WoodWeek 21 November 2018
Alongside that announcement last week, Regional Development Minister Shane Jones has confirmed a $1.9 million loan from the Government’s Provincial Growth Fund to Taranakipine. CEO Tom Boon said most of the money will be used to upgrade processing plant technology for producing more value-added engineered timber panels.
This week in market news we have the most recent results from the regular Scion Log Price Outlook as well as an update showing the dramatic drop in export log shipments from Australia over the past year.
WoodWeek subscribers HOT TIP: Heads up if you have business interests in the Pacific Northwest! Once again in partnership with the team at Logging & Sawmilling Journal, this we are launching our 3rd HarvestTECHX Conference – running on 12-13 March in Vancouver 2019. The event sold out last time it ran in BC in 2016. See https://harvesttechx.events/ for details. There are a few sponsorship or exhibition stands available too, but they are selling fast. An in-forest workshop on the day after the conference and organised by our event partners at the BC Forest Safety Council is also available to limited numbers of people attending our conference.
MBIE has recently released figures that illustrate wood fuel is the cleanest energy consumed for process heat in New Zealand, by a huge margin. The data indicates that replacing fossil fuels with wood energy could drastically reduce greenhouse gas emissions, while it lists electricity as the third largest emitter of GHGs. On that theme it was good to see Fonterra’s Brightwater milk processing plant in Nelson is now co-firing on wood. The site’s newly converted boiler was officially switched on by the Minister of Energy and Resources, Hon Dr Megan Woods late last week. Let’s hope we see more backing for good wood initiatives like this from our political leaders again soon.
Finally, a new report shows rural landowners are finally waking up to a weed which covers 1.8 million hectares of the country. Their chainsaws are out, but they’re also supportive of “novel approaches” to managing wilding pines. To highlight the scale of the problem and the need for a comprehensive plan to attack it, Scion researcher Jonathan Dash gave a presentation at our ForestTECH conference last week in Rotorua on how they are using technology to measure and plan a solution to the rapid spread of wilding pines.
This week we have for you:
Taranaki: Agreements secure industry futureChina Forestry Group NZ (CFGNZ) is once again backing local wood processing with a ground-breaking agreement on harvesting and processing wood from Taranaki’s largest forest.
China Forestry Group NZ and Taranakipine sawmill in New Plymouth have signed a supply agreement today that supports long term wood processing in New Plymouth and employment for the 170 workers at Taranakipine. It’s another initiative that demonstrates China Forestry Group NZ’s ongoing commitment to New Zealand.
Forestry Minister Shane Jones – who strongly supports the private forestry sector collaborating for the benefit of New Zealand – was also in attendance.
“This is exactly the sort of cooperation we need to see between our overseas- owned forestry companies and New Zealand sawmills,” Shane Jones says. “I’m pleased that China Forestry Group NZ and Taranakipine have been able to reach this agreement and I commend both parties for their commitment to our forestry sector – for regional development and employment benefits.”
The agreement will see China Forestry Group NZ supply minimum monthly volumes to Taranakipine over the long term and at agreed pricing.
Te Wera forest is very steep in parts, requiring specialist equipment and personnel. So, to help with harvesting, China Forestry Group NZ negotiated an agreement with Northland harvesting company Stokes Logging to relocate part of their crew capacity and business to Te Wera.
“The partnerships with Taranakipine and Stokes Logging are a material demonstration of China Forestry Group NZ’s ongoing commitment to New Zealand and how forestry owners and local processors can better work together,” says Steve Walker, Chief Operations Officer of China Forestry Group NZ.
China Forestry Group NZ will underwrite the cost of Stokes Logging relocating with a take-or-pay commitment to 100,000 tonnes per year for seven years, to December 2026. This commitment will see a number of families move to Taranaki with their moving costs covered by China Forestry Group NZ.
