Opinion: John O’Donnell – Tough times where are the opportunities

John O’Donnell Photo: VFFA

Our Australian economy is going through a relatively tough time at the moment, including in regard to COVID-19 and trade actions. There are current issues across Australia in regard to timber exports to China, an important Australian export market and there have been export restrictions applied across all States, resulting in harvesting and export impacts.

In contrast to the export sector, there are also industries with inadequate plantation timber supplies within Australia, as a result of the 2019/ 20 bushfires, and also from industry that desire more resources.

I understand both the importance of plantation timber exports and the importance of local industry and regional employment, and I suggest it is a useful time to tease out any opportunities for Australia in regard to optimising both exports and within Australia.

There appear to be potential opportunity areas that could increase available plantation timber export markets and value, including:

• Diversifying plantation timber export markets and products to a broader range of countries and markets. This is happening in many countries throughout the world.
• Value adding of plantation timber products in Australia before export, hopefully over the broad range of timber products.
• Completing more free trade agreements, including with the UK, Europe, India, Indonesia and other markets.

There are potential opportunity areas to value add and utilise more of the available plantation timber resources within Australia, including:

• Developing more timber markets and products here in Australia, including sawn products, cross laminated timber, glue laminated timber, fibreboard, fibre, pulp/ paper, packaging, veneers, biofuel/ densified pellets/ biomass pellets, bioenergy, other engineered wood products, nanocellulose, wood composites, wood plastic composites and lignin products.
• Bioenergy involves using carbon-rich waste to produce heat and electricity. The energy produced can be cheap, abundant and reliable and as with other renewable energies, power and heat from bioenergy is generated closer to where the energy and heat is used. With bioengineering it can produce chemicals, fuels, synthetic rubber, cosmetics, detergents and textiles.
• Setting up industries that can rely on variable intake of product, both in conjunction with existing industry and separate, such as if there is excess plantation timber, where timber parcel sales occur, where there are value adding opportunities, where market opportunities allow or where export markets reduce.
• Exploring opportunities to further optimise salvage of burnt timber plantations for products, increasing salvage returns, reducing reestablishment costs and reducing time to replant. This includes interstate/ regional agreements for large plantation bushfire impacts and optimising products from bush fire salvage, salvaging standing timber well after the first year after bushfires. This also includes using salvage opportunities with biomass pellets in Australia and for export, including for longer periods after bushfires. This includes transporting and using more bushfire impacted plantation timber across borders/ from other timber areas, increasing salvage of burnt plantation timber following major bushfire events.
• Improving timber salvage technology to store salvaged plantation timber over greater than 1 year, up to 5 years, as I understand this was achieved in the South Australian Mt Gambier 1984 bushfires with P radiata. This was achieved using water spaying and storage in water, water spraying is likely a better option.
• Continuing to resolve supply constraints in the timber industry, including plantations. The current supply constraint inquiry is applicable. Increasing plantations in Australia is an important opportunity and will greatly assist in supplying timber to Australian markets and for export.
• Continuing to promote the advantages of embodied emissions of the materials used to construct buildings, timber appears to be an attractive option, since according to many studies it can achieve less embodied and operational emissions in comparison to concrete and steel. In addition, the prefabrication of timber components with precision can deliver a highly efficient building envelope that improves insulation, saves on heating and cooling and minimizes thermal bridging.
• Continuing expansion in using timber in the construction of tall buildings, bridges and other major projects.
• Considering optimised integrated plantation harvesting operations so that there are suitable markets in the event of export closures. Focussing on promoting ongoing early plantation thinning programs, to produce chip/ pulp/ other timber early and increase more valuable log product production. Also, thinning programs occur early/ in advance and so that thinning/harvesting programs are not as affected by export closures.
• Exploring opportunities to reduce fuel loads in pine plantations at strategic fire breaks, using the upper pine needle layer as compressed biofuel in mixes or bioenergy from these areas.
• This would increase plantation safety where this approach is used strategically.

