WoodWeek 2 August 2017
Brian Stanley of Woodco said, “We're concerned the government message to anyone contemplating planting trees is to plant later on; not now. A potential forester is likely to think a delay might get them a better ETS regulatory deal than now.”
He added, “I’m sure that this is not what the Parliamentary Commissioner for the Environment has in mind for getting New Zealand on track to meet its Paris Agreement commitments. The government should simply say nobody is going to be disadvantaged by the outcome of the ETS review if they decide to plant now.”
NZIF President James Treadwell had this to say, “The Government has done some great work in the ETS review, but it’s missed a few key opportunities to simplify the complex and piecemeal arena around global emissions."
"Quite simply, New Zealand’s emissions profile gap can be improved with new forestry plantings. But the recent announcements from the Minister that further changes are possible, are unlikely to motivate new forest plantings, and may even encourage deforestation."
Looking to markets – Signs are good right now for the country’s wood processing industry. Shipments from New Zealand into the US market have in fact gone up 37% over just the past four years and during the first five months of 2017. For log exports from New Zealand to China the news is outstanding - month on month shipment values are up 20% (June 2017 vs June 2016) and year on year values are up 28% (for year to end of June).
To assist local mills evaluate the very latest in sawmilling technologies, FIEA is running our WoodTECH 2017 conference on 26-27 September. We are featuring tailored presentations from global technology leaders, trade exhibitions and practical workshops.
“It’s a who’s who of international saws and sawmilling technology who will be travelling into Australasia” says FIEA director Brent Apthorp. “We have over 20 of North America’s leading technology providers, joined by many European leaders and as always, local innovators involved.”
“What makes 2017 special is our series of workshops,” he adds. “For the first time, a series of practical troubleshooting workshops have been designed for a much wider cross section of sawmill operations staff. Our speakers will be providing insights for local sawmillers to extract the very best performance from their sawing operations.”
This week we have for you:
ETS review may reduce forest plantingETS review may reduce forest planting while foresters wait for certainty - Forest owners and wood processors say they appreciate the government needs to fine tune the Emissions Trading Scheme, but they believe present uncertainty in the ETS might lead to a reduction in forest planting, just when it needs to increase.
The Chair of the pan industry organisation WoodCo, Brian Stanley, says the call today from the Parliamentary Commissioner for the Environment for a Climate Change Commission, if accepted, should produce enough muscle to get New Zealand to meet its greenhouse gas reduction targets.
But Brian Stanley says the crucial role of the plantation forest industry in locking up atmospheric carbon needs more certainty in the ETS.
“The government has just announced that it’s working on formulas in the ETS which will recognise that timber locks up carbon just like the trees it’s derived from. That is good – it recognises reality. Carbon may be locked up in a building longer than it was in the trees the building was made from and this should be factored into the ETS.”
“There’s also the prospect, which is being considered, that forest growers could get their carbon credits averaged over the rotation of a forest. At the moment, it’s all the credits earned when they plant and all have to be returned when they harvest,” Brian Stanley says. “"There ought to be a simple option available for foresters to smooth receiving credits up to a forests long term average."
“So, what we are concerned about is that the government is in effect sending a message to anyone contemplating planting trees that they should plant later on and not do it now. A potential forester is likely to think they ought to delay a couple of years or more because they might get a better ETS regulatory deal when they plant then.”
“I’m sure that this is not what the Parliamentary Commissioner for the Environment has in mind for getting New Zealand on track to meet its Paris Agreement commitments. The government should simply say nobody is going to be disadvantaged by the outcome of the ETS review if they decide to plant now.”
Brian Stanley also says there is no reason why the government itself should not take an initial lead role in getting forests planted out, even if it exited from ownership once a momentum of planting was underway.
“It’s not as though it would cost the government in the long term. There’s good income to be made out of growing trees, so long as you are prepared to wait. In comparison, using billions of dollars to buy overseas carbon credits doesn’t return anything.”
“Another fear is that if the critical industry labour training and recruitment, is not sorted now, there will be nobody available to plant the trees in the rush of volume that will be needed if we delay any further.”