“These agreements are based on mutually beneficial commercial outcomes. At the same time, we appreciate that we have an important role to play in the New Zealand forestry industry as a supportive and understanding partner to local operators and as kaitiaki of the natural and cultural resources entrusted to us,” Steve Walker says.
As part of China Forestry Group NZ’s commitment to achieve Forest Stewardship Council (FSC) certification for all its forests, the Te Wera forest is now fully certified under the PF Olsen Group Scheme for FSC certification. This certifies that the forest management meets the principles of sustainable forest management, including management of social and environmental characteristics of value.
The FSC certification of the forest also has commercial benefits, as many consumers now insist on sustainable sourcing.
Tom Boon, CEO of Taranakipine, says securing supply from an FSC certified forest was a key concern for Taranakipine.
“This agreement with China Forestry Group NZ will secure FSC log supply. Now we can grow our markets in New Zealand, Australia, Europe and the US with wood products from sustainably managed, renewable plantation forests,” says Boon.
“Locally, it means secure employment for our 170 staff. And, of course, the new agreement re-establishes our historic commercial relationship with Te Wera forest.”
Taranakipine was specifically founded in 1982 to process the first commercial harvest from Te Wera and had a strong ongoing supply from the forest for many decades.
Australia: Export log shipment trendsAustralian report on export sawlogs and export pulplogs - Reported total sales* for export sawlogs by volume have decreased by 19 percent while the tonnages for export pulplogs decreased by 33 percent since the previous reporting period.
(* Note: Sawlogs are measured in cubic metres and pulplogs in tonnes.)
Source: KMPG Australia Pine Log Price Index Report for July - Dec 2017 (APLPI Jun 18 - Stumpage Public Final)
China: Asian first for plantations conferenceInternational Congress: "Plantations - a way to achieve green development." The 4th International Congress on Planted Forests (ICPF) was held in Beijing from 23 to 25 October 2018. This is the first time for the ICPF to be held in an Asian country.
The theme of the conference was "Plantations - a way to achieve green development", with 4 topics: genetic resources and breeding, multi-objective management of plantations, timber, fibre and non-wood forest products, forest policies and social economics related to plantations.
The Congress aimed to investigate the contribution of planted forests to green development in the context of global challenges.
Topics included the sustainability of planted forests in the context of changing climates and the future role of planted forests in bio-resources sustainability, environmental protection and green development.
Scion Log Price Survey resultsScion Log Price Outlook - In August, seventy-three people from various parts of New Zealand’s domestic and international forestry products supply chains participated in this outlook. These participants represent a substantial component of the NZ forestry industry. In contrast to the three previous outlooks, longer term log price outlooks remain stable, with no associated expectation of increase after 6-12 months. This may reflect the relative stability seen in the log prices over the past year.
Somewhat more participants expect little immediate adverse movements in log prices (the mean is -2%) for the first time in twelve months. The same respondents anticipate a stable future pricing regime and volumes are also expected to be relatively consistent with perhaps a 2% increase in a year time.
Most of the respondents and forest growers do not expect any impact of the 1 Billion Trees Policy on their business in this year.
China and other export markets are always in the focus of the respondents, however, from a focus on the domestic market and oil prices in May the attention has shifted to the USA-China trade war and the possible consequences.
Figure 1: Wharf log price outlook (A Grade is used as a general proxy)
To access previous outlook reports please click here.
If you operate a business anywhere along the forestry products supply chain then please consider casting your vote in our November Outlook. All information is treated as confidential and results are reported anonymously and at an aggregated scale only. The Outlook will be shared exclusively with participants in December and will only become available publicly in January.
Please participate before Friday 30 November.
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Jones: PGF loan for Taranaki PineThree years ago Taranaki sawmiller Tom Boon was unsure if his company Taranakipine would have a secure log supply over the long term following a change of ownership of Te Wera Forest, in east Taranaki. Boon’s doubts were put to rest this week when China Forestry Group Corporation (CFG), which bought the 3500 hectare Te Wera Crown Forest licence in 2016, signed a seven year agreement to supply 100,000 tonnes of logs to Taranakipine.
