WoodWeek 6 October 2021
This week, we’re pleased to announce for the first time a long overdue tech event for the forest industries: our Residues to Revenues 2022 Conference. As we’ve covered in recent issues, interest across the region has really ramped up with significant investments being made by large scale industrial operations converting their heat or energy plants from burning fossil fuels across to renewables, including biomass. This event is aimed at those producing or looking at supplying, harvesting or collecting woody biomass, forest slash, logging residues and stump wood, principally from wood harvesting operations. Also, those that have surplus wood wastes from sawmilling and wood manufacturing operations are going to be involved.
Details on business models for aggregating bio-fuels regionally to ensure a consistent and ready supply and quality to the end user along with technologies best suited to harvesting, handling, transporting and drying bio-fuels will be covered as part of this new event. Details on our March 2022 event, including practical workshops on in-field chipping innovations and wood fuel quality requirements being sought by major heat plant operators running in Rotorua, New Zealand on 9-10 March 2022 can be found on the event website.
We hope you enjoy this week’s SnapSTAT. It shows export log market percentages have changed over time. Thanks to our feature sponsors - Chainsaw & Outdoor Power and Oregon.
As is common in our forest industries around the world, we’re a pretty practical lot. More evidence this week from an experienced log trucker in Quebec who seems to have made a step change in fuel savings by getting stuck in doing testing on his own trucks. You can just hear him saying something like, “If you want the job done right, you may as well get in and do it yourself”. He is Larry Bolduc, a truck driver In eastern Canada with a quarter century of experience in logging truck operations has launched another business called Électrocamion, to convert forestry or mining trucks into hybrid diesel-electric vehicles, whether they are new or existing Like many inventors before him, Bolduc first tested his mechanical concepts in his own truck.
Meanwhile our forestry assets are keenly sought after internationally as another international transaction brings Wenita Forest Products completely under New Forests’ management.
Looking to carbon news, courtesy of Carbon Match, we note that NZUs have continued to hold above the $64 mark this week albeit on lighter volumes. NZUs finished up September on Carbon Match at $64.50.
COP in or COP out? - In the run up to the Glasgow climate summit, COP 26, we are watching closely to see what emerges from Cabinet in terms of a revised "Nationally Determined Contribution" for New Zealand.
As the Carbon Match team has highlighted in plenty of other updates, New Zealand's current NDC, committed to back in 2016, is widely understood to be insufficient, with the MfE providing advice over 18 months ago that it was incompatible with staying within a 1.5 degree pathway, and the Climate Commission also subsequently calling it out as incompatible with that goal.
New Zealand is not alone in our shortcoming. Current committments and contributions from countries look to be far off the ambitions set out in the Paris accord. Last month Climate Action Tracker released a report, which, along with countries including Canada, China, Brazil, Australia and Japan, labelled New Zealand's policies, targets and actions overall as "highly insufficient".
This week we have for you:
Champion Freight Log Export Market UpdateThis week we've got our monthly update from the team at Champion Freight. For the month ended August our log exports to China saw shipments soar by 33 percent, compared to August 2020, taking overall log exports up a solid 27 percent from the same month year. Looking to other export destinations, logs to South Korea were up 16 percent for the month vs Aug 2020, while shipments to Japan were down 38 percent.
Looking to the annual statistics, our chart shows total log export values to China to for the year to end of July are up a whooping 47 percent year-on-year contributing to overall log exports lifting by 40 percent across all export markets. Log exports to South Korea were up for the year by 19 percent while volumes while logs to Japan were down 6 percent and India took 56 percent less over the past year.
FIEA: New Forest Residues ConferenceFor New Zealand and Australia, it’s been over 8 years since a wood residues programme has been run by FIEA showcasing new innovations around harvesting, bio-fuel handling and transport technologies.
Because of the huge interest being shown right now by forest owners and wood harvesting contractors in extracting wood bio-fuels to supply the ever-increasing demand from large industrial scale heat or energy users, a wood residues event, Residues to Revenues 2022 has been set up to run in Rotorua, New Zealand on 9-10 March 2022.
In addition to case studies of early adopters of in-field chipping and delivery systems, successful operations being employed from outside this region will be showcased along with some innovative business models that have been adopted elsewhere to ensure suppliers of bio-fuels are able to provide a timely and consistent quality fuel to end larger end users.
This well overdue event is aimed at forest owners and managers, logging and wood transport operators who are looking right now at opportunities of extracting and processing forestry slash and logging waste from their wood harvesting operations along with sawmilling and wood manufacturing companies who are exploring options to better utilise their wood waste streams.
The event will include a one-day conference, a pre-conference in-field chipping technology showcase where new and emerging technologies for processing forest slash, logging residues and stump wood will be outlined by major equipment suppliers from around the world and a post conference workshop run by the Bioenergy Association of NZ. In this, further details on quality and delivery requirements for wood fuels to larger scale industrial heat and energy plant users will be discussed.
