Friday Offcuts – 5 February 2010

This week we have for you:

• So, who's buying NZ carbon credits?
• Tasmania's forestry plan launched
• Log fumigant links with disease unfounded
• Penola pulp mill scheme gets extension
• HOLTEC awarded 2010 supplier of the year
• Timberland firm given early warning on forestry assets
• Canada pledges $292.5M for bio-technologies
• New Victorian Timber Industry Strategy
• New Zealand log exporters on a roll
• CHH cutting jobs at plywood operation
• New carbon reduction scheme for Australia?
• Oldest living tree found in Sweden
• Australian pellet plant correction
• The potential cost of a major forest biosecurity breach!
• Jobs
• Used Eqt
• Buy and Sell
• ...and one to end the week on....working with the police

So, who's buying NZ carbon credits?

New Zealand sold more than 1.5 million Kyoto carbon credits offshore last year, and bought just over 400,000 from other countries. Ministry of Economic Development figures show that the vast majority of the New Zealand credits sold went to Europe.

Norway was the biggest purchaser, buying 540,281 AAUs (Assigned Amount Units), including 520,000 tonnes sold by forestry company Ernslaw One in July bought by the Norwegian Government to help to offset the country's Kyoto liability.

The next largest purchaser was the United Kingdom. A total of 500,338 credits were transferred to the UK registry, made up of 401,000 CERs (Certified Emission Reduction units from Clean Development Mechanism projects), 98,338 ERUs (Emissions Reduction Units from Joint Implementation projects), and 1000 AAUs.

Two hundred and forty thousand ERUs went to the Netherlands, 60,000 went to Japan, with France taking 45,911 and Austria 29,641. Switzerland was another a large purchaser of New Zealand credits, taking 94,570 ERUs and 30,170 AAUs.

The United Kingdom was the only country to buy New Zealand Kyoto credits in 2008, when 15,000 CERs were traded.

Source: Carbon News 2010

Tasmania's forestry plan launched

The Tasmanian forest industry has outlined a plan that includes AU$2.1 billion of private investment to ensure its future viability and success. The New Forest Industry Plan aims to double to AU$4 billion the annual contribution the industry makes to the state's economy each year and increase jobs in the sector by up to 1000.

The blueprint to guide the industry through a major change in resource - from native forest to more plantations - included a AU$365 million investment in new harvesting and transport machinery, a AU$225 million engineered strand lumber mill and a AU$25 million wood pellet plant.

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Log fumigant links with disease unfounded

In an article in last week's issue of Friday Offcuts we ran a story on methyl bromide and a call by the Council of Trade Unions for it to be completely banned in New Zealand. The CTU said that as evidence mounts that it's putting worker health and safety at serious risk. The forest industry came out this week with a media statement saying that renewed concerns that the fumigation of logs and lumber might be linked to motor neurone disease (MND) have no scientific basis.

"Methyl bromide gas is obviously toxic at the doses used to fumigate logs. But outside fumigation envelopes or containers it poses no risk to the public or to wharf workers who follow normal safety procedures," says Stakeholders in Methyl Bromide Reduction spokesperson Gordon Hosking.

Dr Hosking was responding to media reports of research by a PhD student at Canterbury University that showed a reaction when methyl bromide was mixed with glutathione, a protective chemical found in living cells. "The research supervisor, toxicology professor Ian Shaw, has said the findings do not prove that motor neurone disease and methyl bromide are linked. But the possibility that they might has alarmed maritime and wharf workers," he says.

"No-one knows what causes motor neurone disease. So it is understandable that family members and fellow workers should see possible exposure to the gas as an explanation for cases involving workers at sites where fumigation is carried out."

"Their concerns were fully investigated in an official enquiry five years ago and no link was found. Further reassurance comes from more recent investigations by the Institute of Environmental Science and Research, Environmental Risk Management Authority (ERMA) and the Ministry of Health that also found no link," Dr Hosking says.

Glutathione is a chemical produced in all living organisms to protect cells from damage by the chemicals that occur in the environment. "Permanent cell damage only occurs in real life when excessive exposure to a toxin overwhelms glutathione and the body's other natural defences. This does not happen to workers in our ports because gas levels in working areas have been shown to be well below levels that might cause harm."

Methyl bromide is used at some ports to fumigate logs and lumber for export and some imported food products, such as garlic from China and grapes from Australia. Internationally it is the most widely accepted biosecurity fumigant, because it is effective against a wide range of pests and diseases, safe when used correctly, and does not harm the treated produce. However, because it damages the planet's ozone layer, the hunt is on world-wide to find alternatives," Dr Hosking said.

"We are making progress. China, our largest export log market, accepts in-ship treatment with phosphine. But India and several other important markets still insist on methyl bromide fumigation before shipment from New Zealand."

The forest industry and MAF Biosecurity are working with scientists and researchers in other countries who are exploring alternative treatments, including many that don't involve chemicals of any sort. "In the meantime, however, we have no alternative but to continue using methyl bromide as it is so effective in keeping our country protected against biosecurity pests and enabling our valuable exports to be accepted overseas," says Dr Hosking.

