Friday Offcuts 5 February 2021
The suggested pathway forward will involve major changes. Amongst those impacted of course will be New Zealand’s forestry sector. Throughout the report there’s a repeated theme of caution against the over-reliance on forestry units. Read into this, reliance on production or pine forestry. Comments on the report so far point to further announcements on significant increases planned in permanent indigenous afforestation. Early commentary on forestry issues raised as part of the report are contained in an Open Letter penned to the Commission earlier this week and comment on the role that plantation pines will have in meeting the country’s climate targets.
In a victory for the Australian industry this week, the Federal Court has thrown out the case that the Bob Brown Foundation (BBF) had lodged against the Tasmanian government, the federal government and Tasmanian state-owned forestry corporation, Sustainable Timber Tasmania late last year. In addition to Tasmania, they’d indicated that they planned to use this case to mount similar legal challenges to the Victorian, NSW and WA RFA’s. The court’s decision provides a strong endorsement of Australia’s sustainable native timber industry and the environmental laws that currently exist to regulate forestry operations. In addition to the court decision, Forest & Wood Communities Australia has also formally requested prosecutions of the BBF this week by the work safety regulator, WorkSafe Tasmania, for the protest actions on Tasmanian timber harvesting coupes last year (further details below).
This week saw the first monthly issues of www.harvesttech.news, www.foresttech.news and www.woodtech.news go out to industry for 2021. We already have some 15,000 subscribers - and growing weekly - so if you’re not already receiving them, click on any of the three links here to sign up. They’re free.
Following on from the huge response to the ForestTECH 2020 event late last year (physically in Rotorua, New Zealand and virtually, world-wide), we’ve now also been able to build in 50 short video clips into the Video Showcase section of the ForestTECH.News newsletter. They’ve just been made available this week and can now be accessed and used by anyone interested in or involved in forest resource management, remote sensing, GIS, mapping, data collection and inventory management. This resource will be added to, along with tech articles and stories relevant to this particular audience, throughout the year. On that note, enjoy this week’s read.
This week we have for you:
Climate Change Commission report releasedNew Zealand’s independent Climate Change Commission has released its draft package of advice to Government on the steps the country must take to drastically reduce greenhouse gas emissions and address climate change. Public consultation on the draft advice begins on Monday 1 February and runs until Sunday 14 March.
Commission Chair Dr Rod Carr says the advice is ambitious but realistic and makes a clear case to Government for taking immediate and decisive action on climate change. "As a country we need transformational and lasting change to meet our targets and ensure a thriving Aotearoa for future generations.
"The good news is that our analysis shows there are technically achievable, economically affordable and socially acceptable paths for Aotearoa to take," he says. "But the Government must move faster - and support business, agriculture and community to do the same.
"The Commission has spent the last year working on what is now the most comprehensive strategy Aotearoa has for reducing its emissions and impact on the climate. "There are a few actions that are critical to meeting our targets: electric vehicles, accelerated renewable energy generation, climate friendly farming practices and more permanent forests, predominantly natives," Dr Carr says.
The New Zealand Government Press Release responding to the release of the report can be read here
Details on how to make a submission or hear more from the Commission about its work can be found on its website www.climatecommission.govt.nz.
The draft advice is now open for consultation until 14 March. Final advice will be released before 31 May. Once the final advice has been received, the Government will respond with an Emissions Reduction Plan before the end of the year, which will set out how the first three emissions budgets will be achieved.
Federal Court dismisses Bob Brown Foundation’s caseTasmanian environmentalists have lost a case that sought to end native forest logging in the state, but may launch an appeal.
Known as the “great forest case”, the Bob Brown Foundation lodged the challenge against the Tasmanian government, the federal government and Tasmanian state-owned logging corporation Sustainable Timber Tasmania in the Federal Court last year.
The foundation said a win would have helped protect the habitat of the critically endangered swift parrot. It argued Tasmania’s regional forest agreements were “fundamentally flawed” and failed to meet the standards of national environmental laws.
Regional forest agreements are legal arrangements between states and the Commonwealth under the federal Environment Protection and Biodiversity Conservation Act, which is currently under review.
They allow for the logging of native timber on public land if certain conditions are met, like protecting endangered species and biodiversity, but have been heavily criticised as ineffective by environmentalists.
In the case’s December hearing, barrister Ron Merkel, QC, on behalf of the foundation, argued the regional forest agreements were not enforceable as they damaged the purpose of legislation that aimed to protect the environment, native species and prevent extinction.
