Friday Offcuts 29 April 2022
Although many involved in the industry are fundamentally still opposed to the decision to cease sustainable native forestry, the revised offer’s going to deliver much needed and improved financial support to those directly impacted. Hopefully, it’s also going to provide a lot more certainty to the affected sawmillers, harvesting contractors, log transport operators, their families and the communities where native forestry has played such an important role in these WA towns over the years.
Also receiving air time this week in New Zealand has been the contentious issue of Māori landowners potentially being shut out of utilising their own land by planting pine for carbon credits. What’s at stake? Well, potentially around NZ$40 billion by Government estimates. The landowner’s where a lot of the land is marginal, steep and erosion prone – sounds ideal for afforestation - currently could lose out if the Government’s proposed policy of removing exotics from the permanent forest category is enacted. We’ve included a short video clip this week that looks further at the Māori landowner issue and a more in- depth analysis on the heated debate from Keith Woodford from AgriFood Systems.
Also, out of Australia this week, the NSW Government is introducing new Farm Forestry Codes of Practice (details below) which will come into effect on Monday 2 May. Farmers and landowners supply around 30 per cent of NSW’s high quality saw logs. Farm foresters are also grappling with the issue of being unable to insure their forests. After a decline in the number of providers offering cover and a surge in premiums following the bush fires, insurance companies have increasingly been pulling back from offering plantation timber cover. Forestry Australia is working currently to work on a solution to try and increase access to insurance for growers.
Finally, New Zealand's Forest Research Institute (Scion) seemingly has been around forever – well since 1947 anyway. It’s been at the forefront of forest research and it’s work and scientists across the sector have long been renowned internationally. Many, if not all of us, have had long standing working relationships with various Scion teams over the years. This year, as the Crown Research Institute turns 75 a raft of activities and events are being planned to celebrate this special milestone. Details to follow. That’s it for this week.
This week we have for you:
Pine-forest regulation proposals creating lots of heatRight now, there is a fervent debate underway as to where pine trees fit within our future landscape. On one side stand New Zealand’s Forestry Minister Stuart Nash and Climate Change Minister James Shaw. They are proposing that existing legislation should be reversed so that pine trees would only be for production forestry and not so-called permanent forests.
Minister Nash has recently come to a position that only native forests should be permanent, and he is supported by many who hold strong environmental values. Dame Anne Salmond is one of the leaders in that camp.
In contrast, Minister Shaw is concerned that if permanent pine forests are allowed, then too much carbon will be stored in this way and urban people will no longer be forced to modify their carbon emitting behaviours. There are some huge ironies there.
On the other side stand iwi groups who own large areas of steep erodible land, often far from ports, for which permanent pine forests linked to carbon farming are by far the best income earning opportunities. These forests are also an excellent solution to the erosion problems.
Alongside these iwi groups, but perhaps not generally as well organised, are many pakeha sheep and beef farmers who also own areas of steep erodible land. If either economics or minimising soil erosion is the goal, then permanent non-harvested pine forests on this class of land are the obvious answer. Somewhat ironically, their industry organisation Beef+Lamb does not seem to support them.
This overview might seem to describe a complex situation. Dig a little deeper and everything gets even more complex and confusing. Who is right and who is wrong? As always in this world that we now live in, there is both information and misinformation. And some of the fervent believers do not understand when they are on shaky ground.
For further coverage of the views aired at a public meeting on Tuesday night where Damien O’Connor, the Minister for Trade and Agriculture, fronted up to a packed Pongaroa Hotel in rural Tararua to discuss the suggested changes, click here
Further recent opinion appearing in the Gisborne Herald can be read here
Source: interest.co.nz, Stuff
Assurance for more than AU$300m in new fundingThe Australian Forest Products Association (AFPA) has confirmed that Australia’s forest industries have been assured more than AU$300 million in new funding, including a new National Institute for Forest Products Innovation (NIFPI), new measures to boost the billion timber trees program and support for timber mill innovation to help tackle the nation’s timber shortages.