Penola pulp mill scheme gets extension

The South Australian government has given Protavia a three year grace period before it must start building a new pulp plant in the state's Penola district.

In 2007, the state government passed a special bill allowing the 770,000 tonne/yr bleached chemi-thermomechanical pulp facility to be built without being subject to normal planning rules. Some parts of the original license were due to expire this year, but have now been extended to 2013. A spokesman for the South Australian government said the state is giving the project every opportunity to succeed because it is expected to create some 150 jobs.

Protavia originally intended to start commercial production on the facility early last year, but the AU$1.5 billion project hit delays due to funding problems. ANZ backed out of the scheme in 2008 and Protavia is still trying to organize financing.

Construction has not begun yet, but the company said it is confident that funding will be sorted by the end of the year and construction work will start immediately after. The company is now hoping to start up the facility in late 2012. Source: RISI

HOLTEC awarded 2010 supplier of the year

Austrian Holzkurier and Timber-Online editorial staff recently announced HOLTEC as the supplier of the year 2010 to the wood products industry. The company as well as servicing the sawmilling industry (delivering 250 log handling systems to the sawmill industry) is also involved in supplying equipment to the engineered wood products and panel industries.

Timberland firm given early warning on forestry assets

The government of Queensland, Australia, is under fire for having told U.S.-based timberland company Hancock Timber Resource Group (HTRG) its thinking was open to possibly selling the state's forest assets in April 2008 - almost a year before a decision was made, the Brisbane Times reported on Monday.

Critics said the state government kept secret before the March 2009 election that it planned to sell off AU$15 billion in assets, including the state's forestry business. Unions have run an ongoing campaign attacking the privatization plans, aiming to have the policy reversed, reported the Brisbane Times.

Queensland Treasurer Andrew Fraser, government officials and representatives of HTRG met in April 2008, according to an email released Monday under Right to Information laws. During that meeting, Fraser told HTRG representatives that "thinking on forestry was not closed," according to the email.

Indicative bids on the sale of Forestry Plantations Queensland are expected by the end of the month. The e-mail indicated HTRG had expressed very keen interest in being able to acquire Queensland forestry assets, the Brisbane Times reported. Source: www.forestweb.com

Canada pledges $292.5M for bio-technologies

The Canadian federal government pledged $292.5 million on Monday to help Canada's sagging forestry sector develop renewable energy from biomass. The announcement came the same day the Forest Products Association of Canada (FPAC) released a study saying the industry needs to make dramatic changes in order to remain viable.

Integrating Canada's traditional lumber operations with bio-fuel and bio-chemical production would protect thousands of forestry jobs could potentially produce as much power as nine nuclear reactors, FPAC said. An integrated mill - one that produces wood, pulp or paper as well as bio-energy and bio-materials - would also provide five times as many jobs as a stand-alone operation, the study found.

The industry currently employs 270,000 Canadians but it shed 50,000 jobs after the economic downturn led to a collapse in global demand for lumber and paper. Forestry is an approximately $65 billion a year industry and represents nearly 2% of Canada's Gross Domestic Product. "This new integrated model will cause investors to take a fresh and more optimistic look at the economic potential of Canada's forest products industry," said Don Roberts, managing director at CIBC World Markets and leader of the FPAC study. Source: Tree Frog Daily Forestry News

New Victorian Timber Industry Strategy

The new Victorian Timber Industry Strategy was launched in December 2009. Of interest to bioenergy stakeholders is that the new strategy supports the use of native forest wood waste for energy production, consistent with the Federal government's expanded renewable energy target scheme. The strategy also prioritises research to explore the potential use of wood for biofuels; especially 2nd generation biofuels.

The new strategy can be downloaded here

Source: Bioenergy Australia Newsletter January 2010

New Zealand log exporters on a roll

One of the (few) remarkable things happening recently in the global forest products industry has been the astonishing expansion of both the number of players and the volume of log exports from New Zealand.

New Zealand forest owners started shipping logs to Japan in the late 1960s, but for decades exports were restricted by government policy (from Government forests) and by domestic log demand. However, when the Government sold its forests to private interests in the 1990s both the volume and market spread increased.

Total log exports increased from 1.3 million cubic metres in 1980, to 1.9 million cubic metres in 1990 and to 5.9 million cubic metres in 2000.

A surge in Korean log demand in the first decade of the new century lifted exports up to a peak of 7.8 million cubic meters in 2002, but total exports had then fallen away to less than 7.0 million cubic metres in 2008, before a major surge hit the sector in 2009.

Total 2009 exports should be more than 9.0 million cubic metres. Of this more than 50% will be shipped to China. In contrast, the demand from Japan has fallen away to less than 10% of total shipments.

The log export boom has attracted a growing number of exporting companies. The industry now has at least 16 companies plying the trade. This compares with only about 5-6 log exporting companies left on North America's West Coast.