The agreement was boosted by a $1.9 million loan from the Government’s provincial growth fund. About $1.8m of the loan would be spent on buying a new German-made fully automated processor to manufacture laminated floor and ceiling panels for export at the company’s Bell Block site, north of New Plymouth.
Scientists stress forests connectionScientists Highlight Forests’ Critical Role in Climate Mitigation - In response to the IPCC Special Report on Global Warming of 1.5°C, 40 scientists released a statement that describes five reasons why limiting global warming requires protecting and sustainably managing existing forests and restoring lost forests. They stress the connection between the future of forests and the planet’s future climate.
The Climate and Land Use Alliance released a statement from 40 scientists that argues that the preservation, restoration and sustainable management of forests is critical for limiting the global temperature rise to 1.5°C above preindustrial levels. In response to the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5ºC (SR15), the scientists highlight five reasons why limiting global warming requires protecting and sustainably managing existing forests and restoring lost forests.
First, the scientists emphasize that the world’s forests “contain more carbon than exploitable oil, gas and coal deposits” and that “avoiding forest carbon emissions is just as urgent as halting fossil fuel use.”
According to the statement, forests store enough carbon to release over 3 trillion tons of carbon dioxide.
Further, the scientists point out that climate change makes forests more vulnerable, especially to wildfires, calling for further caution.
Second, the scientists highlight the role of forests in removing carbon dioxide from the atmosphere through photosynthesis, which keeps “climate change from getting even worse.” Forests remove 28 percent of the carbon dioxide emitted into the atmosphere each year, and oceans remove another 25 percent, leaving the remainder in the atmosphere.
NZ’s super-sized weed problemA new report shows rural landowners are finally waking up to a weed which covers 1.8 million hectares of the country. Their chainsaws are out, but they’re also supportive of “novel approaches” to management.
The invader is not gorse, blackberry or Scottish broom. It’s wilding pines spread by seeds from plantation forests and shelter belts.
Unlike their well-groomed plantation parents which contribute $5 billion a year to GDP, wilding pines are worthless with harvest often costing more than the wood is worth.
There are 100,000 more hectares of wilding pines than there are of plantation pines and the wind-blown seeds are populating an additional 90,000 hectares a year. Without intervention, wilding pines could cover 20 percent of New Zealand by 2035.
For farmers, wilding pines encroach on grazing land and suck water from pasture. For native flora and fauna, wildings are an invading pest, offering little in the way of food for birds and insects, and dropping an acidic carpet of pine needles which native plants can’t regenerate through.
More than $11 million a year is spent on eradication by land managers, government agencies and community trusts around the country.
The report from Landcare Research, which is based on survey results, shows a shift in awareness and attitude from landowners as well as support for the breeding of sterile pines.
In the survey report Landcare Research economist Pike Brown says: “The results clearly show that wilding conifers are perceived to be a serious threat and that individual land owners are a key part of a national strategy for managing wilding conifers across New Zealand.”
The report also shows just 2 percent of those surveyed are involved in a national wilding control programme and 54 percent don’t even know it exists. Most landowners are going it alone and removing wilding pines themselves.
A growing awareness - In 2015 just 25 percent of landowners were aware of wilding pines in their region, which has now increased to 60 percent. Attitudes to wildings have changed too. The 2015 survey found 22 percent of landowners surveyed thought wildings were more beneficial than harmful, now just 7 percent think they have any benefit.
South Island respondents were the most aware of the issue. Federated Farmers North Otago president Simon Williamson said wilding pines were the biggest issue high country faces.
“Rabbits we’ve got on top of since the diseases have come, they were decimating the high country, but wilding pines are the biggest single threat to biodiversity and the outlook of the high country. We’ll end up like Canada if nothing is done while we’ve got the chance.”