Source: Wood Council of New Zealand (Woodco)
Market update - export logsThanks to the great team at Champion Freight we've got the latest export market activity update for you in a series of really self-explanatory charts. They have some easy-to-read labels on the charts so they are readily identifiable even when printed in black & white.
For log exports from New Zealand to China the news is outstanding - month on month shipment values are up 20% (June 2017 vs June 2016) and year on year values are up 28% (for year to end of June).
New technology investments for exportIncreasing lumber exports leads to new technology investment - Signs are good right now for the country’s wood processing industry. Shipments from New Zealand into the US market have in fact gone up 37% over just the past four years and during the first five months of 2017.
The US has now overtaken Australia as the number one export destination for pine lumber produced in New Zealand. In terms of value, New Zealand is now the second largest overseas lumber supplier into the US, behind Chile, but still ahead of lumber exporters from Europe.
Even better is news that US market growth is expected to continue. International WOOD MARKETS Group reports that rising consumer confidence; high builder optimism; historically low interest rates and tight inventory levels of both new and existing housing in the US are all strong indicators supporting new housing starts. After a long period of under-building and price recovery, US housing starts are forecasted to grow by seven per cent per year in 2017 and 2018.
The impact of duties on Canadian lumber exports into the US could also be a game-changer for lumber exporters to the US. Any increased duties will see Canadian exports to the US drop by 10 to 15 per cent. With growing demand there and reduced lumber supplies from Canada, US buyers are expected to look for lumber from the Southern Hemisphere and Europe.
For New Zealand sawmills to meet rising log costs, remain internationally competitive and increase exports to the US, many are now investing in new sawmilling technology.
The world's most advanced sawmill and the first "super-mill" in the Southern Hemisphere, Red Stag Timber in Rotorua was officially opened recently. Having invested over NZ$100 million, general manager Tim Rigter says it has the capacity to now process over one million tonnes of logs per year. In Otago, Japanese-owned Pan Pac Forest Products completed a NZ$24 million redevelopment of it's Milburn sawmill. Other mills are increasing their production, investing in automation and looking at new equipment.
To assist local mills evaluate the very latest in sawmilling technologies, specialist tech event organisers, the Forest Industry Engineering Association (FIEA) is running WoodTECH 2017. It’s a two-yearly programme of tailored presentations from global technology leaders, trade exhibitions and practical workshops which runs in Rotorua on 26-27 September.
“It’s a who’s who of international saws and sawmilling technology who will be travelling into Australasia” says Brent Apthorp, FIEA director. “We already have over 20 of North America’s leading technology providers, a significant number of European sawmilling equipment suppliers together with local innovators involved in the WoodTECH 2017 series”.
“What makes 2017 special is the series of workshops that this time have been set up for local sawmills” says Mr. Apthorp. “For the first time, a series of practical troubleshooting workshops have been designed for a much wider cross section of sawmill production and operational staff. They’ll be providing an insight into how local sawmills can extract the very best performance out of their saws and sawing operations”.
In addition to showcasing new sawmilling technologies at WoodTECH 2017, another one-day conference is being run the day after WoodTECH 2017 on 28 September titled, “Changing Perceptions of Engineered Timber in Construction”. “The week of planned activities will be providing a unique showcase of new production and construction technologies for wood producers, wood suppliers and wood users throughout the country.
WoodTECH 2017 Conference & Exhibitions – Wood Scanning, Sawing, Optimisation, 26-27 September, Rotorua, www.woodtech.events
Changing Perceptions Conference – Advantages of Timber in Midrise Construction – 28 September, Rotorua, www.cpetc2017.com
UBS retained to sell GFP forest assetsForestry investment manager Global Forest Partners has hired investment bank UBS to sell its pine plantation business in New Zealand.
It's understood Global Forest Partners has asked UBS to commence a sale process for Nelson Forests Ltd, which owns more than 60,000 hectares of pine plantations in New Zealand's Nelson and Marlborough regions.
The business also includes the Kaituna Sawmill.
UBS is expected to pitch the forestry assets to potential buyers in coming months. The owners announced they were considering selling the business last month.
Global Forestry Partners and its predecessors have owned the Nelson estate assets for the past 25 years. Nelson Management Ltd, which runs the forestry business, is owned by Nelson Forests Ltd.
