WoodWeek – 15 August 2018

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Greetings from your WoodWeek news team. The Government’s goal of planting more trees to create sustainable jobs and address climate change is receiving a $240 million boost, Forestry Minister Shane Jones announced this week. The grants will see an additional 60 million new trees in the ground over the next three years. The Greens have won a big concession from the One Billion Trees programme, forcing Shane Jones to accept that two-thirds of the trees planted will be natives.

The new initiatives will be funded through the PGF with about $118 million set aside for grants and a further $120 million for partnership projects over three years. This is in addition to the $245m already committed from the PGF to kick-start the programme, which includes funding for joint ventures and the expansion of the Hill Country Erosion programme.

Our ForestTECH conference series is running in mid-November once again in both Melbourne and Rotorua. The conference is very popular given the pace of technology change. Full conference and workshop programmes are on the event website, www.foresttech.events. For our readers in North America, this conference series continues running on 22-23 October 2019 in Vancouver, BC, Canada. In the meantime news and updates will be released on that website shortly.

Moving to the wood products trade, China’s wood product enterprises are facing considerable challenges in the US market. The value of foreign trade in wood products between China and the US in 2017 was US$29 billion, accounting for 19% of China’s total wood products trade. The changes to US tariffs, if implemented in full, will create a major challenge for Chinese enterprises. The tariffs will not immediately go into effect but will be subject to a two-month review process beginning in August.

The government is hinting it will lift the $25 a tonne upper limit on the price of a New Zealand Unit of carbon dioxide in the Emissions Trading Scheme. Climate Change Minister James Shaw and Economic Development and Forestry Minister Shane Jones jointly announced a six-week consultation on "improvements to the ETS", in which "the government is interested in hearing stakeholders’ opinions about exploring the possibility of a change to the $25 fixed price option".

Finally, New Zealand-grown Pinus radiata will be taller and slimmer in the future according to a new paper. While sequestering greater amounts of carbon, the trees will be more exposed to risks from extreme winds and wildfire, according to researchers from Crown research institutes Scion and Manaaki Whenua.

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Government doubles funding for trees

The Government’s goal of planting more trees to create sustainable jobs and address climate change is receiving a $240 million boost, Forestry Minister Shane Jones announced earlier this week.

As part of the One Billion Trees programme, Cabinet has approved the creation of a new grants programme and partnership fund to get more trees in the ground and provide training and employment opportunities.

“Forestry is a fundamental part of this Government’s regional development programme and we need to work with everyday New Zealanders because they are the key to achieving our tree planting target over the next ten years,” Shane Jones said.

“We’re allocating $240 million from the Provincial Growth Fund (PGF) to support tree planting in areas where wider social, environmental, and regional development goals can be achieved.

“The Government plays an important role in setting the right conditions for forestry growth and we need to work with everyday New Zealanders because they are the key to achieving our tree-planting target over the next ten years.

“We’re strengthening our support for planting over the next three to four years in areas where there are currently limited commercial drivers for investment, and where wider social, environmental or regional development benefits can be achieved.

“The new grants scheme will provide simple and accessible direct funding to landowners for the cost of planting and establishing trees and regenerating indigenous forest. Private landowners, government agencies, NGOs and iwi will all be able to apply.

“These grants will be available from later this year and we’re aiming to encourage the planting of natives, trees for erosion control, and environmentally-focused planting – all ensuring we have the right tree in the right place for the right purpose.

“These grants will see an additional 60 million new trees in the ground over the next three years.

“On top of this, a new partnership fund will create an even closer working relationship between Te Uru Rakau and regional councils, NGOs, training organisations, Maori landowners and community groups.

“This approach will allow us to leverage co-funding opportunities and existing know- how and experience.

“We’ll be looking at promoting innovation, securing sufficient labour to get trees in the ground and providing support and advice to landowners on how they can improve land-use,” Shane Jones said.

The new initiatives will be funded through the PGF with about $118 million set aside for grants and a further $120 million for partnership projects over three years.