Further details will follow but early information including the planned programme can now be found on the event website, www.woodresidues.events
Minister Mucks in for New EucalyptsForestry minister mucks in to help plant first of a new generation eucalyptus tree - Wearing gumboots and with his sleeves rolled up, Minister of Forestry and Regional Development Stuart Nash dug a hole under the Friday sun in the Awatere Valley, planting the first of a new generation of genetically improved eucalypts.
The planting marked a new phase of the New Zealand Dryland Forests Initiative (NZDFI) which aims to grow naturally durable hardwood eucalypt on drought-prone land, providing an alternative to imported hardwoods and treated pine.
The initiative is a collaborative project between the Marlborough Research Centre, New Zealand School of Forestry, Vineyard Timbers, Proseed, Marlborough District Council and Marlborough Lines. The NZDFI's aim is to establish 60,000 hectares of genetically superior, durable eucalypt planting stock in New Zealand between 2020 and 2050, in up to 12 regional wood supply catchments.
Over 1000 hectares have been already planted across the country and about a dozen people host trials in Marlborough. Seddon sheep and beef farmer Warwick Lissaman, who hosted the Minister’s visit on Friday, started planting eucalyptus in 2013 on his 400 hectares property.
Even more about NZFRI >>
Contractor Designs Fuel Saving Logging TruckQuebec trucker designs a hybrid forestry truck that consumes up to 15% less fuel - Larry Bolduc has been a truck driver for more than 25 years and is now the head of the family business Transport Raoul Bolduc in Girardville, Quebec, Canada.
He also launched another business in parallel, called Électrocamion. The business plan is to convert forestry or mining trucks into hybrid diesel-electric vehicles, whether they are new or existing.
Like many inventors before him, Bolduc first tested his mechanical concepts on himself, or on his truck, we should say. His massive Kenworth C500, which he uses every day to transport freshly felled trees to processing plants, became his hybridisation laboratory.
Loads of 150 (imperial) tons and more - In an interview with Transport Routier, he explains that an all-electric engine was not an option for very heavy off-road transport. And when we say very heavy, we’re talking about a gross vehicle weight of between 150 and 160 tons. “You’d have to have a trailer full of batteries,” he says to illustrate the commercial non- viability of an all-electric truck that carries its payload in battery weight.
On the other hand, he mused, backing up an electric motor with a diesel engine could make the latter consume less fuel when a power surge is required, such as when climbing a hill. And the good thing about a slope you climb is that it inevitably comes down on the other side, allowing the batteries to be recharged through regeneration.
This regeneration also provides an estimated 240 hp of braking force, reducing wear on the service brakes as well as the engine brake. “You hardly ever use it, except when you have a really steep grade,” he says of the engine brake.
Photo credit: Electrocamion
SnapStat - How has Log Export Market Share Changed
Lift in Log Train FrequencyNapier To Wairoa Log Trains Now Running Weekdays – Growing demand to get Hawkes Bay logs to port will see KiwiRail increase its log trains so they run every weekday, KiwiRail Chief Operating Officer Todd Moyle says. The Government invested $6.2 million to re-open the weather-damaged Napier to Wairoa rail line, with log trains running on weekends since late 2019. The trains run from a log hub in Wairoa to the Port of Napier. From Monday, 4 October KiwiRail will begin running log services every weekday.
“Our log trains have become a vital link in the region’s forestry supply chain, helping reduce the number of heavy log trucks on regional roads that were never designed for them,” Mr Moyle says. “Harvest volumes in the Hawke’s Bay region are predicted to exceed 4 million tonnes per annum over the next five years, so there is a clear demand for rail.
“With harvests now beginning in more forests around Wairoa, our log trains are really coming into their own. Each weekday service will consist of around 23 wagons. Over the course of a year, that’s removing the need for more than 10,000 truck movements - reducing congestion, road maintenance costs and improving road safety between Wairoa and Napier.”
“Given trains have 70 percent fewer carbon emissions per tonne carried compared with road, we are also doing more to reduce transport emissions.”
Lyttleton: Log Lift Contributes to ResultsLyttelton Port Company profit increases, emissions decline 19% - Lyttelton Port Company’s Net Profit after Tax for financial year 2021 was $16m, $7.5m better than the Statement of Intent target and an improvement of nearly $6m over the underlying operating profit of the previous year. In the first full year of the Leading the Way strategy, part of which is focused on delivering sustainable profitability and a fair return to shareholders, LPC’s return of equity improved from 2 percent to 4.4 percent.
“It’s been a year of change and success for Lyttelton Port Company, as we continue on our path to greater profitability, a diverse and inclusive culture and operating as a sustainable business. While we’ve faced considerable challenges in an operating environment that has remained uncertain, LPC and its people have performed well,” said LPC Board Chair Margaret Devlin. LPC CEO Roger Gray said the result had led the Board and Management to make the decisions to pay a performance bonus to all LPC staff.
“LPC will pay a performance bonus of $500 to all current LPC staff who worked for LPC from before 30 June 2021, in recognition of the contribution everyone has made to the success of LPC this year,” Roger said.
