. One of Mr Marr's first tasks as general manager of Triabunna Investments is to negotiate with pro-logging Premier Lara Giddings and the industry on exactly how long the mill stays open and under what conditions. Wood processing head acoustics successful
The long-awaited Hitman PH330 processing head acoustic optimisation system, from Christchurch-based Fibre-gen Ltd, has moved a significant step forward with the completion of the trials both in forests in West Argyll, Scotland and Northland, New Zealand. The world-leading Hitman PH330 system allows a processing head to take acoustic soundings of a stem to test its stiffness prior to making log length cutting decisions. The head then makes a log according to specifications entered into the software that manages the system, enabling a logging crew to precisely make logs to the specific log specifications of a mill. “Both of these large trials have been successful and we are now about to install our first production system for a major US player,” says Nigel Sharplin, Sales and Marketing Director of Fibre-gen. Effectively, the PH330 takes the technology of the ST300 and inserts it into a harvesting head to automate log making decisions. A the two probes are attached to the processing head – Waratah 626 and 624 configurations have been developed – and these are inserted into the stem ahead of the log making decision, starting with the butt and progressing towards the top of the felled tree. Prior to each cut, an acoustic signal is measured and if the variation (stiffness) is greater than the predicted log grade, it will drop back to a lower grade. Current computerised optimisation systems used on processing heads only measure the taper of the stem and integrate this with the sweep and knot information fed into the system by the operator, to determine what grade of log to make. Mr Sharplin says the ability of the Hitman PH330 to read the stiffness of a stem prior to making a cutting decision is the next step to complete optimisation, and its application on a processor head is a world first. For full details on the story and link to study, check out the latest R&D Works Newsletter.  BNZ Carbon News Firstly, thanks to all that attended the Carbon Forestry 2011 conference last week in Auckland. This article is being written with the benefit of two days of intense discussion from all areas of carbon forestry. The amount of research and initiative provided from economists, politicians, forestry analysts and analysts from emitters provided a balanced framework for discussion and debate. This article will focus solely on the recently introduced Carbon Pricing Mechanism in Australia. This will be a large driver of activity in our own market, so it is worth covering off the Scheme in detail in this months' article. The Scheme will impact on the New Zealand carbon market, in two ways. Firstly, our scheme was designed in conjunction with the Australian scheme - our EITE assistance was based off Australia, this means that to the extent that there are any major differences we can expect to see some level of convergence on the two schemes, of particular note is the differences in the two schemes' approach to forestry, which will be covered off later. Secondly, the price of A$23 is far higher than our own, it is our understanding that the Government and the review panel are intent on designing a scheme that fits in the middle of other national schemes, neither on the restrictive side or lenient side. At today's rates the Australian carbon price is nearly twice our own, so it is possible that changes may be made to bring the NZ carbon price in line with Australia's. The Australian Government plans to introduce the Carbon Pricing Mechanism legislation to Parliament during the Spring sitting in September with passage through both houses completed before the end of the year. Despite being a minority government, at this stage the Government appears to have the support of the independents and Greens. The Carbon Pricing Mechanism adopts a "tax and trade" model for emissions trading, with an initial 3 year fixed price period. For the first 3 years units can be purchased off the Government starting at A$23/t, increasing at 2.5% + CPI (pegged at 2.5%) per annum. Permits purchased at the fixed price cannot be traded or banked, they be automatically surrendered on the company's behalf and will not be able to be traded. Any free permits distributed during