On Wednesday the Federal Court ruled against this argument, dismissing the application and finding the Tasmanian agreement did constitute a regional forest agreement under the act. Environmentalist and former Greens leader Bob Brown said the judgment was a setback, but the foundation was considering an appeal to the High Court and other legal action.
Sustainable Timber Tasmania in a statement this week said that they welcomed the decision of the Federal Court in the legal challenge of the Tasmanian Regional Forest Agreement. We regard this as a strong vindication of Sustainable Timber Tasmania confidence of the Regional Forest Agreement and Tasmania’s world class Forest Practices System in providing protection for threatened species and other important forest and land values while enabling important forest production.
Forest & Wood Communities Australia Director Kelly Wilton said the Court’s decision reinforced the fact that timber harvesting under the RFAs was sustainable and not the risk to the environment activists would have us believe.
“The court case was purely a publicity stunt designed to attract donations and membership to the Bob Brown Foundation which needs $750,000 just to pay its staff and costs,” she said. “They have created a business out of catastrophising sustainable timber production and destroying the livelihoods of regional Tasmanians and the communities where they live.
Source: SMH, STT and FWCA
Australasia's major sawmilling event - interested?Plans are now well underway for Australasia’s major sawmilling event, WoodTECH 2021. Despite major woodworking tradeshows, exhibitions and conferences throughout Europe, North America and Asia been cancelled in 2020 and stops already being put on most shows well into 2021, we’re confident, that WoodTECH 2021 will run this year in New Zealand and Australia on 3-4 August. In fact, it’s expected to be one of few that will be run in 2021 – anywhere around the world.
For over twenty years now, the Forest Industry Engineering Association (FIEA) has provided Australasia’s only regular independent platform for local sawmilling and wood manufacturing companies to meet, to network and to learn about new innovations in technology and smart operating practices that can be used to improve their productivity and performance.
The WoodTECH series was re-jigged in 2017 to alternate every year between green-mill and dry-mill operations. After a decade of national training programmes falling over, saw-doctors groupings folding, mill closures and consolidation within the industry, local wood producers were keen on getting their teams together again at one central location in New Zealand and Australia. The WoodTECH series very quickly became THE sawmilling and wood manufacturing event for local mills and key suppliers into this part of the industry, both locally and internationally.
So how it is going to be run?
You’ll notice that the dates are the same. Because of the uncertainty still surrounding international travel, for the first time WoodTECH 2021 will be run concurrently in both Melbourne, Australia and Rotorua, New Zealand on 3-4 August 2021. For the first time, sawmillers and wood producers will be able to meet up in different countries – with live links being set up between the two meetings and remote links set up for key tech providers from outside the region.
Again, for the first time, WoodTECH 2021 is going to be live streamed for those mill staff and key tech providers from outside Australasia. This is going to enable overseas delegates to participate by either watching the event live, or access the recorded presentations later.
What’s being covered?
In short, any operation associated with green-mill operations. This includes saw design, maintenance and operation, wood scanning, sawmill optimisation, saw alignment and size control, preventative maintenance, kiln drying and on-site energy management, wood wastes utilisation, timber treatment ….
Early details on WoodTECH 2021 can be found on the event website.
So, if keen this year in presenting (as a wood producer or tech supplier) as part of the WoodTECH 2021 series in August 2021, please contact firstname.lastname@example.org BEFORE Friday 12 February.
Note: Information on opportunities for exhibiting will be advertised and sent out in the next couple of weeks. Early expressions of interest can be made directly with email@example.com
Forestry Corporation congratulates former staffA tireless advocate for the south west slopes softwood plantation industry and the ecologist who discovered Australia’s largest known roost of Eastern Horseshoe Bats are the two former Forestry Corporation of NSW staff who have been awarded the Medal (OAM) in the General Division in the Australia Day honours.
Forestry Corporation Acting CEO Anshul Chaudhary congratulated recipients Peter Crowe, who has spent many years managing and advocating for the softwood plantations and timber industry around Tumut and Tumbarumba (featured in last week’s issue), and Alf Britton, who worked as an ecologist in the State forests of the Hunter and Central Coast. “We are incredibly proud of the achievements of Peter Crowe and Alf Britton and congratulate them on their well-deserved honours,” Mr Chaudhary said.
“Peter and Alf made remarkable contributions to forest management both during their careers at Forestry Corporation and beyond. “Alf Britton had a long career with Forestry Corporation as a surveyor, forest foreman and ecologist. As foreman he supervised and helped manage plantation establishment and sustainable harvesting operations in the Watagan Mountains, hazard reduction, fires, plantation thinning and road and bridge construction projects. His passion was always forest ecology which is where he spent the final part of his career.