This is in addition to the $245m already committed from the PGF to kick-start the programme, which includes funding for joint ventures and the expansion of the Hill Country Erosion programme.

Source: NZ Government





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Greens win big native trees concession

The Greens have won a big concession from the One Billion Trees programme, forcing Shane Jones to accept that two-thirds of the trees planted will be natives, Thomas Coughlan reports for Newsroom.

Shane Jones announced earlier this week that the One Billion Trees programme would receive a $240 million boost from the Provincial Growth Fund.

Normally the Greens probably wouldn't pay much attention to such an announcement, especially given the $3 billion fund represents a far more generous concession to New Zealand First than its own Green Investment Fund, which received just $100 million from this year’s Budget.

But Jones’ also announced that as many two-thirds of the trees planted will be natives and roughly one-sixth of the Provincial Growth Fund's $3 billion dollars could be spent on the tree planting programme.

Conservation Minister Eugenie Sage has previously said only native trees should be planted on conservation land and it is understood the Greens had pushed for a large number of the trees planted as part of the "billion trees" project to be natives.

New Zealand First, however, is known to prefer exotic trees, particularly pinus radiata, which grows faster and is more useful to the forestry industry. Jones has previously talked about at least half the trees being exotics, which are more suited for reprocessing and 'consume' carbon emissions at a faster rate.

In light of this, the Greens appear to have won a major concession ahead of their conference this weekend.

Jones said exotic trees take carbon out of the atmosphere faster than natives, but officials had advised him to plant a large proportion of natives.

“It’s a feature of the Government’s commitment: we do want to restore and expand native cover,” Jones said.

More >>

Source: Newsroom Pro

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ForestTECH conference online now

Our ForestTECH conference series is running in mid-November again. The conference is very popular given the pace of technology change.

This year a raft of new disruptive technologies already been trialled in the forestry industry – and allied industries – are going to be showcased for the first time in this region. Another key feature of the series this year are the pre-conference workshops that have been set up for ForestTECH 2018 delegates.

As we’ve done in the past, ForestTECH 2018 conference delegates have the opportunity of registering for a series of pre-conference workshops in both countries. This provides those attending the technology series some additional time with some of the key presenters in smaller groups. The workshops are free to ForestTECH 2018 conference delegates and will run on the afternoon before the main conference runs at each venue.

Workshops this year include: Developments in Forest Management & Wood Procurement Software, ArcGIS, Mixed-Reality Applications for Forestry (this workshop is being taken by two leading companies in this space right now, Microsoft and Taqtile Inc who are based in Seattle and have developed some innovative uses around HoloMaps and their own Manifest mixed-reality solutions) and VR Assessments for Forest Inventories.

Due to venue capacities, workshops are limited to just 40 delegates in Rotorua and 35 delegates in Melbourne. Seats for these will be filled on a “first in – first served” basis so if you and your team want to secure a space, you'd better register quickly.

For our subscribers in North America, this conference series continues running on 22-23 October in Vancouver, BC, Canada. In the meantime news and updates will be released on that website shortly.

Full conference and workshop programmes are on the event website, www.foresttech.events.


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Background: China wood products trade

Data from China Customs shows that in 2017 total value of China’s wood products trade (imports and exports) rose 10% to US$156.4 billion. The growth in wood products imports rose 21% to US$ 52.6 billion, significantly higher than the growth in exports (1.3%).

The US is the main importer of China’s wood products but anti-dumping and anti- subsidy policies in the have resulted in a sharp fall in exports to the US.

China’s wood products enterprises are facing considerable challenges in the US market. The value of foreign trade in wood products between China and the US in 2017 was US$29 billion, accounting for 19% of China’s total wood products trade.

However, tensions between the United States and China are increasing over trade issues after tariffs on US$50 billion worth of Chinese goods were announced by the US.