Examples of value adding and increasing utilisation of the available plantation timber resources in Australia include:

• The planned $59 M Tarpeena cross laminated timber (CLT)/ glue laminated timber (GLT) plant at the Tarpeena sawmill site in South Australia.
• Hyne’s sawmill at Tumbarumba has sourced 441,000 m3 of pine plantation timber from South Australia and Victoria over the next three years, following the major bushfires at Tumbarumba and Batlow in early 2020. The SA timber currently has no Australian market and is exported.
• Hyne is working through some assistance with freight with the State and Federal Governments.
• Proposed biomass pellet mill plant on Kangaroo Island capable of processing fire-damaged timber (Daily Timber News, 4 January 2020). Over the past 12 months, KIPT has worked to secure diversified markets for dry product, that is, logs produced from forests damaged by bushfire, beyond the tolerance of traditional export markets. Biomass pellets are a sustainably produced, carbon neutral form of fuel used for electricity generation in established markets in Japan, North America and Europe. There is growing interest and trade in biomass pellets as an emissions reduction strategy. New purpose-built plants are capable of generating power from 100 per cent biomass pellets. The plant would be at the company’s timber processing hub at Timber Creek, a site which was damaged by the fires of last Summer. The pellets would be exported using the chip-handling facility at the proposed Kangaroo Island Seaport at Smith Bay.

Developing such business plantation timber market, diversification, value adding and resource use opportunity areas would improve Australian economic, employment and other outcomes, including:

• Greater economic activity and value adding across Australia, particularly in regional areas.
• Greater employment in Australia.
• A vibrant building industry using Australian timber products.
• More certainty re the export timber market and value added exports from Australia.
• Potentially greater use of bushfire impacted timber plantations increasing timber salvage, speeding up the reestablishment process and reducing plantation reestablishment costs.
• Economic and environmental advantages of lower embodied and operational emissions in timber buildings.
• Where Australian industry uses renewable energy, there are further advantages in reducing greenhouse emissions than compared to other countries.

I suggest the focus when exploring timber plantation opportunities would cover the following areas:

• Optimising timber product opportunities, including timber products, biofuel and bioenergy.
• Maximising value adding.
• Optimising regional development and employment.
• Optimising tree and timber recovery.
• Optimising plantation salvage, including major event bushfire salvage and storage.
• Reducing plantation bushfire risks where possible.
• Optimising science opportunities in the above.

In order to achieve these outcomes at government/ industry/ regional levels, it would be good to tease out mechanisms to increase opportunities to increase and diversify timber markets and products from tree plantations across Australia, including:

• Undertaking workshops and working groups including plantation growers, industry, industry groups, federal and state governments to explore all plantation opportunity areas. Then teasing out the key actions for actioning. It would be beneficial if this process was led by the Commonwealth with the states, taking into account trade issues, incentives, cross border opportunities and the current supply constraints review. The process could be similar to the successful Bob Hawke’s government wage reform approach, getting key parties together.
• Exploring incentives and tax opportunities to optimise new timber industry investment.
• Establishing flexible workforces between timber products e.g. specialist products such as CLT/ GLT with an established sawmill.
• Expanding the plantation estate, further increasing greenhouse gas capture.
• Taking into account plantation supply constraints, currently under review.
• Working with plantation hubs to progress identified issues.
• Working with Austrade to increase and diversify timber markets and products from tree plantations across Australia, including export and value added export.
• Working with the Business Council of Australia to increase and diversify timber markets and products from tree plantations across Australia, noting the importance of the plantation timber industry in capturing greenhouse gases, regional development and regional development.
• Working with the Department of Industry, Innovation and Science Industry Growth Centres Initiative to increase and diversify timber markets and products from tree plantations across Australia, increasing innovation, productivity and opportunities for the plantation timber industry.
• Considering potential opportunities to appoint forestry market and product development specialists within Australia and for export.
• Increasing science opportunities in reuse of timber plantation material after major bushfires, including increasing the life of stored/ salvaged timber, innovative timber treatment options to increase life/ reduce blue stain and increasing the rage of potential timber products.

I suggest that it would be beneficial to explore the above opportunities to expand and diversify timber markets and products from pine and hardwood tree plantations across Australia, as well as value adding and maximising resource use. I suggest identified opportunities can then be separated into quick/easy opportunities, medium term opportunities and longer-term opportunities.

The plantation timber industry has the potential to become a role model for Australia.

John O’Donnell was a forester with the then NSW Forestry Commission for 11 years. He holds a Bachelor of Science (Forestry) Hons 1978 from Australian National University and a Post Graduate Diploma in Agronomy and Farming Systems from the University of Adelaide 1996 and 1997, majoring in environmental issues in agriculture. He was awarded a Commonwealth Forestry Scholarship in 1976 and 1977.