Friday Offcuts 19 November 2021
The result? Right now, another perfect storm. Reduced demand for logs and falling prices means harvesting crews and log transport operations in New Zealand are facing reduced production and an uncertain future as they move into the traditional Christmas shut-down. Export log price swings have always been cyclical. However, as the Forestry Industry Contractors Association commented this week, “this next hump is one out of the norm” and “we’ve never been here before”. The expectation is that the situation should improve after the lunar new year (mid-February 2022) but until then, support packages to help contractors through the downturn are currently being explored.
Linked to NZ log exports, we cover a story this week that looks again at the Environmental Protection Authority’s reassessment of methyl bromide. Fumigation of logs for export constitutes the bulk (92 per cent) of New Zealand’s methyl bromide use. “Stepped increases” are going to apply to recapture fumigant from containers and covered log stacks, starting from 1 January next year. Ship-hold fumigation is being banned one year later, from 1 January 1, 2023. And out of the port of Tauranga, the largest log vessel ever to load out of Australasia was completed on 10 November with over 60,000 m3 loaded entirely under deck. The Post Panamax vessels have no ships cranes and are only now possible utilising the new ISO Stevedoring Liebherr shore cranes that we reported on last week.
And from Australia this week, the story of the “lost trees of Hydrowood” have become part of the lore of Tasmania’s West Coast. Underwater logging of high value special timber species from the bottom of Lake Pieman has been ongoing since 2015. The extraction and efforts in sawing, drying, machining and marketing the timber have been well documented. As an extra for the consumer, a QR code and blockchain technology have just been added to confirm the authenticity of their Hyrdrowood purchase. It just adds to this already very unique “lake to lounge” story.
And finally, in the legislation space, New Zealand’s Environmental Protection Authority has initiated an application for a modified reassessment of two fungicides that are active ingredients in timber treatment formulations. Submissions are open until 16 December. And as part of the just completed COP26 in Glasgow, the NZ Government has announced that they’ll be rolling out a plan for a carbon neutral public sector by 2025. All new non-residential government buildings will be required to be climate friendly so the use of low carbon materials such as wood will be one of the real solutions for achieving reduced emissions from buildings. Details on both of these stories can be found in this week’s issue. And, that’s it for this week.
This week we have for you:
NZ harvesting crews feeling the pinchA dramatic drop in global log prices has impacted on operations in the East Coast region of New Zealand and some forestry crews face a lean Christmas until prices lift again and full production hopefully resumes.
Eastland Wood Council (EWC) chief executive Philip Hope said global economic factors could have major repercussions for the forestry industry while a prominent contractor said the industry was facing “a very bleak year-end. Right now, the forestry industry is dealing with the impacts of a log export crisis that has seen prices plummet,” Mr Hope said.
“The cost of shipping wood to China has almost trebled since January — the result of Covid, increased fuel prices and so on. The slowdown in the China economy extends to the construction industry.
As we speak, 10 percent of the global shipping fleet is sitting in the water off China waiting to discharge and incurring demurrage costs daily,” Mr Hope said.
“Many ports have been shut down due to Covid and the holiday season has added further to delays. These factors have resulted in significant increases to inventory costs and a drop in demand for wood.” Mr Hope said pundits expected the market to recover in the first quarter of 2022. “However, this is little comfort to the forestry industry, which includes everyone in the supply chain. Everyone is facing a very tough time.”
EWC has been in regular contact with member forestry companies and reached out to many contractors and industry stakeholders across Tairāwhiti to help them understand the challenges they face so EWC can help with solutions. “While member forestry companies are doing all they can to retain contractors, at the present time it is uneconomic to harvest, especially the smaller woodlots”.
“We are aware some contractors have received notice to finish harvesting operations, others have been placed on reduced harvest volumes and others have been given notice of an extended break over Christmas.”
In one example, a forestry contracting company with six crews in Tairāwhiti has gone above and beyond what most would do in such difficult times. “Two crews will stop on December 3, two others have been given notice to stop on December 3, but potentially could go until December 17, and two crews remain, but on 80 percent of their usual production — a month's shutdown for them from December 17 until January 17.”
OneFortyOne investing NZ$11m in Kaituna millOneFortyOne has committed to invest NZ$11 million dollars in its Kaituna Sawmill over the next three years.