the same period can be traded, sold back to the government, or surrendered. Full Trading Scheme Period commences 1 July 2015. Annual emissions cap to be advised by the new Climate Change Authority. A price collar will exist until 2018-19. The floor will start at A$15 and increase at 4%+CPI p.a., the ceiling will be A$20 above the expected international price and increase at 5%+CPI p.a. Banking is allowed and borrowing is limited to 5% of annual liability. Only four of the six Kyoto gases will be covered; carbon dioxide, methane, nitrous oxide and perflourocarbons (from aluminium smelting). This leaves HFCs and sulphur hexafluoride to be managed via direct regulation as ozone depleting substances. Covered sectors will include stationary energy, industrial processes, fugitive emissions (emissions that escape through leakage - except those from decommissioned coal mines), and emissions from non-legacy waste (waste deposited after the Scheme starts). In addition to these covered sectors a proxy carbon price will be applied via separate legislation to certain business transport emissions, non-transport use of liquid and gaseous fuels and the two excluded Kyoto gases mentioned above. As previously announced agricultural and land sector emissions are excluded, this should come as positive news to our own agriculture sector, however, Hon. Nick Smith's comments in the opening speech of the Carbon Forestry 2011 conference indicate that he is undeterred by Australia's agriculture exemption. Also excluded, is allocation of units to all post-1989 forestry. Forestry allocation comes under the Carbon Forestry Initiative that (CFI) that was announced earlier in the year. The rules that apply are similar to our own PFSI rules and essentially prevent credits being issued to a traditional rotating forest. This lines up with the scepticism seen towards carbon forestry by other offshore markets, notably the European domestic carbon trading scheme that will not accept forestry units. The CFI legislation has already passed the lower house and will be considered at the next sitting of the Senate. Compensation to Australian emitters will come in four key areas, Emissions Intensive Trade Exposed (EITE) will receive 94.5% or 66% free permits depending on the level of emissions intensity. Examples of a 94.5% EITE include steel, glass and cement manufactures, 66% EITEs include plastics and chemicals manufactures. Non-trade exposed manufactures will have the benefit of a A$1.2bn Clean-tech fund, whereas Emissions intensive power Generators (i.e. brown coal plants) will have a A$5.5bn fund. Households will receive tax and welfare adjustments to help with increased costs. More than 50% of the revenue raised is to be used to compensate households. Approximately 90% of households will be compensated, with ~70% fully compensated and ~over 4m vulnerable families over-compensated. The assistance will be permanent and rise over time. The main mechanism for compensation is via an adjustment to the tax-free threshold, which will be increased from A$6,000 to A$18,200 in July next year, and then increase again to A$19,400 from July 2015. Pensioners and low income families will receive additional assistance via the welfare system. The Australian scheme is not accepting international units until the full trading scheme starts in 2015 and from 2015-2020 only 50% of an emitter's liability can be met with international permits. Furthermore from forestry perspective, unless rules are aligned with regards to accepting units from a traditional rotating forest the ability for Australia to accept units from a post-1989 forest appear limited. To cover off, the scheme has more similarities than differences with our own scheme, and despite the higher fixed price on carbon the coverage appears to be narrower and the compensation more generous. We would expect to see some alignment of the two schemes, however, this appears to be some way off at this stage. On the domestic pricing front, NZUs are currently trading at $16.85 with CERs trading slightly below at $16.65, with the $25 cap on NZUs there is no reason why CERs should trade at a discount to NZUs. The fall in the CER price comes on the back of the extraordinary events in the European economy, particularly in the regions of Portugal, Italy, Spain Greece and Italy. The economies of which have had the dual effect of lowering projected emissions and decreasing the EUR/NZD rate.