The US recently released a list of tariffs on US$200 billion of Chinese goods and wood products are affected including wood chips, wood charcoal, logs, other wooden products, sleepers, sawnwood, veneer, wooden flooring, particleboard, fibreboard, plywood, laminated wood, wooden doors, wooden windows, bamboo and rattan, wood pulp and waste paper, paper and board, pulp and paper products and wooden furniture and seats.

In 2017 the value of China’s exports of wood products now included in the list attracting tariff was US$16.365 billion. The value of China’s imports wood products included in the list attracting US tariffs was $8.27 billion. China imports mainly waste paper, sawnwood, wood pulp, logs and paper products.

The changes to US tariffs, if implemented in full, will create a major challenge for Chinese enterprises. The tariffs will not immediately go into effect but will be subject to a two- month review process beginning in August.

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NZ: Forestry on FaceTV & Sky

Telling our story on television is long overdue. Don Carson from the Forest Owners Association in New Zealand has 10 episodes, each of 30 minutes duration planned for FaceTV – Sky Channel 083. The first in the series played Wednesday last week. In another episode Forest Call, Don Carson talks with Forestry Minister Shane Jones, where advancing technology in steep land harvesting is showcased.

FaceTV on the Sky Network and On Demand is a national broadcaster and video production facility. It’s a niche, targeted video platform enabling video to be broadcast nationally on Sky TV, online and on social media platforms.

Future issues planned include:

Episode 2: biodiversity in plantation forests, falcon and kea, and the Scion fire fighting research tools

Episode 3: is devoted to careers and training

Episode 4: modern engineered wood products and showing off construction of the Beatrice Tinsely wooden building at Uni of Canterbury, and

Episode 5: looks at the Dryland Eucalypt programme and indigenous tree species and commercial potential.

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Trade Update: China Q2

2018 Q2 highlights:

China has posted its Q2 GDP growth of 6.7%, slightly lower than 6.8 percent in Q1 of 2018. Tighter financial conditions (such as authorities continue to demolish on shadow banking and back up financial deleveraging) led to a moderated economic growth in first half of 2018, while manufacturing output moved slower but high-tech related activities remained solid growth; resilient domestic demand helped China maintain strong growth this year even though recent data show its economy is making slower paces. Focus Economics experts forecasted a 6.5% economy growth nationwide in 2018 and 6.3% in 2019.

Property sales went down for the first time in six months due to continued speculation restrictions and rising mortgage rates both led by the government. However, new starts of real-estate construction in Q2 grew 11.3% compared 2017Q2 to 1.46 billion m2.

PMI (Caixin) indexes remained steady in Q2, both hit 51.1 in April and May and slightly decreased to 51.0 in June. Followed by a 12.6% year-on-year growth in May, China Exports achieved a 11.3% gain compared with the same period of last year to USD 216.7 million in June which surpassed the 10% growth forecast previously.



Source: Canada Wood

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How will climate change affect plantation forestry?

New Zealand-grown Pinus radiata will be taller and slimmer in the future according to a new paper. While sequestering greater amounts of carbon, the trees will be more exposed to risks from extreme winds and wildfire.

Researchers from Crown research institutes Scion and Manaaki Whenua have considered how climate change and future biosecurity threats might affect New Zealand’s plantation forests.

Considering the effects of increasing levels of carbon dioxide on photosynthesis, the productivity of radiata pine could increase on average by 10 per cent by 2040, and double that by 2090.

Lead author, Scion’s Dr Michael Watt explains: “Increasing concentrations of carbon dioxide in our atmosphere will increase the rate at which trees grow. An increased growth rate will result in trees becoming taller and more slender.”

This study indicates that the greatest threat to New Zealand’s plantation forests is likely to come from increased wind damage as increasingly slender and taller trees will be more susceptible to damage by future wind storms. The risks of breaking or uprooting can be reduced somewhat by modified forestry practices such as timely thinning and earlier harvesting, according to co-author Dr John Moore.