General Manager of Kaituna Sawmill Tracy Goss said the NZ$11 million investment consists of three major projects to increase the sawmill’s drying and treating capacity.
“With an improvement in our processing capability onsite, it also means 20 less trucks on the road every month, reducing our emissions by nine per cent annually,” Mr Goss said.
“In the past 10 years the sawmill has achieved a 46% reduction in the site’s greenhouse gas emissions. A suite of environmental improvements has been made, from small to significant. A state-of-the-art Biomass Energy Centre and continuous drying kiln installed in 2016 has reduced the sawmill’s carbon footprint by 934 tonnes of carbon dioxide equivalents per year.
“Reducing our footprint by another 265 tonnes annually is significant and a great example of where actively deciding to monitor and invest in reducing our carbon footprint leads to better business and community outcomes. It’s an exciting project and it represents the first major capex investment from OneFortyOne since acquisition of Nelson Forests,” said Mr Goss.
Speaking at the announcement Regional MP Stuart Smith said: “I congratulate OneFortyOne and Kaituna Sawmill for making this significant investment in our region and in New Zealand’s timber industry which will increase supply and create local jobs.”
“The majority of the timber products will be consumed by the local building and construction industry.” The project is scheduled to begin in April 2022.
Forestry interest in biofuel opportunitiesThe increasing interest in using biomass instead of fossil fuels has finally woken up the New Zealand forestry and agricultural sectors says the Bioenergy Association in its recent newsletter.
Brian Cox, Executive Officer of the Association says “the opportunities for additional revenue from residuals as a fuel for stationary heat, as a feedstock for producing renewable gases, and as a feedstock for producing transport biofuels has finally woken up the forestry and agricultural sectors. There is an increasing and growing awareness of the opportunities for additional revenue from residuals and biomass that otherwise would be wasted or sold for a low financial return”.
“Recent enquiries from some manufacturers for supply of biomass fuel have resulted in a number of new forestry and agricultural interests coming forward. While many of these potential biomass suppliers have not previously been solid biofuel suppliers the increasing demand for biomass has got them interested in this market” says Brian Cox.
In some regions the total demand for biomass for stationary heat would be around 14% of their total plantation forest production so this new market is manageable and is also within the 15-20% of their production that is currently wasted. These volumes are easily achievable and can be additional to their existing business.”
“In agriculture a number of farmers are realising that they can use the 6-9% of their farm which is not productively used for the growing of biomass. These are the slopes of gullies, shelterbelts, riparian strips, and erosion control which can produce biomass that is suitable for processing into being a solid biofuel”. Biomass is available throughout the country so investment in distributed transport biofuel production facilities will occur near the sources of biomass. Some investors are also considering planting their own future sources of biomass.
With the expanding focus on future sources of biomass additional to existing land uses, plus new plantings with a view to future domestic uses, there is no doubt that there will be an on-going balance between demand and supply of biomass. “However, to ensure that having the right biomass in the right place, at the right time, will require good information from those who want biomass, to those who can supply biomass, right out to 2050. Communication between potential buyers and potential suppliers will be very important.”
The location and organised aggregation of woody bio fuels to meet the growing demand for industrial process heat users is a focus for the Residues to Revenues 2022 event that will be running for bio-fuel producers on 9-10 March 2022. Full details on the programme can be found on the event website.
Tracking timber from the lake to the loungeThe “lost trees of Hydrowood” have become a part of the lore of Tasmania’s West Coast. Lake Pieman was dammed in 1986, and since 2015 the “lost trees” from the lake floor have been cut, dried, and recreated into objects that can be enjoyed for a lifetime- from boats, homes, furniture, and homewares.
The story behind Hydrowood and its finite nature has made it a valuable addition to ‘Brand Tasmania’, with a pilot program funded by the Department of State Growth designed to protect its provenance. Hydrowood co-founder Andrew Morgan said Hydrowood’s Tasmanian story was the biggest part of its appeal and it needed to be protected.
“Everyone loves the story, they’re intrigued by it, they’re intrigued by the West Coast of Tasmania and its beauty,” Mr Morgan said. “The concept of salvaging timber out of a lake that’s been sitting there for 30 years, really does capture people’s imagination.”