On Wednesday night, AFPA hosted the National Forest Industries Election Forum in Launceston, where the crowd heard from Assistant Minister for Forestry, Senator Jonno Duniam, and Shadow Minister for Agriculture Julie Collins about the Coalition and Labor’s respective plans to help drive the future of forest industries if elected.
AFPA Chief Executive Officer Ross Hampton said, “The Coalition led the way in commitments over the last two months based on AFPA’s ‘Plan for Growth’. These were AU$100 million for a new NIFPI to be headquartered in Tasmania, AU$112.9 million of grants to boost adoption of new wood processing technologies to get more timber into the hands of builders and AU$86.2 million to kickstart stalled new plantation growth. Last night Labor too agreed to all these measures.
“Pleasingly, both the Coalition and Labor also committed to fast-tracking the removal of regulatory barriers in the Emissions Reduction Fund in five key forestry regions currently excluded from accessing carbon credits.”
Labor agreed to match the Government’s announced AU$6.6 million for ongoing Regional Forestry Hubs Funding and AU$4.4 million to strengthen Australia’s illegal logging and timber traceability ID systems. Labor also committed AU$10 million for skills and training specifically for the sector.
Assistant Minister Duniam reiterated the Coalition’s determination to ensure the future of sustainably harvested and regrown native forestry, promising no more lockups and a process to ensure state governments which signed Regional Forest Agreements were not able to unilaterally reduce timber volumes. Shadow Minister Collins told the audience an Albanese Government would also back native forestry and that there would be no more native forestry lock ups under her.
Regarding the ‘safeguard mechanism’ which applies to some facilities in the pulp, paper, tissue and packaging sector, Senator Duniam gave a categorical assurance that there would be no carbon liability under a Morrison Government. Shadow Minister Collins said under Labor’s climate policy the Clean Energy Regulator would be told to take into account facilities’ exposure to overseas competition which did not face the same carbon regulations when determining facilities’ liabilities.
“The hundreds of thousands of Australians who work directly in our industry or with the products we create, thank Jonno Duniam and Julie Collins for their leadership, and we look forward to working with the next Federal Government on implementing these announcements to get more timber into the hands of home builders and make an even larger contribution to Australia’s target of being net zero emissions by 2050,” Ross Hampton concluded.
*A complete video of the forum will be available on the AFPA website shortly.
Worker shortages start to biteNew Zealand’s forestry industry is facing a "perfect storm" of skyrocketing demand and being unable to meet its staffing needs. A shortage of employees due to COVID-19 illness and border-related worker shortages has meant a decrease in productivity around the country. Overall, the industry's productivity has plummeted 25 percent in the past decade.
Jeff Tanner, the managing director of Pukepine Sawmills, said he ideally needed 30 more staff to get back to "business as usual". On Friday, the situation came to a head and the sawmill could not operate due to the shortages.
"We've been short-staffed for years and usually we use temporary workers to fill in," Tanner told AM on Tuesday. "We're suffering, I guess, with a lack of temporary workers that are available to help fill gaps when we haven't got people." Tanner told host Ryan Bridge some temporary employees they get can't handle the work.
"Some of those people have been so long-term unemployed that they just can't work. We'll get people that turn up - they don't even last a day, at times, because they just can't get their head around the fact that it's physical work. Now and again, we'll get somebody that just disappears at smoko and they don't come back."
The Government needed to address border restrictions earlier and get desperately needed workers into New Zealand, he said. While restrictions have eased this year, Tanner said it has been "too little, too late".
Tanner said COVID isolation rules had also compounded the issue - but the industry was unlikely to get any reprieve from those rules. Grant Robertson, the Deputy Prime Minister, said they were unlikely to change anytime soon.
Māori foresters face dilemma over replanting landMāori face a dilemma. Of the 27 million hectares of land in New Zealand, they now own only 6 percent of it - that's 1.6 million hectares. And 80 percent of that is categorised as some of the worst in the country. So, what do they do with it?
Do they make as much money off it as they can - NZ$40 billion by Government estimates, by planting pine for carbon credits? Or do they take a hit and return it all to native forest? Or is there a third option?