Several new-entrant Chinese companies are now in the game. The very high prices bid for some stumpage sales in late-2009 raised eyebrows, with conjecture that Chinese economic stimulus package money is behind such bids, and with volume more important than price.

In early 2010, some New Zealand sawmills report log shortages as the log export boom continues. But, knowing China, it can stop as fast as it started.

Source: 2010 New Zealand Forest Products Industry Review, www.dana.co.nz

CHH cutting jobs at plywood operation

Carter Holt Harvey told workers at its Nangwarry plywood manufacturing plant in SA late on Monday of their decision to shed 130 jobs by 26 March this year. This is after the company cut 90 jobs at the plywood plant last year. Unions are calling for state government support.

New carbon reduction scheme for Australia?

Australia's plan for the world's most comprehensive emissions scheme appears dead in 2010, hurting investment plans for businesses wanting carbon clarity. Australia's opposition unveiled a rival carbon reduction plan on Tuesday that's going to go head to head with the government's proposed emissions trade scheme, already rejected twice and presented a third time to parliament. Rudd's scheme is more than likely going to be rejected a third time in coming weeks.

This week the Australian opposition has been able to capitalise on voter unease over the government's climate change plan by offering a simpler alternative. The Opposition leader has promised to cut emissions by 5 percent through incentives and direct action, supported by a new AU$3.2 billion fund.

Oldest living tree found in Sweden

The world's oldest known living tree, a conifer that first took root at the end of the last Ice Age, has been discovered in Sweden, researchers say. The visible portion of the 4 metre-tall "Christmas tree" isn't ancient, but its root system has been growing for 9,550 years, according to a team led by Leif Kullman, professor at Ume

Australian pellet plant correction

We reported last week that Plantation Energy Australia is constructing a wood pellet plant at Wandilo, near Mount Gambier in South Australia with production expected to begin in March 2010. Whilst successful in obtaining a permit to build a wood pellet plant, the company has told us that no announcement has yet been made about construction commencement or likely production commencement. In an update, it has been reported that planning assessors with Grant District Council had approved the development on Monday but the council came out a day a later to say that a number of Wandilo residents had lodged an appeal with the Environment, Resource and Development Court and a hearing has been scheduled for 10 February. We apologise for this mistake and will be providing further updates as announcements on the new plant are made.

The potential cost of a major forest biosecurity breach!

Mountain pine beetle has killed more than one billion trees in British Columbia and once thriving forestry cities are facing a new prospect as ghost towns; Korea has banned log imports from Chile because of the perceived threat of a newly discovered Phytopthora that causes disease in radiata pine.

Scion researchers have calculated that the potential impact of major Asian log trade bans, triggered by a biosecurity threat, would lead to the loss of NZ$11 billion in the present value of NZ growers' revenues. Clearly, the potential financial risk of biosecurity breaches to the NZ forest industry is very significant.

While a major biosecurity breach may seem as inevitable as the outcomes of playing with a loaded gun, there are many ways to reduce the risk and to mitigate the impacts. Unlike Australia, New Zealand does not have a forest industry biosecurity plan and has been criticised for not being well enough prepared for the eventuality of a major biosecurity breach, either as it would impact our forests or impact our trade.

The NZ Forest Owners Association and MAF are planning to run a Forest Biosecurity Workshop on 23-24 February 2010 to address this issue, developing a more formal partnership between MAF and industry, and initiate the development of a New Zealand forest industry biosecurity plan. For more information check out www.nzfoa.org.nz or contact billdyck@xtra.co.nz or paul.stevens@maf.govt.nz

Jobs

Used Equipment

Buy and Sell

...and one to end the week on....working with the police

A middle aged man bought a brand new Holden Monaro. He took off down the road, pushed it up to 130 kmph,and was enjoying the wind blowing through his (thinning) hair.

"This is great," he thought and accelerated to an even higher speed. But then he looked in his rear-view mirror, and there was a Police Car behind him, blue lights flashing. "I can get away from him with no problem" thought the man and he floored it some more, and flew down the road at over 210 kmph to escape being stopped.

Then he thought, "What the hell am I doing? I'm too old for this kind of thing" and pulled over to the side of the road, and waited for the Police car to catch up with him.

The Policeman pulled in behind the Monaro and walked up on the driver's side. "Sir my Shift ends in five minutes and today is Friday the 13th.

If you can give me a good reason why you were speeding that I've never heard before, I'll let you go." The man looked back at the Policeman and said, "Last week my wife ran off with a Policeman, and I thought you were bringing her back."

Policeman said, "Have a nice day."

And on that note, have a great weekend. Cheers.

Brent Apthorp
Innovatek
PO Box 904
Level Two, 2 Dowling Street
Dunedin, New Zealand
Ph: +64 3 470 1902
Fax: +64 3 470 1904
Web page: www.innovatek.co.nz


This week's extended issue, along with back issues, can be viewed at www.fridayoffcuts.com