Marty Verry
New Zealand will need to convert fewer farms to forestry to meet emissions targets if we do two simple things. Both relate to storing more carbon per hectare of land.
The first is to incentivise storing carbon in longer-life wood products.
It is not well known that carbon accounting from forestry has two components: the “tree growing” stage, and the “wood product storage” stage. This second stage is referred to as Harvested Wood Products, or HWP for short.
With HWP, we’re taking big numbers.
A report by Scion for MPI in 2019 estimated the value of HWP accounting to New Zealand to average $250 million annually over the next 30 years, after adjusting for the current value of carbon.
We can increase this Harvested Wood Product accounting value in two ways; produce and use more long-lived products, or process more logs and low-grade timber here in New Zealand, instead of sending them to Asia.
Studies commissioned by MPI and MfE show that in Asia our wood is used for shorter life-products such as formwork for concrete and packaging, and this generates lower HWP accounting value for New Zealand than if used locally for longer-life construction.
Not only does increasing the value of Harvested Wood Products reduce the need for more farm conversions, but it also creates more wood processing jobs, particularly in regions with a high Māori workforce.
Further, it improves New Zealand’s poor imported carbon ledger by substituting products like local Cross Laminated Timber and glulam for imported steel and cement.
The latter cause around 8% of world greenhouse gas emissions each and are the main contributors to 15% of New Zealand’s CO2 emissions attributable to building materials.
By way of example, the MPI/Red Stag-backed five-storey mass timber demonstration building at Clearwater in Christchurch had up-front carbon of negative 80 tonnes, whereas the alternative options in concrete and steel emitted in excess of 800 tonnes each.
There is a huge environmental cost in building with these products instead of wood.
Long time coming
Back in 2005, the wood processing industry worked with the then Minister for Forestry, Jim Anderton, to push MFAT to ensure HWP value was recognised by the UN’s carbon accounting rules. This eventuated in 2006.
At that stage, New Zealand was also preparing for the 2008 launch of the Emissions Trading Scheme. Wood processors saw the opportunity to earn “wood storage stage” carbon credits in the same way post-1990 foresters could for their “growing stage” carbon value. Some invested to that end.
To date though, this distribution of HWP credits has not occurred, despite HWP value being calculated in the country’s emissions profile since 2021. The government has been holding on to them.
Wood processors are expecting the same fair and equitable treatment as their forest-growing cousins by having the HWP value distributed.
In the last decade, the addition of the carbon income stream has transformed the forest growing sector by providing a dual income stream – logs and carbon.
HWP value has the potential to do similarly with the wood processing sector.
It, along with MBIE’s regulation of carbon in buildings, is the linchpin to the success of the forestry and wood processing transformation plan.
In 2019, then forestry and climate change ministers Shane Jones and James Shaw asked officials to develop a scheme to distribute HWP value to wood processors. That process was deferred until the Industry Transformation Plan (ITP) which is now before Cabinet.
HWP forms a key ingredient in the ITP recipe set for transformation. Submissions seen to date have been unanimously in support, including by all industry associations and Ngā Pou ā Tāne, the National Māori forestry lobby.
More from less
The second way to need fewer farm conversions is to store more carbon per hectare of land at the “forest growing” stage. There are three key areas of opportunity.
The first is to plant trees such as redwoods.
Their carbon sequestration per hectare overtakes radiata pine from around age 30, and they reach an optimum harvestable age at around 50-60 years. That also matches the timeframe that the world really must get on top of climate change.
Redwood timber is also more valuable, meaning stands will be more likely to be pruned and harvested, creating more rural jobs, and the financials are more likely to stack up in the more remote or erosion-prone country. The latter also leaves the better land for farming.
The second is to incentivise more carbon sequestration per hectare of existing forests, including pre-1990 forests. Budget2022 had an allocation to investigate this further.
The third way to get more carbon per hectare of farm conversion is to plant exotics and not natives.
Sorry, if the issue is “solving climate change” then natives just don’t have the bang for the buck and are just too slow at growing during the crucial next 50 years.
Native forests can be up to ten times more expensive to establish per hectare than radiata pine, and growth rates are around one-third. That amounts to radiata having 30 times more sequestration per dollar invested.
Even getting this number down to ten times does not stack up when it comes to addressing climate change with a limited budget.
Budget 2022 has a very generous $143 million allocated to establishing natives. The main focus is to lower native seedling costs.
This will go some way to closing the 30-times gap but won’t address the cost of the extended period of protection required from weed and animal pests whilst getting established, nor the very slow growth rate.
Looked at from a farm conversion perspective, natives need up to three times more land to sequester the same amount of carbon.
From a climate change perspective, some of this native nursery funding may be better re-allocated to triggering more Harvested Wood Product carbon accounting.
Up-front carbon in buildings is due for regulation by MBIE in the coming year. Between that, and the decision about distributing HWP value to wood processors, we are about to find out just how serious the government is in addressingthis significant area of climate change.
The rural community will certainly welcome the reduction in farm conversions too.
Marty Verry is chief executive of Red Stag group, which has investments in 4000 hectares of forestry, the Southern Hemisphere’s largest sawmill, and engineered wood products operations in Rotorua and Auckland.
The article was first published in The New Zealand Herald.