Mr Morgan said Hydrowood comes from the “lake to the lounge”, and that effectively tracing its provenance would give consumers greater confidence. “Hydrowood is very much about the Tasmanian story, it’s about the provenance, it’s about the place,” he said. “It’s very strongly Tasmanian so we want to make sure that when our product goes to the world, the consumer has a level of confidence.”
Using a QR code and blockchain technology, the Tasmanian-origin tracing technology will allow consumers to confirm the authenticity of Hyrdrowood, with hopes to roll the technology out to other Tasmanian products.
Source: The Examiner
Changing landscape of forestry fumigationWhile the journey has been long and somewhat tortuous, an advocate for alternative fumigation of New Zealand’s export logs has welcomed a reassessed “road map” on the future use of methyl bromide.
The Decision-Making Committee of the Environmental Protection Authority recently announced what it calls a “comprehensive suite” of new rules for the toxic and ozone-depleting substance. Kade McConville, group director of Melbourne-based Draslovka Services Group, says the outcomes of the EPA reassessment “are now based on science over grandfather rights, and have categorically changed the landscape of fumigation in New Zealand”.
Draslovka is seeking to have ethanedinitrile, a “non ozone-depleter” developed by the company in the Czech Republic, registered with the EPA in New Zealand. Kade says he sees the EPA reassessment of methyl bromide as “justice for the environment and the communities which this substance has affected for decades”.
Dr Chris Hill, general manager of the EPA’s Hazardous Substances Group, says the decision sets a roadmap to full recapture of methyl bromide. “It provides a clear and structured pathway for industry to reduce the amount of methyl bromide emitted,” says Dr Hill.
Ship-hold fumigation will be banned from January 1, 2023. He says, ”stepped increases” will apply to the recapture of methyl bromide from containers and covered log stacks, starting from January 1, 2022. Revoking the approval for methyl bromide (banning it outright) was “not in the scope” of this reassessment, but Dr Hill says the decision provides for far more stringent controls on its use.
Kade McConville says the new rules will make it “increasingly difficult” to commercially use methyl bromide in New Zealand for the treatment of timber and logs for export. The most prominent of these changes is around buffer zone requirements – which are tied to recapture efficiencies - and subsequently air emissions, he says. “Any technically/chemically astute individual can tell you that fumigant recapture in a fumigation scenario is merely smoke and mirrors.”
The forestry industry had been given a 10-year deadline to stop using methyl bromide, but this expired last October and has since been subject to a number of extensions. Dr Hill says while methyl bromide use is being phased out globally, in New Zealand its use increased by 66 per cent between 2010 and 2019,” he says.
“We are currently out of step with most other countries which are turning away from this ozone-depleting substance. However, the combined controls imposed by this decision will result in methyl bromide emissions being reduced significantly over the next five years. The aim is also to disincentivise the use of this fumigant”.
"While the EPA would like to see methyl bromide use phased out as soon as possible, we acknowledge that this is the only biosecurity treatment that some key overseas markets are prepared to accept," says Dr Hill.
Meanwhile, Kade McConville believes an EPA decision on the Draslovka registration of EDN may not come until the end of the year. Following public consultation on a science memo and EPA staff report, he expects the Decision-Making Committee to call another public hearing on the matter which is being dealt with separately from the methyl bromide assessment.
Largest log vessel ever loaded in NZOn 10 November Pacific Forest Products Ltd (PFP) completed the loading of the largest log vessel ever to load from Australasia. The Conrad Oldendorff was chartered by PFP’s subsidiary South Pacific Shipping Ltd (SPS) from Oldendorff Carriers with the aim of creating new economies of scale through the port of Tauranga.
The Post Panamax vessels have no ships cranes and so are only now possible utilising the new ISO Stevedoring Liebherr shore cranes. The vessel is 230m long compared to the average logger of 180 m. Combined with a beam width of 38m this vessel loaded twice as much as a standard log vessel.
The cargo of over 60,000 m3 was loaded entirely underdeck and went smoother than expected – especially as this is the first time a vessel such as this has been seen in NZ. It was loaded with an average of 4 “gangs” (4 holds loaded at once) which is better than the standard port average.