Carbon Forestry 2011 follow-upBoth the industry and media have reported on the success and information that came out of the inaugural Carbon Forestry 2011 event that ran in Auckland last week. In this week’s issue the BNZ Carbon News story provides full details released at the conference on the Carbon Pricing Scheme announced for Australia. Lizzie Chambers of Carbon Match who was involved in Carbon Forestry 2011 wrote an excellent article on New Zealand’s ETS and links to international schemes and carbon trading which appeared in last weekend’s “Sunday Star Times”. We also have a number of other stories in this week’s issue relating to the reaction from the forestry industry in Australia to and around the Australian announcement on “Carbon Sunday”.Around 250 key forestry, financial and investment professionals came together as part of the Carbon Forestry 2011 event to learn about the current state of carbon forestry and opportunities that exist nationally and internationally for this new asset class and for those trading or looking at getting into this emerging market. A selection of images from the event is shown above. Carbon Forestry 2011 delegates will be sent a user name and password to access the full presentations from last week’s event early next week. For those unable to make the Auckland event and who would like to access the presentations please make contact with shirley.pearce@fiea.org.nz Carbon price too low to grow Australian forestsThe Australian federal government's carbon scheme is failing to stimulate sufficient interest for forestry properties. Industry players were hoping a price on carbon could give rise to the value of plantations. Major swathes of timber plantations remain on the market and there is a steady build-up, the receivers of the failed Willmott Forests having pushed more than 50,000 hectares of radiata and oak to sale in the past fortnight, reports The Australian Financial Review.The oversupply of forestry assets has put pressure on prices, and cuts of up to 40 per cent of book value are being realised, starting with Hancock Natural Resources' purchase of the Queensland government's plantation for $600 million last year. Many industry players were hoping a carbon price would provide an incentive for investors to plant trees, which would push up demand for forestry properties. However, the exclusion of many forestry assets from the federal government's plan and the low price per tonne of carbon of AU$23 is proving to be a disincentive for investors. In the three days after the carbon price was announced, the share price of CO2 Group – a listed company which establishes carbon sinks – lost 25 per cent of its value. The Australian Forest Products Association has also criticised the government's carbon price – as detailed in another story this week. 1/3 of our fossil fuel emissions absorbed by forests
The world’s established forests remove 2.4 billion tonnes of carbon per year from the atmosphere – equivalent to one third of current annual fossil fuel emissions – according to new research published in the journal Science. This is the first time volumes of the greenhouse gas absorbed from the atmosphere by tropical, temperate and boreal forests have been so clearly identified.“This is really a timely breakthrough with which we can now clearly demonstrate how forests and changes in landscape such as wildfire or forest regrowth impact the removal or release of atmospheric carbon dioxide (CO2),” says CSIRO co-author of the paper: A Large and Persistent Carbon Sink in the World’s Forests, Dr Pep Canadell. “What this research tells us is that forests play a much larger role as carbon sinks as a result of tree growth and forest expansion.” Dr Canadell, who is also the Executive Director of the Global Carbon Project, said the international research team combined data from forest inventories, models and satellites to construct a profile of forests as major regulators of atmospheric CO2. In addition to the large carbon sink, he said scientists now know that deforestation is responsible for emitting 2.9 billion tonnes of carbon per year – an exchange that had not been known in the past because of a lack of data. For comparison, total emissions from fossil fuels are currently above eight billion tonnes of carbon per year. Dr Canadell said emissions from deforestation are much larger than previously thought, suggesting that the potential benefits of avoiding deforestation through the United Nations-backed Reduced Emissions from Deforestation and Degradation (REDD) scheme, are much larger than previously appreciated. The REDD scheme aims to formulate a financial value for the carbon stored in forests. Dr Canadell said a surprising finding was the large capacity of tropical forest re-growth to remove atmospheric CO2. Regrowth takes place following the end of logging and slash-and-burn land clearing projects. and, to a lesser extent, when new forest plantations are planted. “We estimate that tropical forest regrowth is removing an average of 1.6 billion tonnes of carbon per year. Unfortunately, some countries have not looked on forest regrowth as a component of REDD, and so are missing a very important opportunity to gain even further climate benefits from the conservation of forests. “Combining the uptake by established and forest re-growth plus emissions from deforestation, the world’s forests have a net effect on atmospheric CO2 equivalent to the removal of 1.1 billion tonnes of carbon every year. This work has been undertaken as part of the Australian Climate Change Science