Williamson also pointed out another impact. Left unchecked wildings could steal the country’s electricity.
“If they [wilding seedlings] go into trees, in another 10 or 15 years the water loss going down the hydro rivers is equivalent to 53 cumecs, which is a massive cost to the generation industry and New Zealand. It’s probably a quarter of the flow of the Waitaki river.”
The Waitaki hydro station generates enough electricity each year for about 51,000 average New Zealand homes.
A billion trees in a warming worldWhile California smoulders, New Zealand researchers are figuring out ways to reduce the fire risk a billion trees pose in a warming world.
Farah Hancock reports (for Newsroom).
When Tim Curran arrived at Lincoln University from Australia the first piece of equipment he asked for was a barbecue.
He wasn’t planning to throw a prawn on it. The barbecue, purpose-built out of a 44- gallon drum, is essential to the ecologist’s research into the flammability of different plants.
It’s a low-tech tool to understand a growing risk. Climate change means the number of days where the risk of fire is classed as very high or extreme are expected to increase by 71 percent in New Zealand by 2040.
With the One Billion Trees programme adding more fuel to the countryside his work represents the life and death importance of finding the right tree for the right place.
All trees will burn, but some burn faster and hotter than others. Curran’s barbecue weeds out the fierce burners.
“It would be best if you could burn a whole plant, which is fine if you are dealing with a grass, it’s harder for a shrub and it’s pretty much impossible for a tree,” said Curran.
His solution is to burn 70cm shoots in his barbecue.
“That retains the leaves in the architecture they are found in on the plant. It ensures the fuel [shoot] is a bit more realistic as to how it might burn in the field.”
Once on the barbecue, readings are taken measuring how quickly the shoot ignites, how long it burns for and the temperature it burns at.
Typically, the more moisture the plant has in its leaves, the less flammable it is. Another factor is how much oil or resin a plant has.
“In general, pine species are going to be quite high in flammability because they’ve got some of these volatile chemicals. The pine resins and other things you smell when you walk through a pine forest are some of the things that ignite easily in a fire.”
MBIE: Wood cleanest energy sourceThe Ministry of Business, Innovation and Employment has released figures which illustrate wood fuel is the cleanest energy consumed for process heat in New Zealand, by a huge margin. The data indicates that replacing fossil fuels with wood energy could drastically reduce greenhouse gas emissions, while it lists electricity as the third largest emitter of GHGs. So why is the government incentivising electricity through capital funding for projects, while wood fuel is not being robustly promoted?
MBIE and the Energy Efficiency and Conservation Authority have released figures that show wood energy is responsible for just 1% of total process heat emissions whilst producing 23% of the energy consumed. Electricity, however, contributes just 18% energy and still emits 13% of process heat’s total emissions.
MBIE and EECA are working on a process heat action plan to improve the energy efficiency of using process heat and increase the amount of renewable energy used to supply it.
As part of its review process, MBIE has released a Current State Fact Sheet, an overview of how process heat is being used in New Zealand, including energy demands and related greenhouse gas emissions.
Figure 2 of this document shows energy consumption and GHG emissions from process heat in 2016, by fuel type. It provides a graphic representation that wood energy is the cleanest fuel in use for process heat in New Zealand.
As an overview of the sector, in 2016, supplying process heat accounted for around 8.3 million tonnes of carbon dioxide equivalent emissions. That is 28% of all energy-related GHG emissions and the second largest source of energy-related emissions behind transport. The process heat energy demand was 199 petajoules or around 35% of total energy used in New Zealand in 2016. Data provided was sourced from 2016 EECA Energy Use Database, released in 2018.
Energy in New Zealand 2018, also released by MBIE, shows that whilst 80% of the electricity generated in 2017 was from renewable sources, down from 85% in 2016, we still consumed 13 petajoules of coal and gas to generate electricity. Coal-fired generation was up by 16% and gas-fired generation increased 22% to its highest level in five years.
