world news - 21.11.2007
Forest glut jams timber mills
Brian Trott, finance manager for local government authority
Environment Bay of Plenty, said there is a year's backlog of timber at
mills such as Kinleith. Forestry investment adviser Roger Dickie said deforestation was causing "a massive glut". Forestry and land owners are seeking to avoid charges that apply for
each tree that is not replanted, Trott said. Each hectare of trees
felled and not replanted attracts a carbon charge equivalent to 800
tonnes of CO2, said Forest Owners Association environment spokesman
Peter Weir. With the government and industry talking about carbon costs of
between $25 and $30 a tonne from next year, companies face a bill of up
to $24,000 a hectare, Weir said. He estimated the wood processing backlog was six months to a year, providing ample incentive to fell now. The logjam of timber isn't good news for Carter Holt Harvey, which is seeking to sell its New Zealand wood processing business. First NZ Capital analyst Andrew Mortimer said logs were a perishable
commodity and sap stain was a particular problem. The log glut wouldn't
help the sales process. Another cause of the excess felling is the rush by landowners to convert to dairy production. Canterbury and the central North Island are ideally suited to dairy.
Weir said it's no surprise the clear felling has occurred in these two
regions. "There are long-term log supply issues for Canterbury," he said. "A
lot of the stuff has just been ripped out of the ground. Contractors
moved into areas targeted for deforestation and these logs just got
pulled up and burnt." Wood Processors Association chief executive Peter Bodeker confirmed
mills faced a big backlog from the clear felling but was unable to
provide details of wood volumes. "We have had deforestation, no doubt about it. It's not an insignificant amount felled." The logjam at mills "could be three months or six months or a year", he said. However, Bodeker contended the primary reason was conversion to dairy, not carbon charge avoidance. While land suited to pastoral applications was being denuded, areas
more suitable for forestry, such as Nelson and Napier, were being
replanted, he said. Dickie said the felling has "created an artificial depreciation of
the market" at a time when forestry was already under pressure. Forest owners are leaving the market, he said, partly because of
government policy, particularly the failed attempt to "confiscate"
forest carbon credits. It was too late for a policy fix. "The horse has bolted; most of the
work has been done", he said of the felling. It will take years to
attract investors back, Dickie claimed, but "people will start planting
for dual purposes, to harvest the carbon credits". New Zealand needs a carbon sink, said Bodeker, and the industry
needed to work hard to ensure it had a viable forestry and wood
processing sector. He is also concerned about the upcoming impact of
further carbon charges. Mills are high energy users and businesses are
worried at the impact of those charges and on electricity prices. "We've already picked a lot of the low-hanging fruit in terms of energy savings. We use a lot of biofuel."
Clear felling in Canterbury and the central North Island has
created a massive backlog at pulp mills as forestry and farm owners try
to avoid carbon charges which come into effect on January 1.
See also:
- — Indonesia will need 7 years to stop illegal logging
- — Wooden peripheral equipment from Japan
- — September was bleak for B.C. manufacturing, forestry sectors
- — Swedish sawmills see signs of slowdown
- — EU directive urges stop for new deciduous forests in Denmark