Program, funded jointly by the Department of Climate Change and Energy Efficiency, the Bureau of Meteorology and CSIRO. Hans Drielsma retiring from Forestry TasmaniaForestry Tasmania has lost its Executive General Manager, Dr Hans Drielsma, who has stepped and taken up retirement. Hans joined Forestry Tasmania some 15 years ago, following a six-year stint as Managing Director of Forests NSW. As Executive General Manager for the past five years, Hans has been responsible for FT’s scientific research program, planning, resources, business and environmental systems and information technology. Perhaps Hans’ most enduring legacy will be the role he played in developing the Australian Forestry Standard (AFS). Hans has put a lot of time into its development over the last ten or more years and will continue as a member of the AFS board. Forestry misses out in carbon announcementIn response to the announcement on Australia’s Carbon Price Scheme, Australia’s forest industry body, the Australian Forest Products Association (AFPA) said that forestry has been snubbed by the Government’s Clean Energy Future announcements. Allan Hansard, from AFPA, said that “the government has acknowledged that forestry is a carbon positive industry yet it has been ignored, and in some cases disadvantaged by the announcement".“Firstly, tree plantations that are grown for wood as well as carbon are excluded from the much lauded Carbon Farming Initiative (CFI) despite providing the greatest potential to soak up significant amounts of carbon dioxide from the atmosphere as well as providing much needed “home grown wood” and regional jobs. If commercial forestry was allowed to participate in the CFI it could sequester an additional 12 million tonnes of CO2 equivalent by 2020 and help fill the looming shortage of sawn timber in Australia. “Secondly, no renewable energy produced from native forest biomass - not even sawmill offcuts – will be eligible for renewable energy credits. This announcement has jeopardised several major projects which would have employed Australians in regional areas and created renewable energy to offset coal fired power generation. “Thirdly, the government has allocated almost AU$1 billion funding for “forest protection projects” which could see well managed production forests locked-up and weeds, pests and wildfires allowed to flourish. “The government has repeatedly stated that it is relying on science to underpin its decision to introduce the carbon price measures. Meanwhile, it is ignoring what leading scientists are saying on forests. For example, the IPCC’s Fourth Assessment report said “In the long term, a sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing annual sustained yield of timber, fibre or energy from the forest, will generate the largest sustained mitigation benefit.” “Industry can only assume that these announcements have been made to obtain agreement by the Greens and without a full understanding as to the effect these decisions will have on the future of Australia’s forest industry, regional jobs or indeed climate change. The AFPA will be seeking meetings with key Ministers and Government members of forestry electorates to seek changes to these decisions.” Log truck safety initiative set up in Australia
Minister for Primary Industries, Katrina Hodgkinson, has launched a new 1800 LOGHAUL number that will drive improvements in log truck driver safety and behaviour. The 1800 LOGHAUL number - was developed jointly by Forests NSW and the Forest Industry Council. “This number will allow other road users to phone a call centre with compliments or complaints about log truck activity,” Minister Hodgkinson said. Each log truck operated by contractors to Forests NSW will have a sign bearing the 1800 telephone number as well as an individual truck identification number. The program will begin in the Tumut region and then roll out across other Forests NSW areas. “Loghaul will gather data on driver behaviour and highlight positive driving as well as other safety areas that are causing concern to the public. Forests NSW is committed to improving all aspects of safety, and log truck driver behaviour is part of that process,” Ms Hodgkinson said. Contractors will conduct investigations into all complaints and use the outcomes to improve safety across their fleets. Calls from the public will go to an independent call centre where the date, time, location and incident details will be recorded, along with caller details and truck identification number. The details of callers will be kept confidential. Contractors will then be able to provide feedback to callers, if requested, as to the steps that have been taken to prevent the reoccurrence of the issue that is raised. “The final measure of success will be the reduction in vehicle accidents and an improved public perception of the industry,” Ms Hodgkinson said. New level set for timber engineering