“Alf has the distinguished honour of having discovered Australia’s largest known roost of Eastern Horseshoe Bats. He discovered the roost in 1996 during field surveys of Ourimbah State Forest.
“This discovery and subsequent work to protect and monitor this colony not only ensured the population continues to thrive today, but also made a significant contribution to scientific knowledge and management of this species. “Alf played a pivotal role in establishing the Friends of Strickland volunteer group, a group of committed volunteers that has improved conservation in Strickland State Forest. This has also served as a model for community partnership that has been replicated in State forests elsewhere, delivering great benefits to the forest environment.
“On behalf of Forestry Corporation, I would like to thank Peter and Alf for their contribution to the forestry industry over many years.”
Photo: Alf Britton
New cradle containers revolutionise log transportA leading shipping container supplier Royal Wolf and New Zealand’s KiwiRail have jointly developed a bespoke logging container that significantly improves efficiencies and capacity when transporting logs to the Port of Tauranga for export.
The 484 logging cradle cassette containers, built by Royal Wolf’s Intermodal Business Unit, were specially designed as a replacement for KiwiRail’s old log wagons which were designed to only carry logs. The new 20-foot cassette containers can be loaded and secured onto different types of railway wagons to increase compatibility and capacity across KiwiRail’s network.
“We’re problem solvers,” says Michael Horne, Royal Wolf General Manager Intermodal. “We modify containers to meet a company’s specific logistics and transport needs. KiwiRail’s logging cassettes are a perfect example of us tailoring a container solution to help increase efficiencies and capability for a client.”
Royal Wolf worked closely with KiwiRail to develop a prototype container followed by the manufacture of a batch of containers and then the final product. Mr Horne says having the right container is essential to enable logistics companies to maximise loading and capacity for products as they transport freight around the country.
“There are a wide range of commodities and products transported in our containers but coming up with a solution for the safe transportation of logs required a very specific design. The cassette containers are functional but also highly innovative because they are able to be secured to a range of different wagons in the KiwiRail fleet.”
New innovations around log measurement and scaling and wood transport are key themes being explored as part of this years eagerly awaited HarvestTECH 2021 event running in Rotorua, New Zealand on 13-14 April. Full details on programme content can be found on the event website, HarvestTECH 2021
Prosecutions sought for Bob Brown FoundationForest & Wood Communities Australia has formally requested prosecutions of the Bob Brown Foundation by the work safety regulator, WorkSafe Tasmania.
The requests, made under the Work Health and Safety Act 2012 (Tas), are for the reckless and dangerous actions engaged in by the BBF during workplace invasions in Tasmanian timber harvesting coupes in 2020. The submissions, prepared by FWCA Director Kelly Wilton, have drawn WorkSafe’s attention to incidents where there were risks of a serious injury or death, constituting the most serious breaches under the Act.
These include reckless and dangerous actions such as jumping onto heavy harvest machinery while in operation and climbing dangerous trees, including one during high winds. “That tree had a high number of dead branches which are defined in the Forest Safety Code (Tasmania) 2007 as ‘widow makers’,” Ms Wilton said.
“Due to the tree’s species, old age, poor health, high frequency of dead limbs, and likelihood of rot and unpredictable and spontaneous branch shedding, the tree presents a high risk to the safety of anyone climbing or occupying the canopy of the tree. It is extremely concerning that the Bob Brown Foundation would direct and assist someone to climb trees that even the most basic risk assessments would deem too dangerous.”
Ms Wilton said of more concern is that WorkSafe is familiar with these dangerous actions, which continue with increasing regularity, but they refuse to take meaningful action. “The BBF have paid staff who train people, without proper qualification to conduct these dangerous media stunts, seemingly with the blessing of WorkSafe Tasmania,” Ms Wilton said.
“WorkSafe Inspectors witnessed first-hand agents of the BBF jumping onto an excavator while it was in operation. “It is our understanding that following the incident WorkSafe issued a mandatory request for information but the BBF publicly stated that it would not comply – an offence that carries a AU$50,000 penalty. WorkSafe have not taken any further action.”
Ms Wilton said the timber industry is rightly highly regulated and the people employed in it take safety very seriously. “Yet every day workers carry the unfair burden of fear that the reckless actions of illegal protesters will cause them to witness or be inadvertently involved in a tragic death,” she said.