Ian Leslie, Operations Manager for PFP, noted that the vessel needed the cooperation of the entire supply chain for it to become possible“. From the outset there was a lot of effort to get this project across the line - initially from the chartering brokers Braemar AMC, Oldendorff Carriers and SPS and then with Port of Tauranga and ISO.
Our major forest owner log suppliers were on board with production as they could see the benefits of a large single port loader vessel.” With the efficient and safe loading of the Conrad Oldendorff now completed it is likely that we will see more of these vessels loaded by PFP in the future at ports that have shore crane facilities.
Source: Pacific Forest Products Ltd
Hancock Forest Management NZ name changeHancock Forest Management NZ is changing its name to Manulife Investment Management Forest Management Ltd NZ (MFM NZ), or Manulife. The change represents a visual transition to align with their parent company Manulife Investment Management (MFM).
There are no changes to how the business will operate in New Zealand. The wider business strategy and investment decision-making processes will remain the same. The change also has no impact on jobs within the company, and staff have been notified of this change.
Managing Director Australasian Timberland Operations, Robert Green, says the rebranding signals an ongoing commitment to our future in New Zealand. The change has been taking place behind the scenes for 24- to 36- months, with consideration to how this could be rolled out across the global business. By aligning our capabilities, MFM NZ offers a strength few organisations can match, providing the company with a base to keep building upon moving forward.
The global business is headed by Christoph Schumacher, who recently joined Manulife Investment Management as Global Head of Real Assets, Private Markets. The role unites the firm’s real asset capabilities across real estate, infrastructure, timberland, and agriculture, all of which have been key drivers of diversification, offering sustainable and nature-based solutions and have a long history of helping to generate differentiated returns for their clients.
In New Zealand, Robert Green will remain in his role as Managing Director Australasian Timberland Operations, in addition to General Manager Kerry Ellem and our existing team. “We're excited about the future with Manulife – and we're confident our staff and various other stakeholders are too.” The visual rebrand takes effect from Monday 15 November.
Manulife Investment Management manages approximately 5.7 million acres of timberland across the United States, Canada, New Zealand, Australia, Brazil, and Chile. 520,000 acres of land being managed is in New Zealand. It also oversees approximately 400,000 acres of farmland and agriculture investments in major agricultural regions of the United States and in Canada, Chile, and Australia.
In New Zealand, the company has around 100 FTE employees. On any given day, the company works with up to 1,400 contractors in forests it manages.
New project to unlock softwood income streamEvaluating an opportunity that has the potential to meet growing demand for softwood timber products plus create an additional income stream for Northern Australia’s graziers is the focus of a new Cooperative Research Centre for Developing Northern Australia (CRCNA) research collaboration.
The three-year Silvopastoral trials for commercial pine systems in North Queensland project, led by Timber Queensland, brings together forestry and livestock production experts and environmental and carbon consultants to assess potentially transformational farming systems. Key research partners include the Queensland Department of Agriculture and Fisheries, CQUniversity, HQPlantations and CO2 Australia.
Given the high-level of innovation involved, the project has attracted a range of funding supporters including the CRCNA, Timber Queensland, HQPlantations and Forest and Wood Products Australia through its voluntary matching program. Timber Queensland’s CEO Mick Stephens said the project will assess the economic merits of combined grazing and commercial tree farming systems compared to traditional forestry and grazing only practices.
“There is a high likelihood these silvopastoralism systems can deliver higher net financial returns per hectare for suitable land types, while at the same time contributing to income diversification and lower overall carbon emissions, or even carbon neutral outcomes for the farming enterprise,” said Mr Stephens.
The project will measure and model the returns from field trials with cattle grazed in widely spaced commercial pine forests and compare the returns from carbon sequestration and combined timber and beef production returns with traditional grazing only activities on cleared farmland.
CRCNA CEO Anne Stünzner said this project builds on recommendations made in the CRCNA’s Northern Forest and forest products industry situational analysis, which aimed to deliver a pathway for realising forest industry potential in Northern Australia.
“The principals and benefits of silvopastoral systems are understood from overseas experience, to unlock the full productive potential for timber and beef we need to assess tree-pasture systems relevant to Northern Australia,” she said. In addition to technical field work and trials, the project team will work to keep the forestry and livestock industries up-to-date with key research findings to inform investors and landowners on the benefits of these novel systems.