Global Forest Partners is one of the world's oldest and largest forestry investment advisers and manages about $US3.1 billion in forestry assets in eleven closed-end funds. It was founded in 1982 and spent almost a decade as part of UBS. The fund manager has been employee- owned since 2003.
Global Forest Partners' investments include assets in Australia, New Zealand and South America.
Source: Financial Review
NZ Logger - Fast ForwardIt's the largest single production thinning operation in New Zealand and it requires some serious hardware to harvest and shift up to 950 tonnes of wood each day. Jensen Logging has made substantial investments in equipping its crews to tackle this mammoth task and among the new machines that bring the young stems out of the Kaingaroa Forest is the very first Komatsu 875 forwarder to go to work in Australasia - probably the largest forwarder you'll see in production thinning. NZ Logger magazine has the first Iron Test of the 875 in its August issue.
Also in this issue, the magazine visits a harvesting operation near Wanganui that was started by an American logger.
Plus much more, in the August 2017 issue of NZ Logger, now on sale at selected service stations, or to subscribe for either the printed version and/or the digital version, visit www.nzlogger.co.nz.
ETS imbalance will cost countryEmission trading scheme imbalance will cost New Zealanders - Recent updates to the Government’s Emission Trading Scheme (ETS) are a mixed bag according to the NZ Institute of Forestry (NZIF).
Climate Change Minister Paula Bennett announced a raft of changes in the fraught area of global emissions last week. Key players in the Forestry sector are concerned that these changes will end up costing New Zealanders unnecessarily, and jeopardise meeting our international obligations.
Under the Paris Agreement, New Zealand has ended up paying more than many other countries, simply because we emit more carbon than we fix.
NZIF President James Treadwell says, “The Government has done some great work in the ETS review, but it’s missed a few key opportunities to simplify the complex and piecemeal arena around global emissions." "Quite simply, New Zealand’s emissions profile gap can be improved, with new forestry plantings. But the recent announcements from the Minister that further changes are possible, are unlikely to motivate new forest plantings, and may even encourage deforestation." "Right now the forestry sector needs clarity. It’s time for the Government to issue a strong message to foresters and say you will not be disadvantaged by any future changes to the ETS framework. Certainty is required. "It’s forestry. We’re dealing with a 30 year investment maturity."
"Complex planning, land use and investment considerations are involved on top of these ETS requirements."
"NZIF and the forest sector are calling for key changes that offer greater certainty and give investors confidence to get into land planting."
"The current uncertainty does nothing to encourage long term investment such as planting of new forests, and this ultimately increases the costs for New Zealanders now and in the future”. In addition, the Government review has left the agriculture sector outside of the ETS. This significant omission has stirred up comment across the country. The NZIF is calling time on this imbalance.
The Government needs to level the playing field in New Zealand, and bring agriculture into the ETS equation. Better to encourage investment in New Zealand forestry and facilitate meet our international emission commitments. The positive commitments of planting our own poor land, creating employment in the regions, tackling erosion, and reducing our carbon footprint are surely preferable, to buying carbon credits from other countries.
Source: NZ Institute of Forestry
ETS changes last weekThe government is preparing to reopen the New Zealand emissions trading scheme to international carbon credits, but is signalling less willingness than in the past to rely on other countries' efforts to combat climate change because of the open-ended cost of doing so.
Climate Change Minister Paula Bennett announced a range of decisions from the second part of a major review of the ETS, including the intention to control the number of so-called New Zealand Units (NZUs) of carbon by putting up pre- determined quantities for auction, removing the $25 per tonne upper limit on the price of a tonne of New Zealand carbon, and reopening the New Zealand ETS to international carbon credits.
The ETS has been closed to international markets since 2015 and there has been controversy over the acceptance before that time of very low-cost international carbon credits of dubious integrity generated mainly in former Soviet states, such as Ukraine, where the collapse of traditional heavy industries and endemic corruption led to a flood of carbon credits becoming available.
Today's announcements are important markers in the evolution of the scheme, but the design of an auction system, the timing and extent of the price cap changes, and access to international markets have yet to be finalised. Decisions on treatment of forestry planting in the ETS and the phasing out of 'free allocation' of carbon credits to trade-exposed industries will be addressed by mid-2018, Bennett said. No change in the operation of the ETS is expected before 2020.