The process heat overview shows the dairy manufacturing sector accounted for around 68% of energy use in food manufacturing. It was the largest user of coal for process heat. Coal accounted for just 11% of fuel consumption, yet produced 26% of total GHG emissions. This ratio is due to coal holding the highest carbon content of any fossil fuel and being more emissions-intensive per unit of industrial output than any other source.
Yet the dairy industry appears to be the sector most serious about fuel switching with Fonterra co-firing with wood chip at its Brightwater site, and a strong case for biomass to be used in combination with electricity at a range of other sites and with other high-value milk producers across the country.
Despite being the sector, which consumes the most energy, wood, pulp and paper manufacturing has relatively very low emissions due to most of its fuel coming from bioenergy sources, such as woody biomass and processing by-products. The sector still used fossil fuels for co-firing boilers, supplementary heating of pulp flash dryers, and heating up drying kilns.
With the data showing that around 55% of process heat demand is still being supplied by burning fossil fuels, it’s time the Government promoted a radical change across industry. Enacting the Productivity Commission’s recommendations and providing incentivisation for reducing emissions in capital projects, no matter the fuel source, is a good place to start.
In an environment where electrification technology is attracting funding from central government, capital projects for proven biomass technology should also be incentivised.
Source: Azwood Energy
Scion Annual ReportScion has issued its annual report for the 12 months ending 30 June 2018 presenting a successful year for the Rotorua-based Crown research institute. New board chair Dr Helen Anderson says Scion strongly believe that forestry, and all that can be made from trees, has great potential to enhance New Zealand’s prosperity, wellbeing and environment in very significant ways.
“Our purpose is highly aligned with many government objectives, such as increasing afforestation and enabling a zero carbon emissions economy by 2050. Scion is also working with Maori to achieve long-term aspirations. Three Maori partnerships involving Scion were supported by the new Provincial Growth Fund,” said Dr Anderson.
A milestone achievement for Scion was completion of the world-first draft assembly of the radiata pine genome, which marked the beginning of a new era of precision forestry for this dominant plantation species.
In other work, Scion found that optimising radiata pine stand density could increase the net value of the plantation estate by $1.7 billion. A newly developed model can predict the optimum final crop stand density for producing structural grade timber. The model will be released later in 2018 for use by forest owners and managers to plan targetted operations optimising stand density and maximising the value of their crop.
Scion’s launch of the New Zealand Biofuels Roadmap in February by the Minister of Energy and Resources was successful in stimulating discussion on domestic large- scale production and use of liquid biofuels among major industry players and policy makers.
Scion reported evenue growth of 9.3 per cent to $56.7 million (budget $54.6 million) provided a net profit after tax of $2.3 million (budget $1.7 million). It positions them well for reinvesting in the construction of an innovation hub and other science and building infrastructure.
“We made great progress during the year on our plans for an innovation hub in the heart of the campus, and we also refurbished dated office areas,” said Chief Executive Dr Julian Elder.
The detailed design for the innovation hub was completed. Construction is set to start in a few months. The innovation hub will be the new entry point to Scion and will include a public cafe and exhibition area.
Wood energy for Fonterra BrightwaterCo-Firing on all cylinders: Fonterra Brightwater Site to Reduce Emissions by 25 Percent - Fonterra’s Brightwater milk processing plant in Nelson is now co- firing on wood after the site’s newly converted boiler was officially switched on by the Minister of Energy and Resources, Hon Dr Megan Woods earlier this week.
The conversion slashes the amount of coal used and cuts carbon emissions at the site by around 2,400 tonnes a year – roughly the same as taking 530 (internal combustion) cars off the road.
Thanks to support from the Energy Efficiency and Conservation Authority (EECA), Fonterra has achieved a significant step in the Road Map to Transition to a Low Emissions Future, developed with the Ministry for the Environment last year.