Whatungarongaro te tangata, toitū te whenua - as man disappears from sight, the land remains.
This Māori proverb talks about the deep connection Māori have with their land. But years of confiscation and land alienation have left Māori with some of the worst whenua (land) in Aotearoa. "The scale only goes to 8, and 8 is the worst classification and 80 percent of Māori's 1.6 million hectares is in category 6-8," said Ngā Pou a Tane - National Māori Forest Association chair Te Kapunga Dewes.
Half of Māori land is under-utilised, that's 800,000 hectares. Most of it is marginal and steep, meaning forests are the only option. The other issue is Māori land can be an economic burden due to barriers with communally owned land. This means being unable to attract funding or use the land as security.
But if that land was planted right now in pine, it could be worth NZ$40 billion (based on the net present value) to Māori landowners through carbon credits. Trouble is the Government is considering removing those credits on exotic forests.
Dewes represents Māori foresters and wants the Government to leave the payment alone. "[There is] 50,000 NPV (net present value) for 1 hectare of land, Māori land [is] underdeveloped right now. And I don't see the Government giving billions of dollars to Māori to develop their land, so perhaps they should just leave it alone," said Dewes.
Revised compensation package for WA forestryThe WA government has tried to ease the pain on forestry businesses affected by a logging ban by announcing a revised multi-million-dollar compensation package. ln September the government announced it would end native forest logging from 2024, a move that divided opinion and saw hundreds of people protest in the state's forestry region.
In pressing ahead with the plan, Forestry Minister Dave Kelly has announced a revised business support package worth about AU$26.9 million — more than half of the AU$50 million that had been allocated to transition the industry away from native timber logging.
But the shire president of the town most affected by the ban accused the government of acting "undesirable" in its handling of the transition. Mr Kelly said the new package would be available to mills, harvest and haulage contractors and suppliers of firewood that were adversely affected by the end of native logging.
"It's a very substantial package," he said.
The revised changes
There were three points of difference announced in the new business package options. Firstly, the amount being allocated towards supporting businesses is "more than double" the initial sum put forward by the government.
Mr Kelly said the new option would be a single industry restructuring payment that all businesses would be eligible for based on their contract volumes, without being required to make a decision as to the future of their business before they received the funds.
Previously, businesses had to decide whether or not they wanted to adapt to remain in the industry or leave altogether. The previous version of the package was also criticised for its lack of support for business owners who would be unable to afford redundancy payments.
Now, it includes up to AU$100,000 for businesses to cover any statutory redundancy payments they may incur if employees are made redundant.
Forestry Industry Federation WA (FIFWA) chief executive Adele Farina said while the revised offer did not extend as far as the federation and its members would have liked, it delivered much-needed and improved financial support. "The government's revised business program is a welcomed improvement on the original," she said.
Further coverage on the announcement and package can be read here along with comment from industry
Photo: WA Forest Alliance
Source: ABC, Forestry Industry Federation WA, McGowan Government
$1.1m to cultivate upcoming forestry greatsOften, all a young person needs is an opportunity to reach their full potential. Enter the WIDE Trust who, over the last two years, has approved grants of NZ$1.1m to young people undertaking research projects and studying towards both academic and trade qualifications in the forestry and wood industry sectors in New Zealand.
Leah van Boven is one such recipient of grants from the WIDE Trust over her four years of study.
“Growing up in Rotorua has given me a huge appreciation for the forests. With both my father and grandfather having worked in forestry throughout my life, I knew I wanted to learn more and join this developing industry. The last three years at the School of Forestry has taught me so much, from learning about the industry, to becoming more confident in myself and the work I do.”
Leah had the opportunity to further develop her skills at Timberlands Ltd up in the Central North Island over the summer. The WIDE Trust continues to support Leah as she completes her Bachelor of Forestry Science this year.
Dominic Cleary is a fourth year Bachelor of Forestry Science student and also a recipient of grants from the WIDE Trust. “It’s a great degree with a wide range of topics that captures the breadth of the industry. Currently we are working on a final fourth year case study, where we are analysing the small-scale plantation estate in Te Tairāwhiti. This study is the perfect summary of the degree where we put to use everything we have learnt.”
