Forestry and wood and the ETS
From New Zealand Tree grower August 2010
Tenco is one of New Zealand’s largest exporters of forest products. We have built to this position since 1991 when the company was set up to export lumber to growing Asian export markets. Experience and reputation count; from small beginnings Tenco has become the largest independent exporter of New Zealand lumber and New Zealand’s 4th largest log exporter. Tenco has a regular shipping program of their own log vessels and in combination with these and other ships currently calls at 7 New Zealand ports (5 North Island and 2 South Island).
Tenco buys standing forests. Tenco currently has a number of forests which they purchased at harvestable age to log over a number of years for export and domestic markets. Tenco also regularly buys smaller tracts of forest to harvest immediately or immature forests to hold until harvest time. Tenco is interested in broadening the base of owners from whom it purchases forests and stands of trees. A deal with Tenco is a certain transaction. The owner and Tenco will agree on a value of the tree crop and then Tenco will pay this amount to the owner either in a lump sum amount or on rate per volume unit out-turn from the forest depending on the nature of the tree crop.
Tenco knows there are a lot of farmers who have trees that are close or ready to harvest and will be asking themselves how they should proceed with the sale of their trees. For some farmers the kind of certain transaction with money in the bank could well be appealing. Tenco is actively interested in buying harvestable forests or trees from areas including all the North Island (except the Gisborne and East Coast districts) and Nelson & Marlborough in the South Island .
If you own a forest in this area (16 years and older) and are ready to enter into this kind of agreement Tenco is interested to develop something with you.
Please contact: Josh.Bannan@tenco.co.nz
Work: +64 7 357 5356 Mobile: +64 21 921 595 www.tenco.co.nz
If we want to reduce atmospheric carbon dioxide why have we limited the forestry contribution to carbon sequestration? Since we cannot go on increasing new planting for ever, the carbon sink potential of forests is only temporary. In a mature forest the volume of dying or harvested trees more or less equals the volume growth of the remaining trees. Provided the forest is replanted or re-established, the forest is no longer a carbon sink but becomes a carbon store.
Why do we continue to ignore the permanent contribution that wood could make to atmospheric carbon sequestration? Unlike fossil fuels, wood use recycles carbon dioxide as, on burning or decay, an equivalent amount of carbon dioxide is re-sequestered by the remaining growing forest. As well as being an endlessly renewable raw material, wood is also very energy efficient as well as environmentally friendly. If the world really wants to permanently reduce atmospheric carbon we should promote a greater use of wood and reduce our use of concrete, metals and plastic.
However, under the present ETS there is a major disincentive to harvest forests. What we have is a bureaucratic nightmare in which forest owners have to buy back carbon credits on harvesting or for wind throw, fires or any tree loss. The Australian ETS proposal – a one-time payment equal to half of the expected carbon dioxide sequestered at rotation age – is far more logical and far easier to administer. The only liability for the forest owner is where there is a change of land use.
I cannot see the present ETS lasting for decades let alone centuries. I am not aware that it has yet happened but it is very likely we will see wood users claiming credits for replacing concrete, metals or plastics. Another bureaucratic nightmare. It will be totally unfair to the forest growers who grew the wood in the first place but are liable for carbon penalties at harvest.
When the ETS was being developed I had considered proposing that forestry and wood be excluded from the ETS completely. We would get no credits for any growing forests but then we would not face any liabilities at harvest which would have encouraged more tree planting and a greater wood use.
However the Kyoto Forest Owners were advocating that it was wrong of the government to confiscate the carbon credits for forestry. If there were to be carbon credits these should go to the forest owner. Any new proposal from me was most unlikely to find general support from the forestry sector as the sector could not support two very different proposals. The government would never have considered my proposal as it was very keen to have the carbon credits from the plantings of the 1990s.
Some may disagree but I cannot see forests, and certainly not forests of indigenous tree species, being planted for carbon sequestration alone. It would be far more profitable to invest in production forests.
There seems little argument that we need more forests. If we encouraged a greater use of wood and do not introduce market distorting subsidies to carbon dioxide polluters such as concrete. steel, aluminium and plastics, forests would be greater profit earners, we would see more tree planting and the world would be closer to a sustainable future.
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