Very high and extreme fire risk days are also predicted to increase, with the length of the average fire season increasing by about 70% by 2040 and 80% by 2090. Fire scientist Grant Pearce found the most fire prone regions (Gisborne, Marlborough, and Canterbury) will remain the most at risk, but that the relative increase in risk is highest in Wellington and coastal Otago, where it could double and triple to 30 days and 20 days per season, respectively.

New Zealand is currently free of any significant damaging insects, but population levels and damage may increase in the future as warmer temperatures may provide an environment for foreign species and accelerate insect development. Weeds are likely to expand their range under climate change and compete more strongly with plantations.

“A decade’s worth of research into multiple climate change effects on New Zealand’s plantation forests has been summarised here,” says Michael Watt. “Determining the magnitude of climate change effects is crucial for informing national economic strategies, forest management and offsetting increasing carbon emissions as the country progresses toward a net carbon zero economy.”

More >>

Source: Scion

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Carbon Match NZU update

On a Regulatory Roll - NZUs have firmed considerably in the last two months, woohoo for sellers, last trading just earlier today at $22.95.

A consultation document on future ETS settings is expected imminently and the $25 fixed price, the government's use of an auction mechanism and international linkages are all in scope.

The fixed price is front and centre for many sellers of carbon. Several options for change have already been identified by policy-makers.

In order of "most to least ability to control the potential shift of cost to the Government" they are:
1) a volume-limited auction cost containment reserve with a trigger price of higher than $25;
2) putting the fixed price option into regulations, but at a higher value than $25;
3) keeping the fixed price option in legislation as it is now, but at a higher value than $25.

According to information released under the OIA, for now regulators have discounted the possibility of getting rid of the fixed price altogether, citing continued volatility in international carbon markets and uncertainty about future unit supply into the NZ ETS.

A cost-containment reserve certainly might not sound as exciting to a seller as simply raising the fixed price. And the Government has said that the fixed price option of $25 will stay until an alternative is available - which means waiting for auction design and/or international linkages to emerge. But all of the above options could be helpful to price in isolation, as long as a cost-containment reserve doesn't herald misplaced market meddling.

Meanwhile, EU carbon reforms have seen prices for EUAs - not linked to our market, but relevant nonetheless to sentiment- firm to hold above 17 euros - or around NZ$30.

High Hopes - Our Paris targets look so lofty as to be unattainable. For NZ, forestry is the main tool in the box; the high hope of our Zero Carbon future - however that might ultimately be defined.

But for forestry to deliver, for the playing field to even between land-uses, let alone for capital to be mobilised towards investing in a lower carbon infrastructure, the carbon price needs to do the heavy lifting. Price formation matters.

Disclosure breeds confidence. Not just for the sellers coming behind you, but for the buyers - not all of whom are "traders" - who wish to feel confident that they are paying a fair price, especially in a rapidly rising market.

Many parties have private commercial arrangements which need to stay that way. But these all peg off the current value of an NZU and spot NZUs can easily be traded online.

When you sell spot NZUs using the Carbon Match platform the price you achieved is disclosed, albeit on an anonymous basis. All other participants can see with transparency and ease that a particular price has been achieved and set their sights accordingly. This helps the wider market as well as yourself.

Source: Carbon Match

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Higher carbon price cap?

Government hints at higher carbon price cap as forestry funding soars; targets natives - The government is hinting it will lift the $25 a tonne upper limit on the price of a New Zealand Unit of carbon dioxide in the Emissions Trading Scheme, in an announcement following hard on a doubling of funding for government tree-planting.

Climate Change Minister James Shaw and Economic Development and Forestry Minister Shane Jones jointly announced a six week consultation on "improvements to the ETS", in which "the government is interested in hearing stakeholders’ opinions about exploring the possibility of a change to the $25 fixed price option".

The previous government imposed the $25 upper limit for NZUs to assist transition towards a fully fledged scheme in which the price of carbon would rise to reflect international carbon prices and assist New Zealand firms and people to take action to meet the country's commitment to carbon emissions by 30 percent from 2005 levels by 2030 and reach net zero emissions by 2050.