Source: Timber Queensland
Seven young kiwis taking up higher level studyMore young New Zealander's are making forestry and wood-processing their future with seven more talented applicants joining the Ngā Karahipi Uru Rākau – Forestry Scholarship programme.
“It is fantastic to keep seeing young people embarking on their forestry career. The growth in the sector means more opportunities for highly skilled people due to research, innovation and increase mechanisation,” says Debbie Ward, Director, Business and Spatial Intelligence, Te Uru Rākau – New Zealand Forest Service.
“The scholarship programme offers students a pathway to higher-level study, where they gain the skills, expertise, and capabilities which the forestry and wood-processing sector needs now and into the future.”
The successful scholarship recipients for the 2022 academic year are: Paula Tucker Camano from Hamilton, Phoebe Naske from Gisborne, Stephen Thompson from Rotorua, Emma Plomp from Invercargill, Joe Falloon from Masterton, Tyler Rowe from Wellington, and Whanarua Edmonds from Pukehina.
The scholarship programme, now in its fourth year, aims to grow the capability of the forestry and wood-processing workforce and, aims to increase the number of those that identify as female and/or of Māori descent, encouraging greater diversity in the industry.
To date, 23 students throughout New Zealand have received scholarships since 2018, with the first students expected to complete their qualifications at the end of next year.
In addition to the existing Bachelor of Forestry Science and Bachelor of Forest Engineering degrees offered through the University of Canterbury, Te Uru Rākau – New Zealand Forest Service is also funding three new scholarships this year for the Diploma in Forest Management at Toi Ohomai Institute of Technology in the Bay of Plenty starting 2022.
“We are proud to be partnering with Toi Ohomai to offer these new scholarships which offer another pathway to a career and opportunities in forestry,” says Debbie Ward. “The diploma course covers a range of topics to prepare students for roles, including business planning, forest health and management, supply chain and harvesting, and operations management.”
Details of Scholarships:
• Students enrolling in a Bachelor of Forestry Science at the University of Canterbury receive NZ$8,000 a year for four years and are open to those who are Māori and/or identify as female and are a New Zealand citizen or have permanent residency.
• Students enrolling in a Bachelor of Engineering (Hons) in Forest Engineering at the University of Canterbury receive NZ$8,000 a year for four years and are open to all New Zealand citizens or those with permanent residency.
• Students enrolling in a Diploma in Forest Management at Toi Ohomai Institute of Technology receive NZ$6,500 a year for two years and are open to those who are Māori and/or identify as female and are a New Zealand citizen or have permanent residency.
The scholarships also include paid internships each summer of 10-12 weeks with Te Uru Rākau – New Zealand Forest Service or an appropriate forestry employer.
Zero-carbon timber apartments cheaper to buildBuilding a luxury apartment block from timber rather than concrete has kept more than a million kilograms of carbon dioxide out of the environment, a study has found. The timber also made the building cheaper and quicker to construct. Clearwater Quays is a five-storey apartment building nearing completion at Clearwater Resort in Christchurch, New Zealand.
It has been chosen as a test case to illustrate how engineered timber construction compares with concrete and steel. The test case is part of a public-private programme, called Mid-Rise Wood Construction, encouraging the use of New Zealand-engineered timber in mid-rise, prefabricated buildings.
The NZ$6.75 million programme – launched in 2018 by industry groups and the Ministry for Primary Industries (MPI) – estimates the construction method could earn the country NZ$330m annually by 2036. It calculates that the low-carbon construction at the Clearwater Quays block has been more than offset by the amount of carbon held in the timber. This has resulted in a zero-carbon building.
Phil Tomkins, the onsite construction manager for the project, said the construction industry and property developers were “looking for leadership” on reducing carbon. “There’s a tsunami of change coming in the industry. People are thinking, ‘what are we doing about climate change?’ There’s a really huge wave to look for alternatives to concrete and steel. We grow all this timber ourselves in New Zealand.”
Tomkins said the building will go up two-and-a-half months faster than with traditional apartment construction methods. Clearwater Quays uses a combination of laminated veneer lumber structural frames and curved glulam (glued laminated timber), and timber frame wall panels. A second building using the same construction method is planned alongside.