“WorkSafe’s reluctance to act seems to condone the actions of the BBF which continues to make a mockery of the Work Health & Safety laws and the regulator whose role it is to enforce them. The BBF use these media stunts to raise a lot of money to keep their corporate organisation financial, but what price do they and WorkSafe place on a life?”
Vale Jim ParkJim Park sadly passed away in Rotorua on 25 January. A celebration of Jim’s life was held in Rotorua on Thursday. Many of us in NZ forestry circles knew Jim well through our connections to the Forest Research Institute and through the many log quality and sawing studies, particulalrly related to the pruned log resource, that Jim was involved in over the years right across the country.
Jim missed some of the formal forestry academic background but was in no way disadvantaged and had an intellect that earnt the respect of all that encountered him. He brought to forestry an insightful, often visionary and uncompromising research approach.
Most of his work was in providing methods and tools to understand the inherent value of our pruned log resource. His first major achievement was developing the ‘Grade Index’ measure of log quality and this evolved into the Pruned Log Index accompanying rigorous methods of undertaking mill-based log grade studies.
Jim created a considerable body of published papers that will be an enduring legacy. In 1998 he went on to use these tools and his considerable knowledge to embark on a successful commercial consultancy business (Interface) which worked both on and off-shore. Our thoughts go out to his wife Robyn, his family, friends and his work colleagues.
Source: Graham West & Alan Somerville
EWPAA announces new CEOEngineered Wood Products Association of Australasia (EWPAA) is pleased to announce the appointment of Gavin Matthew as Chief Executive Officer, effective 8 February 2021.
Prior to this appointment, Gavin was a Senior Policy Manager with the Australian Forest Products Association (AFPA) looking after the softwood manufacturing sector. Gavin steps into the CEO role previously held by Dave Gover, who leaves EWPAA in a strong position after more than five (5) years of enthusiastic leadership.
Announcing Gavin’s appointment, EWPAA Chair Mr Stuart Toakley said: “Gavin is well known around the industry for his broad knowledge, inclusive leadership style, and a passion for our renewable sector and communicating the benefits of using innovative wood products.”
“The Board looks forward to working with Gavin to ensure EWPAA continues to deliver world-class technical and testing support to businesses producing innovative wood products, trusted product and process certification services, expert standards development, and innovative research and development outcomes.”
Reflecting on his appointment Gavin said, “I am honoured to be given the opportunity to lead EWPAA and excited to continue working in the wood processing sector. It’s a great team and organisation. Wood processing is an industry that produces innovative, reliable, and renewable products that should be recognised as preferred materials in a low emissions future.”
“My clear focus is to promote the many benefits of our renewable wood products, the assurance that comes with EWPAA’s gold standard quality certification programme and strengthen EWPAA’s trusted core businesses while delivering value and effective outcomes to industry.”
Global container shortages explainedExcellent Explanation of the Global Container Shortage and Soaring Rates
Everyone in the global trade of logs and wood products have witnessed rapidly rising ocean container rates along with container shortages in the last few months. We all keep hearing many reasons for this, but it is still somewhat of a mystery to some.
Russ Taylor from Russ Taylor Global recently posted a link sent to him of a very informative video made by the Japanese freight forwarding company, HPS Trade. These two videos help explain the reasons for the container shortages and also that this problem is not likely to be resolved soon. For those in the trade, this may not be anything new, but it is a short and succinct explanation of what has been happening.
It also helps explain why there is likely to some further supply shortages coming in key market such as Japan and China in 2021Q1, and this sets the stage for further price escalation of logs and lumber in 2021-Q1.
Here are the two videos:
Nov 12, 2020: Why there is a serious “Container Shortage” problem in late 2020? (7 minutes)
Dec 13, 2020: Effect of Container Shortage in 2020! Reason why there have been large Ocean Freight increase sand Vessel Delays. (9 minutes)
Source: Russ Taylor Global
Open letter to The Climate Change CommissionSome initial comments after a brief reading of your report:
The Climate Change Commission should be commended for making a very helpful, comprehensive report on such a difficult topic. The Commission is right to state that our long-term focus must be on reducing greenhouse gas emissions. With respect to forestry issues there appear to be a number of unsubstantiated assumptions, however:
1. Forest C storage is said to be “impermanent”. What matters is the total area of New Zealand in forest, not whether or not any particular forest stand blows down, burns or is harvested. If we commit to increasing the total national area of forest and to ensuring that the very small areas that blow or burn down, or those areas that may be harvested, will be re-established, we can enlarge a very stable, permanent C store in forests.