Agricultural emissions remain excluded from the scheme in the absence of commercially viable technologies to help farmers reduce biological greenhouse gas emissions.
The largest change in today's announcements was "a future limitation on use of international markets," said Adrian Macey, a former New Zealand diplomat who has served at the highest levels of international climate change negotiations and is now at Victoria University's Institute for Governance and Policy Studies. That signal was important as it was "something that has run counter to the doctrine that has prevailed so far that it does not matter where emissions reductions are made".
"Linked to that is the signal that (the) government envisages intervening to ensure the New Zealand carbon price is aligned with our climate change targets," said Macey. "Previously the doctrine was that the 'international price of carbon' would be appropriate in New Zealand."
However, that approach had been leading to "potentially unsustainable consequences - notably the prospect of spending billions of dollars offshore with no benefit to the New Zealand economy or its own transition to low carbon," said Macey.
Details of New Zealand's plans to link with other countries carbon-trading schemes are regarded as sensitive and had been "unnecessarily" blanked out of the Cabinet paper released today, said Macey in comments to the Science Media Centre.
Bennett's other main decision was to commit to decisions about carbon unit supply on a five-year ahead rolling basis to bring greater certainty to the ETS, which has been plagued by uncertainty and policy swings.
Source: BusinessDesk via Scoop News
Eastland Port logs another recordDespite a wave phenomenon that kept ships from the harbour for a week, Eastland Port in Gisborne and log marshalling and stevedoring companies ISO and C3 shattered monthly log throughput records in June. A total of 287,349 tonnes of wood was loaded onto 14 log vessels as they berthed one after the other at wharf 8.
Eastland Port manager Andrew Gaddum says shifting that amount of wood is testament to the reliability and professionalism of ISO and C3 staff. “Both ISO and C3 have worked hard to increase their ship load rates, and while we still collectively have work to do in this area, the huge volume exported during the month is testament to their hard work and focus.
“The fact that there were no significant safety issues identified or reported during that extremely busy month is also exceedingly pleasing. When ships are alongside a port, it’s costing the exporters money, so these guys are the ones that through their skilfulness and shear hard work, can get the ship turned around and off to market as quickly as possible”.
ISO employs around 110 people and C3 employs around 70. Mr Gaddum says June’s throughput figures are the highest the port has achieved since Eastland Port, part of Eastland Group, was formed 14 years ago.
“We saw an 83 percent occupancy of wharf 8. With 14 ships docking during the month, and each one taking one to three days to load, we are getting closer to maximum capacity.” The figures are all the more impressive because between June 12 and June 19 we couldn’t dock any ships due to infra-gravity waves rolling into the harbour, says Mr Gaddum.
“Long waves or infra-gravity waves cause problems in harbours around the world. These waves can't be seen as they are usually masked by the sea and swell waves. But they can energise a moored ship and cause excessive movement and surging against the mooring lines. When the time between wave peaks becomes extended we have issues in our port with ships becoming difficult to manage alongside the wharf, meaning we have to hold ships at the anchorage until the surge event passes.”
Mr Gaddum says the combined length of wharf 8 and wharf 7 is 360m. Eastland Port can currently accommodate vessels 200m long but with the greater volumes of wood forecast to arrive over the next 15 years, Eastland Port needs the capacity to berth two 200m ships simultaneously at wharf 8 and wharf 7. Within our port we don’t have enough wharf frontage to berth two 200m vessels at once. We need to extend wharf 8 by about 80 metres to get both ships in safely and we need to do it now.”
Source: Eastland Port
FWPA: Rising exotic pest riskExotic pest risk real and rising in Australia - A recently completed analysis of Australia’s national forest industry biosecurity programs has revealed exotic pests are a real and rising risk to Australian plantations and native forests – and that the right investments in prevention and mitigation pay off.
The comprehensive study included an analysis of the cost benefit of two current pest management examples – chysomelid leaf beetles and sirex woodwasp – and modelled a potential scenario for an incursion by the pinewood nematode. In all three studies, it was found that significant investment in research on control early in the program is critical to a timely and cost-effective outcome.