“A net zero emissions target by 2050 is currently being considered in the Zero Carbon Bill process but, in the meantime, we need to make sure the ETS is improved so that it is a credible and well-functioning scheme to help us meet our emissions targets,” the ministers said, noting the forestry industry's desire for certainty before committing to large-scale commercial planting after sharp swings in ETS policy over the last 10 years knocked confidence in the economics of so-called 'carbon farming'.

The ETS announcement coincided with a doubling to nearly $500 million the funding for forestry planting from its Provincial Growth Fund, with as many as two-thirds of those trees being native species.

The funding decision means one-sixth of the $3 billion, three-year PGF will be spent on planting trees.

Jones announced the boost after the weekly Cabinet meeting, including a target that two-thirds of the forestry planted with government backing should be native forests, despite native seedlings costing 10 times a pine seedling and the fact that native forests' slow growth rates reduce their short-term contribution to meeting New Zealand's carbon emission reduction goals.

Forestry planting has emerged as a key element of the government's efforts to tilt the New Zealand economy towards action on climate change, land erosion, water quality and regional unemployment, with the government committing to help fund around half of its 'One Billion Trees' initiative on land unattractive to commercial foresters.

The $240 million commitment to plant some 60 million trees will be funded through the PGF with about $118 million set aside for grants and a further $120 million for partnership projects over three years and will come on top of the $245 million already committed to the so-called 'One Billion Trees' project to kick-start the programme, which includes funding for joint ventures and the expansion of the Hill Country Erosion programme.

The funding would "support tree planting in areas where wider social, environmental, and regional development goals can be achieved" rather than clear commercial returns.

“We’re strengthening our support for planting over the next three to four years in areas where there are currently limited commercial drivers for investment, and where wider social, environmental or regional development benefits can be achieved," said Jones in a statement.

“The new grants scheme will provide simple and accessible direct funding to landowners for the cost of planting and establishing trees and regenerating indigenous forest. Private landowners, government agencies, NGOs and iwi will all be able to apply."

At a press conference to announce the initiative, Jones also made clear the government wants to avoid bringing in foreign labour to do the tree-planting, saying a key part of the plan was to get "my so-called nephs (nephews) off the couch" and into work. Some 1,000 jobs, mostly low-skilled planting, were likely to be created by the PGF funding, although Jones acknowledged that unemployed youth in South Auckland might have to move to the regions to take the work.

The government last week launched a 'Mana-through-Mahi' pilot scheme, which will subsidise employers to take on unemployed people between the ages of 18 and 24 who are on the dole, although at this stage forestry is not amongst the pilot industries.

Jones said that by 2020 close to 100 million of the targeted billion trees to be planted within a decade should be in the ground. Funding at this stage was also required to allow nurseries to gear up seedling production and for the forestry industry to start training a larger workforce.

Source: BusinessDesk

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Innovation: Wood for a taste sensation? Yes!

A couple of years from now, when you pop a piece of Dentyne or Trident chewing gum in your mouth, you may well be tasting a sweetener made from wood and agricultural byproducts using a technology developed by North Vancouver’s S2G Biochemicals Inc.

Perhaps the best endorsement of the technology is that Vancouver-based Fortress Global Enterprises Inc. recently bought up eight-year-old S2G in a $2.5 million deal.

Initially, S2G was focused primarily on refining bio-glycols – an alternative to the glycols derived from oil and gas – but it has now entered what could be an even more valuable market: making sweeteners for chewing gum.

According to Mark Kirby, CEO of S2G, which is now a fully owned subsidiary of the Fortress Advanced Bioproducts division, Fortress is developing a whole new strategy in wood processing. “Fortress wants to turn pulp mills into biorefineries,” he says.

S2G Biochem had inked a major partnership deal with Mondelez International, the multinational food, beverage and confectionery company that owns brands such as Nabisco, Cadbury, Toblerone and Oreo. Mondelez also owns the chewing gum brands Dentyne, Trident, Chiclets and Stride.