2. Forest is said to be risky because climate change will increase the risk of fires. New Zealand’s forests have long been far more likely to blow down than burn down, and the frequency of forest fires has not yet been shown to have increased in New Zealand. Australia, at similar latitudes to the Sahara and with continental climate patterns, has always been subjected to greater forest fires than us, and our opinions on this matter appear to have been strongly influenced by anecdotes from across the Tasman Sea. This is poor evidence on which to base policy.
3. There appears to be an implicit assumption that native forests are more permanent than exotic forests, and to the extent that exotics tend to be pioneer species from an ecological point of view, this is true for unharvested forests, but the conclusions that we must plant native forests and that these forests will greatly help us reach our 2050 target are flawed. Native forests sequester C very slowly compared to our most productive exotics, and areas of native forest required to have the necessary impact on our C accounts by 2050 are simply too large and expensive for us to contemplate.
There is abundant evidence that we could take advantage of rapid sequestration rates of exotics to fill gaps in our C accounts (these gaps result from a necessarily slow pace of change in greenhouse gas emissions and are acknowledged by the Commission) while gradually transitioning these pioneer exotic carbon forests to later seral stage native forest over many decades. This latter approach would have substantial advantages. It a) is much cheaper, in dollars and in land area required, than directly planting native C forest; b) ensures that forests actually fill the gaps in our C accounts; and c) ultimately provides extra native forest which many of us would like to see, but in a more natural way.
Pines to support climate targetsThe Forest Owners Association says the Climate Change Commission has endorsed the crucial role exotic forestry will carry out in meeting New Zealand’s net greenhouse gas emission targets in 2030 and 2050. But he says some groups, such as the Environmental Defence Society, have misunderstood the relative roles exotics, and a new policy of planting native trees, might play.
FOA President, Phil Taylor, points to the 380,000 new hectares of exotic plantations the Commission anticipates will need to be planted between now and 2035. “These extra trees will be the support act for the Commission’s targets of massive reductions of the overall carbon dioxide emissions from industry and transport. This decarbonisation has to be the thrust of meeting New Zealand’s climate change mitigation obligations.”
“Anything else is delaying solving the problem. Pines are great at buying time, but they don’t cut gross emissions themselves. The trees the Commission has identified are fast growing and so they will sequester carbon at a rapid rate, which the Commission acknowledges. In a rotation forest they maintain that high carbon bank. They also provide an average export return to the landowner for the timber which is above that from farming.”
“This modest area of land the Commission anticipates being planted should put an end to the alarmist and bogus claims, circulating over the past year, about half of New Zealand’s hill country being swallowed up by blanket forestry. That was never going to happen. In light of the Climate Commission’s prediction clarifying this, we’d expect to see the government dropping its proposed restrictions on conversion of farmland to forestry.”
“There is no takeover. Landowners should make their own decisions about farming or forestry, and what species of trees they want to plant.” Phil Taylor says if the government sets out to have 300,000 hectares of native trees planted by 2035, it will suit highly erodible and remote land which might be better not to harvest.
“But the carbon sequestration rate of native trees is not ‘superior’ as the EDS is saying. Pines and eucalypts lock up carbon much quicker. That is a well-established fact. There will be very little carbon locked up in these slow growing indigenous trees, even by the New Zealand zero-carbon deadline of 2050.”
“They are very much an investment for subsequent generations. By the end of the century there will be a substantial carbon bank in these native trees, and perhaps some timber available from them by that time. Planting and protecting indigenous trees is a labour-intensive process, and so the government will be providing plenty of welcome jobs in weed clearance and pest culling in remote areas to ensure the new plantings survive.”
“There will also need to be work helping those indigenous trees cope with climate change. Some trees, such as nikau, pukatea and ribbonwood don’t tolerate droughts well.” Phil Taylor says in the short term the plantation forest industry will be available if the Commission’s formula doesn’t meet its targets over the next five to ten years.
“Governments around the world have most often failed to meet climate change targets. If, for instance, the Manapouri electricity doesn’t become available for the national grid, then there might be a need for a large volume of reasonably rapid carbon lock up. Exotic trees can deliver on this, and that is without the cost of reverting to buying expensive carbon credits from overseas, or asking the taxpayer to make up the difference.”
Phil Taylor says FOA looks forward to making these points at the upcoming consultation on the recommendations.
Source: Forest Owners Association
Retrospective: The NZ Forest Products of oldAs a new generation of land is converted from farming to carbon-farm tree plantations, former NZ Forest Products Kinleith mill manager Ashley Wilson looks at what and who brought down the once-mighty business.