Robert Spurway, Fonterra COO Global Operations, says the Brightwater boiler conversion is part of Fonterra’s plan to reduce emissions across all sites.
“We’ll take what we learn from this conversion and apply it to our longer-term co- firing strategy for other boilers across the country. Brightwater shows what’s possible when it comes to reducing our reliance on fossil fuels.”
Mr Spurway says curtailing emissions requires a multi-faceted approach.
“We’re serious about meeting our targets to reduce carbon emissions by 30 per cent by 2030 and net zero by 2050 across all New Zealand operations. Achieving them will involve a combination of energy options and energy efficiency gains.”
EECA CEO Andrew Caseley says that this project demonstrates how co-firing can be used now to reduce energy emissions for process heat.
“Co-firing has wide potential for replication with other businesses that use coal boilers, with the ultimate goal of replacing fossil fuels with renewable energy.”
Almost finally ... ABs post-match commentsOver the weekend some very dark clouds assembled (no, not the ones bringing flooding to Otago) as the Irish put the boot in to beat the All Blacks.
Because it generally occurs so rarely, defeat for the All Blacks often sees context lost, with many immediately diving off the deep end. Normally, this would include a barrage of scorching arm-chair criticism debating the parentage of one or more of the match officials, but alas, we appear to have come of age (or the best team won on the day, fair and square).
My 30 minute search unearthed commentary that is almost poetic compared to the usual outbursts ... and it was all from ABs fans. See what you think ... I thought it was intriguing and downright humorous.
On Ireland’s win over the All-Blacks:
"Stop kicking the ball away. Win your set pieces. Stop kicking the ball away. Keep possession. Stop kicking the ball away. Unleash once you have worn them down."
"Good haul from the TAB today, support with your heart, bet with your head ..."
"NZ had the weight advantage in the scrum yet couldn't push the Irish back. The women's team would have provided stiffer opposition. On the rare occasion when the ABs had the ball it was fumbled, dropped or once again simply kicked away into the waiting arms of the Irish. The next trip to the British Isles needs to be treated as work not a holiday camp."
"Bring back Tana, he knows how to beat an Irishman." (Ed - What happened to 'Bring back Buck'?)
"At the moment I'd say David Beckham is doing the organising. Kick, kick, kick."
"For weeks I’ve been saying the emperor has no clothes. The ABs have been dominated by aggressive fast moving defensive lines and have been clueless to unlock them. Barrett has provided no targets for his forwards, sitting in the pocket and shuffling along until all options disappear and then he kicks poorly out of hand. We have been tactically naive, physically beaten and scrapped through against South Africa and England with some individual brilliance and luck. I’ve been criticised for weeks for my comments as in NZ the All Blacks and their coaches are treated as gods who can’t be criticised. The emperor has no clothes it’s time we all realised it."
"The better team won on the day, only saving grace we played so poorly and still only lost by 7."
"It’s easy - Stop kicking the ball back to the opposition ... Ireland are very good at keeping position, as are the All Blacks ... this kicking back has crept into the game very much this year. Just run it."
"Tough pill to swallow, especially with one eye closed."
"The sun will come up tomorrow, bet ya bottom dollar."
Buy and Sell
... and finally ... the serious matter of ...
This had better be ... a laughing matter!
The first judge took the bench while the second stood at the defendant's table, and admitted his guilt. The sentencing judge immediately suspended both the fine and costs.
They switched places. The second judge admitted that he was speeding, too. There upon the first judge immediately fined him $250 and ordered him to pay court costs.
The second judge was furious. "I suspended your fine and costs, but you threw the book at me!" he fumed. The first judge looked at him and replied, "This is the second such case we've had in here today. Someone has to get tough about all this speeding!"
Later that night, the doorbell rang and it was the painter. "What's the matter," asked the homeowner, "did you forget something?"
"Nope." replied the painter. "I'm just here to take your missus out to dinner and a movie like you asked."
That's all for this week's wood news.
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