Xylitol is one of a handful of sugar alcohols, including sorbitol, used as an alternative to sugar in chewing gum and mints.

Typically extracted from hardwoods or corncobs, xylitol has one-third the calories of regular sugar and prevents tooth decay – two reasons why companies like Mondelez prefer to use it rather than other sweeteners, like sorbitol.

The problem is that it’s expensive to make, but S2G has developed a process for making xylitol more cost-effectively.

Xylitol is not a product that S2G even considered making until Mondelez approached the company, says Kirby. “We thought it was a pretty small market. We never attributed much weight to it. We were focused on glycols.

“It wasn’t until they [Mondelez] came to us and said, ‘We have a problem.’ And there’s nothing like having a customer that has a problem to help pull new technology forward.”

The market for glycols is huge – about $30 billion annually, although bio-glycol makers like S2G are competing with Big Oil in that space. Xylitol is a smaller market – US$600 million to US$700 million annually – but there is less competition.

More >>

Source: Business in Vancouver

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... almost finally ... and Canadians wonder ...

... why their exports to USA are continually targeted with tariffs for being subsidised...

Look at what their industry association leaders are asking for from their federal government:

Headline: Forest sector seeks federal partnership to improve competitiveness, accelerate innovation and ensure a healthy forest of the future

Forest Products Association of Canada (FPAC) has shared with the federal government its recommendations to enhance Canadian competitiveness, accelerate innovation, and ensure future forests remain healthy in its 2019 pre-budget submission to the House of Commons Standing Committee on Finance.

To support family-supporting jobs in rural and northern Canada, and to ensure a vibrant Canadian forest products sector for tomorrow, FPAC is calling on the federal government to support key investments in research and development and the commercialization of new technologies, continue with its aggressive trade diversification agenda, and to consider reforms to secure a healthy forest for future generations.

FPAC is calling on the federal government to:
  • Build on the momentum of successful innovation programs and initiatives like those through FPInnovations, and the Investment in Forest Industry Transformation (IFIT) Fund.
  • Continue its aggressive promotion of the use of Canadian wood, pulp and paper, and emerging bioproducts through long-term programs such as Expanded Market Opportunities (EMO) Fund.
  • Establish an industry-government working group on regulatory competitiveness to address cumulative regulatory burden facing Canada's forest sector in the face of increasing competition from markets like Brazil, Russia, Scandinavia, and the United States.
  • Address the overall tax burden, including investment depreciation treatments.
  • Ensure that during the renegotiation of NAFTA, that enhanced trade facilitation and trade remedies are key objectives.
  • Guarantee greater market access for the Canadian forest products, through the broad network of Canada's trade offices and promoting "Brand Canada" around the world.

More >>

Source: News Wire

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Jobs



Buy and Sell



... and finally ... it's magic

An Irishman and an Englishman walk in to a bakery.

The Englishman steals three buns and puts them in his pockets and leaves. He says to the Irishman, "That took great skill and guile to steal those buns. The owner didn't even see me."

The Irishman replied, "That's just simple thievery. Come back in there with me and I'll show you how to do it the honest way and get the same results."

The Irishman then proceeded to get the attention of the owner of the shop. 'Sir, I would like to demonstrate to you an impressive magical trick." The owner was intrigued and so came over to see the magic trick.

The Irishman asked the owner for a bun and then ate it. He asked two more times and, after eating them, the owner said, "Okay, my friend, where is the magic trick?"

The Irishman said, "Now, look in the Englishman's pockets."

----------------------------

This next one is also a very effective trick – but perhaps not so much magic …

My friend's father is so proud of his family of 6 children. He frequently referred to his wife as, "Mother of Six,", much to her annoyance. Finally, she cured him of his habit.

Once, on wanting to leave their guest’s home, at the end of a party, he called out loud enough for everyone to hear, "Ready to go, Mother of Six?"

"Anytime you are," she replied, "Father of Four."



Thanks for keeping up with the latest wood news with us!
Have a safe and productive week.

John Stulen
Editor

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