Lack of woodwaste curbs biofuel sector

A major forestry report says promising downstream industries such as biofuels and biochemicals are unlikely to flourish if sawmillers don't on-sell their waste.

The Woodscape report, out this week, examined ways the country can boost its wood exports from $4.5 billion to $12b within 10 years.

Foresters are preparing for a large surge in the wood harvest in the next decade, and want to add value to the industry beyond its booming log export trade with China.

Wood Council chairman Doug Ducker urged sawmills to on-sell their waste to ensure that emerging technologies like biofuels could generate "acceptable positive returns on investment".

However, sawmillers say they are struggling just to survive. About 23 sawmills have closed in the last five years.

"In order to have some of these new industries, it all comes off the back of traditional sawmilling and we are in a difficult situation at the moment," said Jon Tanner, of the Wood Processors Association.

He agreed sawmillers might make some revenue from byproducts.

"If we want to move forward on anything like alternative fuels, we're going to have to think pretty hard about how to keep this as a viable industry".

Mark Hansen, managing director of Whangarei's Rosvall Sawmill, said his industry was being battered by a combination of factors.

"What we're getting is a raw- material price that keeps going up and a dollar that keeps going up, and we've had the housing industry around the world on the ground. So we've been the meat in the sandwich crunched."

However, he said everyone agreed woodwaste had great potential.

Bioenergy Association executive officer Brian Cox said he was "baffled" that sawmillers and forest owners did not see their rejects, sawdust and shavings as revenue.

"I see this as the biggest barrier to getting wood fuel as a mainstream energy source for New Zealand."

Businesses were keen to move away from coal, and their main concern was security of supply, he said.

It was a billion-dollar industry literally going to waste, he said. The association believed $6b of revenue could be generated if New Zealand moved a quarter of its energy and a third of its transport needs to biofuels. That was on top of the wood industry's $12b goal, he added.

One of the collaborators on Woodscape, Crown research organisation Scion, said it looked closely at Canada where sawmills were now expanding into bio-energy and pulp mills were converting into bio-refineries, leading to much higher revenues.

Its own model was adapted to New Zealand conditions but something similar could happen here, said Warren Parker, Scion's chief executive.

"Our next step is to work with companies to use the WoodScape model to help them understand their individual investment options at specific sites and regions."

Scion will hold workshops this month around the country to demonstrate its model to forestry and wood-processing businesses and investors.

Woodscape was funded by major wood industry players Scion, New Zealand Trade & Enterprise, EECA, the Bio-energy Association and the Ministry for Primary Industries. Fairfax NZ