Co-funded by Forest and Wood Products Australia and the University of the Sunshine Coast, the researchers concluded current forest biosecurity surveillance beyond border control was insufficient, inconsistent and reliant on a cohort of experts nearing retirement. It was recognised that Australia has a world-class biosecurity system, but that it currently has a greater focus on agricultural and horticultural industries.
It is anticipated that many of these issues will be addressed in the National Forest Biosecurity Surveillance Strategy (NFBSS) and Implementation Plan currently under development.
Key project researcher, Dr Angus Carnegie, said it was crucial to be vigilant to the arrival of pests and to act quickly in a whole-of-industry way when addressing pest incursions.
For example, by the time pinewood nematode was detected in Portugal, over 500,000 hectares were affected by pine wilt disease and a €38 million (AUD $57 million) eradication program failed. By contrast, three isolated outbreaks in Spain were detected early and eradicated for less than €5 million (AUD $7.5 million).
The researchers modelled a scenario in which the pinewood nematode – which is carried by Japanese pine sawyer beetles – arrived at the Port of Brisbane in wood packaging, before being transported to a holding facility in Caboolture and spreading to commercial softwood plantations five kilometres away at Beerburrum.
A cost-benefit analysis found it would be worth spending $350,000 a year in biosecurity activities (e.g. surveillance, trapping) to prevent pine wilt disease from becoming established at Beerburrum.
“Biosecurity surveillance is insurance. You hope your house isn’t going to get robbed or burnt down but it’s well worth spending a couple of thousand dollars a year on premiums just in case,” said Dr Carnegie, who is Principal Research Scientist at the NSW Department of Primary Industries.
“It is particularly worthwhile conducting systematic surveillance in trees near ports, where exotic pests may first become established.”
The report also details the history of biosecurity in Australia; Commonwealth and State Agency linkages and responsibilities; and the establishment of commercial state plantation resources. It found:
• There has been a steady increase in pests detected at the Australian border since 2000 with the growth in trade via shipping – and those detections are the tip of the iceberg as most containers are not inspected.
• Recent examples of pests which have made it past the border and affected Australian trees include myrtle rust and giant pine scale.
• There was a need for better staff and industry training to increase the potential to detect emerging threats, with no currently nationally recognised course on biosecurity.
• Within five years, a substantial number of experienced technical experts in Australia will have retired.
• Sixty-nine per cent of forest growers surveyed conducted pest population monitoring, but only 56 per cent had staff awareness programs for forest health and biosecurity.
The research used data from both industry and government, and was conducted collaboratively by the University of the Sunshine Coast, NSW Department of Industry (Forest Science) and Forestry Tasmania. The study was peer-reviewed by Dr Andrew Liebhold of the US Department of Agriculture Forest Service, who described it as a “very impressive” report that should provide “excellent guidance in planning national efforts on forest biosecurity in the future”.
Dr Liebhold stated this was the most detailed assessment of its kind that he has seen to date and felt that it served as an exemplar report that should be reviewed and replicated in other major forest grower regions and nations.
The full report is available on the FWPA website (click here) and a series of webinars are being prepared.
Analyst: US-Canada deal possible soonThe framework for a 10-year softwood lumber agreement between Canada and the United States could be reached in the coming weeks, an industry analyst says, citing discussions with unnamed trade contacts.
In a report released on Thursday, Hamir Patel of CIBC World Markets Inc. said a deal setting quotas on Canadian softwood exports could be acceptable to the U.S. lumber industry if Canada drops several demands. That would include withdrawing a request that New Brunswick be excluded from any softwood agreement restrictions, Mr. Patel said.
“We now believe there is a greater than 50 per cent probability that the two sides could announce an agreed-upon framework by the end of August,” he wrote.
He said the U.S. Lumber Coalition could be encouraged by the Trump administration to sign a deal that would gradually reduce Canada’s share of the U.S. market to between 27 per cent and 28 per cent over several years from its 31.9 per cent share last year.
A spokesman for Foreign Affairs Minister Chrystia Freeland declined to comment on “rumours until a deal is reached that is favourable to both sides.” The U.S. Lumber Coalition also said it wouldn’t comment on speculation.
