A transformation plan to move forestry’s focus from logs to high-value wood products will nudge it up the ranks in export earning values if its goals become reality in coming years.
So said Minister for Forestry Stuart Nash at the launch of the forestry and wood processing Industry Transformation Plan (ITP) at Fieldays.
He hailed it as an aspirational document providing a roadmap that includes lifting the sector’s export earnings for value-added wood products by $600 million by 2040.
With its broad cross-industry support from processors, iwi and politicians, Nash said, the plan is not “some document dreamt up by the Beehive”.
“We are talking about a concept not of volume, but of value,” he said.
He outlined the plan’s key initiatives, which include diversifying away from pinus radiata to alternative types, to account for 20% of plantings by 2030.
At present only about 10% of New Zealand’s exotic plantations are non-radiata. The plan sees planting as a means to improve the sector’s resilience to climate change and to reduce the biological risk of monocultural plantations.
Another initiative is to invest in research identifying how the use of wood products can be increased in mid-rise and commercial construction.
At present about 1.4 million cubic metres of wood products are used in construction in NZ every year, and the plan is to lift this by an additional 400,000 cubic metres a year by 2030.
The plan also aims to have overall wood processing increase by 3.5 million cubic metres, or 25% by 2030, significantly scaling up domestic processing of underused lower grade logs and reducing the number of unprocessed logs exported.
The plan aims for the sector to help reduce national emissions by becoming a source of low-carbon bio-alternatives to coal.
This includes providing over 16 million tonnes of wood fuel to replace coal, producing alternative fuels for transport, and providing 50 million cubic metres of wood biomass to replace 9 billion litres of fossil fuels.
Ray Smith, director-general for the Ministry for Primary Industries welcomed the ITP’s launch as critical to the sector’s future.
“MPI is keen to grow and support some of what we have lost over time from the sector,” he said.
He was optimistic about prospects for NZ’s wood-processing sector, looking across the Tasman at forecasts that Australia will be increasing its wood product imports from 16% to 30% by the end of the decade.
“Forestry is now sitting alongside horticulture, but exports can grow from $6 billion a year to over $11b by the end of the decade,” Smith said.
Marty Verry, CEO of Red Stag Timber, NZ’s largest timber-processing company, said the plan is a good initiative, but there are some significant hurdles for the sector to clear to recognise greater value.
“The biggest hurdle for processors will be getting the value of stored carbon returned to processors, the same way the value of grown carbon has been returned to foresters, transforming that sector in the process. Foresters are selling logs and carbon, but processors are only selling wood.”
The processing sector continues to face significantly subsidised offshore processors capable of paying a premium for raw logs from NZ.
“Meantime steel and cement, heavily emitting wood substitutes, continue to receive NZ carbon units. We are effectively having our competition subsidised.”
Longtime forestry consultant Dennis Neilson said he is wary of the ITP’s plan to increase the variety of species grown for forestry.
“My experience is that most wood baskets around the world will only have one, maybe two species,” Neilson said.
“NZ is talking about diversifying away from [pinus radiata], the most productive, fast-growing timber in the world. We should be coming back to that, back to doing what we do well.”
He was also concerned about the plan’s failure to address a forthcoming slump in NZ’s timber harvest, with volumes predicted to drop from about 35m cubic metres a year to 25m cubic metres in only a decade’s time.
“I would have liked to have seen more focus on getting more trees in the ground,” he said.