“We used to see two or three-storey timber buildings. Now it is eight or 10 or 12. These materials have been around for decades. But this has only taken off in the last two or three years.”
Climate Standards for new Govt BuildingsThe NZ Government is rolling out its plan for a carbon neutral public sector by 2025 by requiring that all new non-residential government buildings are climate friendly, Economic and Regional Development Minister Stuart Nash and Climate Change Minister James Shaw have announced.
From April 2022, agencies covered by the Carbon Neutral Government Programme will have to make sure new buildings over a certain value meet a minimum Green Star rating of five. The announcement came as countries gather to discuss how to reduce emissions from buildings at a dedicated Built Environment Day COP26 in Glasgow.
“These minimum standards will ensure Government buildings achieve a level of excellence in climate-friendly design and construction that is rarely seen in New Zealand. Leading by example in this way will create job opportunities in the low carbon building sector and expand the market for more commercial buildings to also achieve higher environmental standards”.
“Buildings are big emitters, but the solution to this – such as improved design, better waste management, improved water and energy efficiency, and the use of low carbon materials – is achievable. Cleaner, climate-friendly public buildings are not just good for the planet, they will also improve the health and wellbeing of the people who visit, work and learn inside them.
Hazard classification update for fungicides underwayA proposal to update the hazard classification of two fungicides, in line with changes recently made in the European Union and Australia, is now open for public submissions.
New Zealand’s Environmental Protection Authority (EPA) has initiated an application for a modified reassessment of the fungicides, propiconazole and tebuconazole. Both are active ingredients in timber treatments, and are also pesticides used on a range of cereal and fruit crops.
There are 125 mixtures approved for use in New Zealand containing either propiconazole or tebuconazole. They can only be applied by trained professionals in commercial settings. The EPA’s modified reassessment seeks to update the hazard classification of both substances, after investigations by EPA scientists, and conclusions from the EU and Australia on adverse health effects on the reproductive system.
A hazard classification represents the harm that could be caused by a substance and determines which controls (or rules) must be followed when handling it.
"Propiconazole is included on our Priority Chemicals List, but we are not initiating a full reassessment at this stage. This is because the new evidence we have on both substances is limited to hazard classification changes, and does not cover usage, or the risks and benefits information required for a full reassessment," says Dr Chris Hill, General Manager of the EPA’s Hazardous Substances group.
This modified reassessment is about making sure our hazard classifications are in line with others internationally, and that risks are being managed accordingly. A modified reassessment cannot revoke an existing approval (or "ban" a substance).
"We welcome public input on these hazard classification updates, to provide information, make comments, raise issues, or indicate support. We encourage anyone with knowledge or information relevant to this reassessment to make a submission," says Dr Hill. Submissions are open until 5.00pm on 16 December 2021.
Read more details on the reassessment.
Regional Forestry Hubs funding extended to 2025An additional AU$8.9 million of Australian Government funding will boost 9 Regional Forestry Hubs across the country to support growth in the forest industries in their region.
Minister for Agriculture and Northern Australia David Littleproud said the Australian Government’s investment in the Regional Forestry Hubs was a show of faith in our forest industries and the benefits that they deliver for regional communities and the Australian economy.
“The Australian Government is providing more than AU$10.6 million over 4 years for existing Regional Forestry Hubs and the establishment of two new hubs in Eden NSW, and the Northern Territory,” Minister Littleproud said.
“This allocation of funding is going to Regional Forestry Hubs in North East NSW, Central West NSW, South West Slopes NSW, Gippsland VIC, Green Triangle, North QLD, South East and Central QLD, South West WA and Tasmania.
“These key forestry areas across the country have strong potential for growth and innovation, with skilled forestry workers, transport routes and processing plants.”
“The hub model empowers each region to identify and assess their local issues and develop local solutions, while benefitting from working alongside other hubs across Australia,” Assistant Minister for Forestry and Fisheries Jonno Duniam said.
“Two new hubs are also coming online: the recently established Northern Territory Regional Forestry Hub and a hub in the Eden region which is in the final stages of development.
Source: Mirage News
Buy and Sell
... and one to end the week on ... a bit more education
Two blokes living in Australia saw a job advertised by the Queen of England. She was looking for footmen, to walk beside her carriage.
And on that note, enjoy your weekend. Cheers.
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