U.S. producers would likely demand that they keep all duty deposits paid to date as compensation for 18 months of free trade since the past softwood agreement expired in 2015, Mr. Patel said. Canadian producers received back 80 per cent of their deposits in the 2006 softwood lumber agreement.
The quota would likely be divided among provinces based on their historical share of the U.S. market, Mr. Patel added.
A similar deal rejected by the industry about 10 days ago would have capped Canada’s share at 31 per cent in the first six months, with that falling to 29 per cent over the next 12 months until it were to reach 28 per cent in early 2022.
A source close to the negotiations said the two sides were on the verge of a deal until some elements in the U.S. industry balked.
The person who spoke on condition of anonymity because he was not authorized to speak about the talks said there is little chance now of a softwood deal in place before NAFTA negotiations begin next month, with the Canadian and U.S. governments now eyeing September as the earliest date for a softwood deal to be finalized.
Paul Quinn of RBC Dominion Securities Inc. said information that there was a deal in the works is credible, based on his discussions with contacts in the sector.
“But until you get a deal it’s all just talk,” Mr. Quinn said from Vancouver.
“I’m more in the camp that it’s going to be longer than earlier,” he said. “If they don’t get anything done by Aug. 16, really this sits on the back burner until they get NAFTA done.”
Source: Globe and Mail
Wood craftsmanship on wheelsAttention: Serious mountain-bikers - If you've been reading closely over the years you'll remember that the passionate team at Red Stag Timber have had several RENOVO wooden mountain bikes made for them. Well, just for a bit of a twist the Oregon craftsman, Ken Wheeler, who makes them has just showcased a fat-tyre version of his cycling masterpieces.
Wood has remarkable engineering qualities. It’s light, strong, withstands lots of stress, and, perhaps most notably, has vibration-damping abilities several times that of steel or carbon fibre. It’s also highly damage-resistant, incredibly simple to repair, and renewable as a resource. That it’s also beautiful doesn’t hurt.
Plus, the idea of a wooden bicycle is as old as the bicycle itself. The first bicycles back in the early 1800s were all made from wood, as were the first planes, boats, and cars. Today, modern manufacturing techniques are giving the material new purpose.
Renovo, founded ten years ago by Ken Wheeler, a former airplane engineer, makes road, commuter, and mountain bikes. All are made almost entirely from wood, with the exception of aluminium inserts in the head tube, bottom bracket, seat tube, and custom rear dropouts.
What’s the Fat-Ash?
Designed for versatility, responsiveness, and reliability, the hardtail Fat-Ash is intended to be a do-anything mountain bike. Designed around the 27.5-inch wheel with plus-size tires, it can also accept 29ers.
At 68.5 degrees, the Fat-Ash’s head-tube angle is just right. Climbing tight switchbacks is possible, yet the angle is relaxed enough to inspire confidence during fast descents. Medium-length chainstays make lifting the front wheel off the ground easy but also keep it planted while attacking steep climbs. A relaxed seat-tube angle puts weight over the back tire for better control at speed. The bottom bracket sits low in the frame, but pedal strikes are rare. This is a Goldilocks bike—it’s just right.
Test ride report (lucky buggers!)
Bicycles are the premiere example of functional art. And nowhere is there a more beautiful bike frame than those made by Portland, Oregon–based Renovo Hardwood Bicycles. Can wood work as a mountain bike? We spent two weeks on the Fat-Ash 27.5+ to find out.
Buy and Sell
... and finally ... a bit of light relief
Short, sharp and sweet:
A mate of mine recently admitted to being addicted to sniffing brake fluid. When I quizzed him on it he reckoned he could stop any time!
I went to the cemetery yesterday to lay some flowers on a grave. As I was standing there I noticed 4 grave diggers walking about with a coffin, 3 hours later and they're still walking about with it. I thought to myself, they've lost the plot!!
I was at an ATM yesterday when a little old lady asked if I could check her balance, so I pushed her over.
I start a new job in Seoul next week. I thought it was a good Korea move.
My neighbour knocked on my door at 2:30am this morning, can you believe that, 2:30am?! Luckily for him I was still up playing my Bagpipes.
And finally - you can't argue with this one, statistically, 6 out of 7 dwarves are not Happy. (Think about it ... for a minute)
That's all for this week's wood news.
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