The 1980s were incredible for New Zealand, politically and economically. At the start of the decade, I was working for the largest company in the country, NZ Forest Products, as its man in Wellington, keeping finance companies, investment analysts, the Government and the Opposition informed of its activities and plans.
By the end of the decade, Forest Products no longer existed. To understand what went wrong, it pays first to know something of the company’s history.
NZ Forest Products was established in 1936 to exploit the huge forests of pinus radiata sown on the Central Plateau of the North Island up to and during the Great Depression. Under entrepreneur David Henry, sawmills and the wallboard mill in Penrose, Auckland, were established, followed in 1953 by the start of pulp- and paper-making operations at Kinleith in the South Waikato.
Forest Products lost its status as New Zealand’s largest company by market capitalisation in 1981, when Fletcher Holdings and Challenge Corporation merged to form Fletcher Challenge.
That decade was characterised by a number of company bites of other enterprises, and takeover offers. Some examples:
- Fletcher made a grab for Carter Holt
- Caxton tried to buy UEB
- Goodman Fielder bid for Wattie’s
- Wattie’s countered with a bid for Goodman Fielder
- Forest Products formed strong links with Australian paper company APM, now AMCOR.
- Forest Products took 40 percent of UEB
- Alex Harvey Industries bought into Carter Holt to form Carter Holt Harvey.
- Fletcher Challenge was prepared to spend $1.5 billion to take over Forest Products.
There was a good reason for companies to take aim at Forest Products. At that time, we had more than 150,000 hectares of planted forests. In our balance sheet, these were valued at cost. Our accountants argued that since a forest could be destroyed by disease or fire, this was a conservative position to take. However, there had never been a serious fire or threat of disease, and one analyst suggested the then share value of $4.42 could really be as high as $8.
Forest Products was doing well. We were a major producer for the local market as well as being an exporter, so we were getting export incentives. We made 250 grades of paper because we were protected by import licensing. Customers in New Zealand had to use our products; once a year, we told them the new price they would have to pay!
But farmers were complaining to the government that industry was getting a financial advantage over them and feared good pastoral land could be lost to forestry. As well, New Zealand’s export incentive scheme was under fire from GATT, the Geneva-based multilateral General Agreement on Tariffs and Trade.
Everything changed in 1984. At that time, I was manager of the Kinleith mill, which employed more than 3300 people. It was election year, and in keeping with our tradition, we invited both the Prime Minister, Rob Muldoon, and the Leader of the Opposition, David Lange, to speak at lunchtime meetings. Muldoon was the first to visit. He gave an outstanding address, and despite the workers being mainly Labour supporters, there was no booing.
Lange, when he visited, received an enthusiastic reception, and went on to score an emphatic victory at the polls. But his new government was immediately faced with a currency crisis, and the incoming Minister of Finance, Roger Douglas, floated the dollar, phased out export incentives and moved to sell state-owned enterprises.
NZ$50 is not a carbon price capDomestic carbon prices in New Zealand could go above $50 a tonne even if the new cost-containment reserve is triggered. A new auctioning regime due to start in March was test-driven last week with two dummy auctions involving about 50 participants and 1000 transactions.
NZX’s Shane Dinnan, who is running the project, says it went smoothly, but there seems to be confusion among some in the market about how the systems pricing will work. Legislation enabling the auctions has been interpreted as setting a minimum price of $20 and an effective maximum price of $50, because if bids get that high, an extra seven million units will be released into the system.
The CCR replaces the fixed-price option that lets emitters pay the Government $35 for each tonne of liable emissions instead of surrendering a carbon credit. It is set at seven million units a year, which means that once it is exhausted, there will be no more until next year.
Dinnan is confident the system will be up and working well before the first real auction, on March 17. The NZX-European Energy Exchange joint venture that is running the scheme is awaiting sign-off from the Ministry for the Environment, and hopes the platform will be live in mid to late February.
However, Cabinet’s decision just before Christmas to include a technical reserve price in the first live auction means some changes to the system will be needed, Dinnan said.
Source: Carbon News 2021
Buy and Sell
... and one to end the week on ... breaking it gently
A man goes on vacation and asks his brother to watch his cat. He calls home and asks how things are and his brother tells him the cat is dead.
We welcome comments and contributions on Friday Offcuts. For details on advertising for positions within the forest products industry or for products and services, either within the weekly newsletter or on this web page, please contact us.
Copyright 2004-2021 © Innovatek Ltd. All rights reserved