29 April, 2011

Logging exit grants under fire

Weekly Times via AAP, April 29, 2011

A SCHEME to lure loggers out of Tasmania is under renewed fire over claims companies are pocketing cash to resume logging on the mainland.

One logging company was granted $825,000 in Federal Government exit assistance last year but green groups say it's simply shifted its operations to Gulaga National Park on the NSW South Coast.

South East Forest Rescue says the $17 million government scheme, aimed at downsizing Tasmania's logging industry, is a rort if it allows loggers to simply pull up stumps and go elsewhere.

28 April, 2011

Gunns plantation fires put out

The Examiner, 28 Apr, 2011 04:32 PM

Tasmanian timber company Gunns has announced it would no longer burn its plantation forest floor wood residue from today.

In a statement from the company, it said it would virtually eliminate Gunns' contribution to smoke pollution from this practice.  Company managing director Greg L'Estrange said the change was in response to community and environmental group concerns.

He said the policy would apply to all of its Tasmanian plantations.

23 April, 2011

Forest protests tighten woodchip pressure

Graham Lloyd, Environment editor
The Australian April 23, 2011 12:00AM

NATIVE forest campaigners have stepped up pressure on woodchipping operations in a bid to stop logging in state reserves and force the industry to follow Gunns in Tasmania and restructure around plantation timber.

Mock funerals were held in Sydney and Melbourne this week to mourn the demise of the Leadbeater's possum, Victoria's animal emblem, which is threatened with extinction by the logging of forests to produce Reflex Paper.

Protest groups in NSW seized on the release of the South East Fibre Exports accounts for the Eden chip mill to argue that the industry was marginal financially and that forest operations were environmentally unsustainable.

Conservation groups have also put their case to federal Environment Minister Tony Burke, and Climate Change Minister Greg Combet to stop logging and have native forests included in an emissions trading scheme.

NSW forest campaigner Harriett Swift said the South East Fibre Exports financial accounts showed the Japanese-owned Eden mill had dramatically increased its forest harvest to maintain a small profit.

The profit from NSW woodchips was still less than the loss recorded by taxpayers in supplying the timber through Forests NSW, Ms Swift said.

The company, which employs 75 people, said demand for the company's products waned in the first half of the year and then recovered strongly in the second half. The high value of the dollar had also reduced profitability.

Accounts lodged with the Australian Securities & Investments Commission for last calendar year show South East Fibre exported 1.03 million tonnes of woodchips (up 29.6 per cent) to make a profit of $4.33 million (up 11.4 per cent).

In 2007, the company exported a similar quantity of woodchips, 1.07 million tonnes, but made more than twice its latest profit, $9.06m.

"The problem is made worse by the fact that official figures from Forests NSW show that the productivity of the forests has also been steadily declining, with bigger areas of forest being logged to produce the same amount of wood," Ms Swift said.

"This all means that SEFE must export more and more chips to get the same financial return."

Counting up the carbon captured

Paddy Manning
Sydney Morning Herald, April 23, 2011

Redd Forests, a little company 20 per cent-owned by the Kathmandu founder Jan Cameron, is proving that threatened native forest in Tasmania can have more value standing than if it was logged, by generating carbon credits from it.

Next week the first 55,549 verified carbon units approved in this country, each representing a tonne of greenhouse gas emissions saved, will pop up on a register maintained by the Verified Carbon Standard in Washington.

The units would be worth about $600,000 at current market prices of about $15 each, because 15 per cent are withheld as a buffer by VCS to cover risks including fire, pest and the chance that some owners will log the forest at the end of the 25-year project.

The units are owned by Peter Downie, a sixth-generation cattle and sheep farmer from Tasmania's central highlands, who for the past 40 years has also logged his private native forest for sawlogs and woodchip - much of it sold to the forestry giant Gunns.

Downie paid $130,000 to Redd Forests to generate the verified carbon units by analysing and monitoring the carbon to be stored on 7666 hectares of his own land, which otherwise would have been selectively logged or converted to pasture.

It's not the highest conservation value forest on his property - that's already protected by a voluntary covenant, part-funded by the federal government. But the forest stores carbon nonetheless and, purely by fluke, the value of each tonne of carbon is about the same as the price of a tonne of woodchip.

"It's pretty much line ball," Downie told GBiz, but that's for now. Downie reckons the value of a tonne of carbon is going to rise significantly, unlike a tonne of woodchip.

For the first few years Downie will sit tight as he collects his verified carbon units - they will roll in each year, after a validator checks his forest is standing.

At the end of 25 years Downie could choose to log his forest completely - even after pocketing the units generated over that period - and get a premium for the mature eucalypt timber (he's got Forest Stewardship Council certification for that). But his plan, for now, is only to harvest the forest growth that occurs after the project finishes.