Dominic says he particularly enjoys small-scale/woodlot forestry and is keen to work with these sorts of forests after graduating. “It’s a win-win situation really, helping landowners maximise their return whilst also encouraging sustainable practices to look after our natural environment.”
Photo: Dominic (right) pictured with Milan Clarke a fellow student who is also a recipient of a WIDE Trust grant
Source: WIDE Trust
New Farm Forestry Codes of Practice introducedThe NSW Government is introducing new Farm Forestry Codes of Practice that will ensure long-term sustainability for the industry and provide robust environmental protections across the NSW private forestry estate. The new Codes, which come into effect on Monday, 2 May 2022, are the result of a rigorous review of Farm Forestry in NSW as well as advice from the Natural Resource Commission.
Deputy Premier and Minister for Regional NSW Paul Toole said farmers and landowners supply around 30 per cent of NSW’s high quality saw logs. “Farm Forestry is a pivotal part of our regional economies, generating AU$482 million annually and supporting 835 direct and indirect jobs on the North Coast alone,” Mr Toole said.
Minister for Agriculture Dugald Saunders said the new Farm Forestry Codes are a key commitment made to landholders and the community under the NSW Forestry Industry Roadmap. “Farm forestry is the ultimate renewable industry and an Australian grown product that we should all be very proud of,” Mr Saunders said.
“These new Codes provide a consistent and sustainable approach to how farmers manage their farms and forests, are clear and easier to use, and meet the principles of ecologically sustainable forest management.”
The new Farm Forestry Codes have been informed by specialist experts in Forest Science and Ecology, and reviewed by the NSW Natural Resources Commission which found that the new Codes of Practice are a substantive improvement on the existing PNF Codes.
New changes for landowners under the codes include:
• New harvest and operating standards that provide greater clarity and are easier for landholders to apply – now including pest, weed and fire management;
• Updated planning and reporting with a clear role for Local Land Services to engage with farmers, and options for small scale harvesting; and
• Environmental protections that are clearer for landholders while ensuring long-term environmental and productive sustainability in farm forests.
Source: NSW Government
More details on Methyl Bromide & EDN decisionsIn August 2021 a decision on the Reassessment of methyl bromide for fumigation of New Zealand logs was released by the EPA. This was followed more recently by the release of the decision approving the use of EDN in mid-April 2022. Details on the announcement were covered in a Friday Offcuts story a couple of weeks ago.
Both processes had taken considerable time and resource, methyl bromide almost 2.5 years and EDN almost 5 years. To maintain trade of logs with some countries, fumigation treatments are required. Over 71% of all logs exported from NZ are now treated with in-transit, in-hold fumigation using phosphine. China is the only market that accepts phosphine as a treatment with over 14 million tonnes being treated this way last year. The ability to increase the phosphine treated volume is close to maximised unless there are significant changes to ship types or a reduction in top stow logs carried as phosphine is restricted to underdeck treatment as it requires 240 hours to complete the fumigation.
China also accepts debarked logs and methyl bromide treated logs. In 2020, debarking was applied to about 9% of logs exported and the balance was treated with methyl bromide. Debarking volumes continue to grow, and methyl bromide volumes continue to decline as shown below when measured in percentage terms, but when considered in volume terms, the decline of methyl bromide is not as pronounced due to rising export log volumes.
Even with these decisions now announced, it is probable that fumigation using methyl bromide or EDN will only be permitted at Tauranga and Northport, unless off-port facilities are established elsewhere.
The key operational points from the Reassessment Decision were around increased buffer zones when fumigating and increasing requirement to recapture methyl bromide after completion of the fumigation. Of particular importance was the need for extensive buffers (900 metres) around any ship hold fumigation with methyl bromide. As this is impossible to achieve (given this extends both outside the Port boundaries on the landward side and into the marine environment on the seaward side), all fumigation of ships holds effectively ended shortly after the decision last year.
This has far-reaching effects and has resulted in an almost complete cessation of log export to India from New Zealand as methyl bromide is the only treatment accepted by Indian Authorities. This also means over 90% reliance on China as a market for our logs.