Trades proved resilient, with the predicted exception of Cruise. Overall two- way trade rose slightly in total value to $10.4b, with exports down less than a percent and imports rising nearly 4 percent. Despite the extremely challenging container supply chain, volumes showed only a slight decline overall with total TEUs down 1.7% to 438,343 TEU. This container volume, while roughly in line with the previous year, was achieved with fewer vessel calls as a result of delays elsewhere.
Log volumes increased by nearly 50 percent year on year, after the disruption of lockdown the previous year combined with a fall in export demand in FY20. Fuel came back strongly, with a 3 percent increase in volume, and the car trade exceeding predictions with a 17 percent increase in volume over financial year 2020.
Carbon: International ETS UpdateGlobal Carbon Markets, Prices, and Linkages to the Forestry Sector - Carbon markets can be split into two categories: the compliance markets and the Voluntary Carbon Markets (VCM). Compliance markets were initially started under the UNFCCC Kyoto Protocol (2005-2020) which introduced three market-based mechanisms: Emission Trading (ET), Clean Development Mechanism (CDM), and Joint Implementation (JI).
The 2015 Paris Agreement, ratified in 2016 brought more tools to the markets such as green financing and trading in green bonds. In addition to these systems, a significant number of countries have implemented a carbon tax.
The World Bank, which serves as the main source for the data presented in this article, bundles carbon taxes and emission trading systems under the compliance markets and call the remaining markets “Carbon Crediting Mechanisms”.
These mechanisms are further split into international (CDM and JI), independent (e.g. Verified Carbon Standard (VCS) and Gold Standard, and domestic (e.g. Australia Emission Reduction Fund, ERF). This article will mainly focus on the Emission Trading Scheme (ETS) markets and the current linkages to forestry. The ETS concept is also known as the cap and trade (CAT) system.
Source: Margules Groome
Wenita Forest Products Ownership ChangesTwo pension funds acquire New Zealand forestry asset from Sinotrans - Two European pension funds, APG Asset Management (APG) on behalf of its Dutch pension fund client ABP, and UK’s Pension Protection Fund (PPF), have agreed to purchase Sinotrans New Zealand Limited’s (Sinotrans NZ) shareholding in Wenita Forest Products Limited (Wenita).
Wenita is the largest producer of timber in Otago, New Zealand, across almost 30,000 hectares of sustainably managed forests. With a history spanning three decades, Wenita is widely recognised as one of the premier softwood plantation assets in New Zealand.
Under the agreement, the two investors will acquire the 62% share from Sinotrans NZ. A New Forests- managed fund, the Australia New Zealand Forest Fund 2 (ANZFF2), has owned the other 38% shareholding since 2018. The agreement will bring total ownership of Wenita under New Forests’ management.
Headquartered in Sydney, New Forests is a global forestry investment manager offering high-impact strategies in sustainable forestry and related sectors. Since its inception in 2005, New Forests has earned a reputation for its value-adding asset management approach and has a track record of sustainably managing forestry assets in Australia, New Zealand, Southeast Asia and the United States. Mark Rogers, Senior Managing Director, Australia, New Zealand and US, at New Forests said, “Wenita is a well-managed, mature asset of scale with strong cash flows, and in a region with domestic distribution and access to export markets. New Forests’ continued involvement with Wenita’s management team will help identify new ways to add value to the business including implementation of our sustainable landscape investment approach. Having the support of investment partners, who have invested with us for many years, means our interests are strongly aligned.”
Hans-Martin Aerts, of APG Asset Management Asia, said, “We are pleased to partner with PPF and New Forests to acquire a controlling interest in Wenita. This investment is a great fit with our sustainability strategy and will contribute to ABP’s commitment to the UN Sustainable Development Goals. Wenita is a large-scale sustainably managed forest company with all its plantations being certified by the Forest Stewardship Council (FSC). We look forward to working with our partners to ensure a long-term, stable and sustainable investment return for our clients.” Lea Dubourg-Hrachovec, from the Pension Protection Fund said, “Wenita is the fourth addition to our growing program of direct investments into sustainable, FSC certified forestry assets globally. What attracted us to Wenita is its long-established operational track record, mature, high quality forest portfolio with a close proximity to the deep-sea port of Chalmers, which makes it a very highly prized forestry asset in New Zealand. We believe Wenita has a great long-term potential and we’re very excited to be part of its future alongside our partners APG and New Forests.”
There will be no significant changes to Wenita’s employees following the acquisition. All commercial terms are confidential.
Enough serious news ... got time for a laugh?
I’m at the hospital now, waiting to see a cardiologist …
I went round my mates house earlier and the first thing he said was, "make yourself at home"...
So I threw him out … "I hate having visitors"...
I once got into so much debt that I couldn't even afford to pay my electricity bills.
They were the darkest days of my life.
… And then alcohol said to me, “Put that on Facebook, it is hilarious!”
But alcohol was wrong, so very wrong.
See you again next week.
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