You would expect Downie to be enthusiastic about Redd Forests - he was impressed enough with the business model to buy into the company and has joined the board. But, with the federal government's Carbon Farming Initiative starting in July and verified carbon units likely to be saleable under the National Carbon Offset Standard, it is easy to see the potential contribution such carbon credits could make to tackling climate change.

The managing director of Redd Forests, Stephen Dickey, believes the model could be introduced nationally, even, potentially, to include public land. VCUs generated here should attract a market premium, he says, because they are "risk-free … this is Australia doing it, not the Congo".

The campaign director of GetUp!, Paul Oosting, who was until recently closely involved in Tasmania's forest negotiations and helped steer the Gunns campaign for the Wilderness Society, says carbon credits could help save much of the private native forest around Australia.

The threshold for proving that the forest is threatened, he says, is not onerous. Inclusion of land in a regional forest agreement, for example, would be enough. "You just need to demonstrate the possibility of logging.''

Oosting says conservation of private native forest is often neglected.

"Typically it's much more difficult because obviously the government isn't going to wade in and stop farmers and landholders doing what they want on their land. Money has been available to put covenants on property, but that doesn't really appeal to farmers and landholders whereas this approach provides another income stream, an opportunity to diversify their properties."

Over the past two years Stephen Dickey has brokered six similar deals in Tasmania covering 22,000 hectares. This week he was close to inking a seventh, taking the total to 25,000 hectares.

His aim is to get 150,000 hectares of native forest under management by the end of next year. That will save an estimated 1 million tonnes of greenhouse gas a year, roughly equivalent to the annual emissions of more than 75,000 homes.

After almost four years slogging away, it is only in the past month that Dickey and his team have been able to start selling verified carbon units and earning commission.

"It's an arbitrage between the price of pulp and the price of carbon," he says. "All we ever do is take the merchantable volume of timber they would take off their land, based on historical logging patterns, and we generate the equivalent carbon credits for that. You can manage it, you can thin it. The only thing you can't do is log it. We can say to the farmer, 'Hold on to your asset; let it grow into a really valuable hardwood timber'."

Downie sees carbon credits ushering in a new phase of the forests debate, which has shifted from rampant exploitation to locking forest up, as native forest logging became "politically incorrect".

Next up, he says, we will see a shift from green to ''orange … you harvest from natural resources but ensure your productive base and ecological base is maintained or improved.

"The green agenda has been presented as the be all and end all, but it's just a stepping stone.

"Forests can create enormous wealth. The argument should be not whether you harvest native forest or not but how you do it. A well-harvested native forest is superior to a plantation."


Twitter: @gpaddymanning

02 April, 2011

Timber decline `inevitable' Triabunna operations suspended

The Examiner, 02 Apr 2011

Tasmanian timber company Gunns this week shut its last two major woodchip mills in a move described yesterday as the inevitable decline of the industry.
Gunns notified the Australian Securities Exchange yesterday that it would suspend woodchip operations at its Triabunna mill for eight weeks from the middle of this month.

A Gunns spokesman said that between 40 and 50 workers would be affected by the temporary shutdown.

The news came the day after the company shut its woodchip mill at Long Reach permanently, with the loss of about 50 jobs.

The Tamar Valley mill has been gradually scaled back since its closure was announced last year.

This came after Gunns shut its Hampshire woodchip facility.

Gunns managing director Greg L'Estrange told the ASX that the Triabunna closure had been in response to the volatile nature of Japanese markets since the earthquake in that country.

Australian Forest Contractors Association Tasmanian spokesman Ken Padgett said that those left in the industry in Tasmania would feel both moves keenly.

He said that many of the 74 contractors remaining after government exit packages had planned to relocate south to work at the Triabunna mill.

"Members are gutted," Mr Padgett said.

"I don't know how much more they can stand."

Mr Padgett said that the closures were due mainly to a Tasmanian industry made uncompetitive by the value of the Australian dollar.

"I don't see how anyone can sustain an industry in these circumstances - I think we are seeing its inevitable decline," he said.

He was concerned that the Triabunna mill would not reopen.

Opposition forests spokesman Peter Gutwein said that the closure of the Long Reach mill this week and Hampshire late last year came with the loss of more than 570 jobs.

"And that comes on top of a loss of 120 jobs from the Scottsdale sawmill this week," Mr Gutwein said.

Forestry Tasmania would review the Gunns decision to suspend operations at Triabunna, FT managing director Bob Gordon said.

"It will cause considerable hardship in the forest sector," he said.

"We will continue to harvest high- quality sawlog and solid wood for the rotary-peeled veneer market, but the challenge is to find an alternative market for the residues."