Recapture of gas remaining after fumigation under tarpaulins is being further developed by Genera and is likely to allow ongoing use of methyl bromide for the next few years at least, but with increasingly tighter requirements and the need to adequately destroy, recycle or reuse the methyl bromide recaptured.
Globally, efforts to reduce methyl bromide use have been ongoing for decades due to the adverse impact of the gas on the ozone layer. While use is restricted to phytosanitary activities some jurisdictions have also moved to ban its use completely.
STIMBR has shown that considerably lower rates of methyl bromide will achieve the same phytosanitary results, but to date, importing countries have yet to accept these results and change their requirements.
Acceptance of these lower application rates would increase the ability to recapture the remaining gas and to reduce the environmental impact if its use.
For a more detailed analysis of the methyl bromide and EPN decision from STIMBR, click here
Ravensdown switching to wood biomass fuelRavensdown has announced that it has achieved NZ Government co-funding to accompany the co-operative’s investment to install a biomass combustor at its Dipton lime quarry. Locally supplied wood fuel will replace coal in the lime-drying process – an important part of preparing the naturally occurring soil conditioner for use by Southland farmers and growers.
The co-operative’s commitment is being matched by funding through the Government Investment in Decarbonising Industry (GIDI) Fund. The funding agreement with EECA (Energy Efficiency and Conservation Authority) commits Ravensdown to savings of at least 1,107 tonnes of greenhouse gas emissions per annum, reducing Ravensdown’s direct carbon footprint by almost 10%.
According to EECA, process heat accounts for over a quarter of New Zealand’s energy-related emissions, presenting a huge opportunity for businesses to take a lead in climate change mitigation. The GIDI Fund is part of the government’s Covid Response and Recovery Fund, established to drive economic stimulus and job creation through decarbonisation projects.
The project contributes to Ravensdown’s commitment to eliminate coal use by 2030 and is the outcome of comprehensive study to ensure that the most appropriate renewable fuel has been selected for this particular site and activity.
National Quarries Manager Richard Millar explained that the conversion will have secondary benefits for the local area. “Heat from burning coal is currently used to dry lime on site before it is distributed to customers’ farms. We’re particularly excited to have Niagara Wood Fuels on board as a local supplier for the biomass. By sourcing the fuel from the surrounding area, the idea is to contribute to the local economy and reinvest in community development”.
“The heat source is an essential part of our production, and it has to work reliably in all conditions. Knowing that we can continue to meet farmers needs while removing our biggest source of emissions at the quarry is a major step forward.”
Scion celebrates 75 Years of forest scienceSince it was established in 1947, the Forest Research Institute (photo from 1953), which we now call Scion, has played a significant role in forest research for New Zealand. This year, the Crown Research Institute (CRI) turns 75 and continues to deliver impact for New Zealand, not just across the forestry sector, but also in the area of biomaterials, bioenergy, waste and ecosystem services.
In April 1947, the State Forest Service established a Forest Experiment Station beside the existing nursery at Whakarewarewa Forest. The decision to centralise forestry research laid the foundation for Scion today, supporting New Zealand's third largest export industry.
Scion’s research has had significant outcomes for New Zealand’s 1.7 million hectares of planted forests. Forestry adds NZ$6 to NZ$7 billion to the economy each year in export revenue and provides jobs for around 35,000 people.
Scion’s chief executive Dr Julian Elder says the 75th anniversary is a chance to reflect on where the organisation has come from and where it is headed, but also to really acknowledge the place that Scion sits right now – quite literally, the land on which the institute was built.
“When we opened our award-winning innovation hub, Te Whare Nui o Tuteata, in March last year, we started on a journey of inviting visitors into Te Papa Tipu campus, where Scion is headquartered in Rotorua, and sharing our work with the community.
Study to look at permanent carbon farmingA Tairāwhiti research group has secured funding of NZ$250,000 to educate and work with Māori who are most likely to be impacted by permanent carbon farming in the region. The group is funded through the Deep South Challenge which is one of the New Zealand Government’s national science challenges that aim to tackle the country’s biggest science-based issues and provide job opportunities.