Finnforest Kerto LVL is featuring in one of the world’s largest timber buildings. The Metropol Parasol in Seville in Spain forms a public space covering 11,000m².Designed by German architects Jurgen Mayer H, it actually comprises six timber parasol structures reaching up to 28m high. Mika Kallio, Finnforest head of Building Products, says the composite structure “sets a totally new level for timber engineering”. “It is perhaps the most complex ever built,” he said. “The extremely large dimensions involved, a three-dimensional load bearing system and creative geometrical forms have been great challenges for the use of wood and engineering skills.” The use of load-bearing Kerto LVL was made even more unusual, he added, by the process of post-curing using an epoxy resin, as well as application of a polyurethane spray coating. The structure has concrete foundations and lift towers and the load-bearing platform for the restaurant in the building 21.5m above the ground is steel and concrete. But the core of the building comprises 68-311mm thick Kerto-Q panels in an orthogonal grid with a spacing of 1.5x1.5m. The largest of the total of 3,400 wooden parts, comprising 2,500m³ of Kerto, measures 16.5m high by 3.5m wide and 140mm thick. On its various levels, the parasol houses an archaeological museum, a market hall and event space. The 300m² restaurant sits among the beams of the roof next to a public promenade giving panoramic views over Seville. Source: TTJ Australian forests information for schoolsForest and Wood Products Australia (FWPA) has launched www.Forestlearning.edu.au, a dedicated portal for forests and wood products teaching and learning resources for primary and secondary school teachers. This new website aims to provide easy access for forests and wood products educational information that is linked to the Australian curriculum and is part of FWPA’s education investment plan.ForestLearning.edu.au provides activities, resources and ideas for teachers to integrate forest education into their programs across a range of key learning areas within the Australian school curriculum and state and territory syllabi including science, biology, history, geography, mathematics, agriculture and technology. This new site includes: • A searchable database of over 100 currently downloadable resources; • Information on key learning themes and topics • Information on organising school visits or professional development for teachers; • Latest news and events; and • Glossary of terms and useful contacts and links to forestry organisations and their websites. Teachers and educators of years 3 to 12 in Australian schools are the primary audience for the website and a targeted marketing campaign will be implemented in July 2011. KCA continues investment in Australian manufacturing Kimberly Clark Australia has announced it would spend AU$65 million across its three factories in Albury, Ingleburn (Sydney) and Millicent, near Mount Gambier. This is a strong vote of confidence in the future of KCA’s Australian manufacturing presence. The investment includes:• $28 million to enable local manufacture of disposable pants at the company’s Ingleburn Mill; • $6.5 million at the Albury Mill expanding its capability to make innovative products as well as reduce carbon emissions; and • $30 million for a combined heat and power generation project greatly increasing energy efficiencies and significantly reducing greenhouse emissions for the Millicent Mill located in South Australia. Source: AFPA Canopy Carbon credit firm collapsesThe Age reported this week that a company specialising in forestry carbon credit projects in Asia, the Pacific Islands and Australia has folded. The Adelaide-based company, First Growth Funds collapsed on Monday after failing to secure a deal for additional funds. It was placed into administration by its major lender, Noble Investments Superannuation Fund.First Growth had huge ambitions for its business – predicting in 2009 that it would generate earnings before interest of AU$3.9 million by the end of 2010 from a series of carbon abatement projects across the region. Just last month it announced that First Growth Forests – a joint venture with Greencollar Group – had commenced the world’s first program to develop forestry carbon projects for the whole of a province in West Papua in Indonesia. It said at the time that 16 pilot projects were under development to sell credits into the global voluntary carbon markets. Through its wholly-owned subsidiary, First Growth Ventures, the company had a deal to provide project financing and development assistance to project developers operating in Indonesia, Asia and the South Pacific region. The immediate focus of the project was to develop forestry carbon credits from preserving rainforests in South East Asia, creating credits each year of the project's life. Jobs
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...and one to end the week on...blast from the past
One more for your Friday - corny - but clever. The Hospital Wing. When a panel of doctors was asked to vote on adding a new wing to their hospital, the Allergists voted to scratch it and the Dermatologists advised not to make any rash moves. The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the administration had a lot of nerve, and the Obstetricians felt they were all labouring under a misconception. The Ophthalmologists considered the idea short-sighted; the Pathologists yelled, 'Over my dead body', while the Paediatricians said, 'Oh, Grow up! The Psychiatrists thought the whole idea was madness, the Radiologists could see right through it and the Surgeons decided to wash their hands of the whole thing. The Internists thought it was a bitter pill to swallow, and the Plastic Surgeons said, 'This puts a whole new face on the matter.' The Podiatrists thought it was a step forward, but the Urologists felt the scheme wouldn't hold water. The Anaesthesiologists thought the whole idea was a gas and the Cardiologists didn't have the heart to say no. In the end, the Proctologists left the decision up to some a******* in administration.  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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