The Tairawhiti group is one of 14 research projects which has found support from the Deep South Challenge to investigate climate impacts and shine a light on indigenous leadership in response to the serious and urgent challenges of the climate crisis. The Tairawhiti group’s main focus is on how the prevalence of permanent carbon forestry along with higher carbon prices is affecting whanau involved in farming and forestry in the region.
One of the researchers, Manu Caddie, said while millions of dollars were spent researching exotic forestry, only a fraction was being spent on learning about the utility of indigenous forests. “For example, Scion Research which is the Crown Research Institute for forest research and established in 1992 has spent roughly a billion dollars researching exotics but the comparison pales when it comes to spending on researching natives,” he said.
The group’s project co-lead Hunaara Waerehu said as more land was converted from dry stock farming and harvested pine plantations to permanent forests the workforce required would change and Māori would be significantly affected.
Source: Gisborne Herald
Forestry Australia working on insurance optionsForestry Australia says it is working on a solution to increase access to insurance for growers after a decline in the number of providers offering cover and a surge in premiums. CEO Jacquie Martin says the rising cost of plantation insurance has been an issue for a number of years, and premiums have climbed to a point where they are unaffordable for many farm foresters and private forest growers.
“Anecdotally, this has seen some Forestry Australia members forced to opt out and grow their plantations without insurance, which is a difficult decision for a business to make,” she told insuranceNEWS.com.au. “We have been working closely with members and insurance brokers on this issue and look forward to finding a solution which suits all parties.”
Forestry consultant and former president of Australian Forest Growers, David Geddes, says capacity is a global issue following the Black Summer bushfires in Australia and severe fires in Europe and North America. In the local market capacity declined as one of the key providers, Primacy, which is mainly a crops insurer, pulled back from plantation timber cover. Its policies are in run off.
The biggest plantation growers in Australia, which have risks widely spread over states and areas, are more likely to self-insure, while smaller operations relying on the local market have been hard hit by reduced capacity, Mr Geddes says. One grower who elected to continue with cover experienced a nine-fold increase in premiums between 2020/21 and the current financial year, he says.
“I know lots of growers just thought I am going to take the risk this year and not insure, and I certainly know of one in Western Australia who lost a reasonable chunk of plantations in fires earlier this year,” he told insuranceNEWS.com.au.
Mr Geddes says not having insurance is particularly devastating when losses affect a long-term crop, which may not be due for harvest for another decade, and the issue could potentially affect supplies into the future. “If you are deciding whether to plant trees or not, and you don’t think that you would get insurance, that is one of the things that would stop you planting,” he said.
Stora Enso divests Russian sawmills & forest operationsStora Enso has entered into an agreement to divest its two sawmills in Russia. The Company’s Nebolchi and Impilahti sawmills will be divested to local management. In addition, the divestment includes Stora Enso’s Russian forest operation which through its harvesting supplies wood to the sawmills.
Stora Enso’s assessment is that due to the uncertainties in the Russian market, local ownership and operation can provide a more sustainable long-term solution for these business operations and the employees working there.
The transaction is, pending necessary approvals, expected to be concluded within Q2 2022 and will have no material impact on Stora Enso’s annual sales and Operational EBIT. The sawmill sites are located in Novgorod and Karelia employing approximately 330 people and have a total annual capacity of 350,000 m3 of sawn timber, including 55,000 m3 of processed timber and 65,000 tonnes of pellets.
Stora Enso’s Russian forest operations employs approximately 170 people and manages long-term harvesting rights for around 370,000 hectares. Stora Enso announced on 2 March 2022 that it would stop all production and sales in Russia until further notice. The Group is in a process to find a sustainable solution for the future of its three packaging plants in Russia.
Source: Stora Enso
Buy and Sell
... and one to end the week on ... Dad at the mall
I took my dad to the mall the other day to buy some new shoes. We decided to
grab a bite at the food court when I noticed he was watching a teenager sitting
next to him.
And on that note, enjoy your weekend. Cheers.
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