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This
is is a follow-up to yesterday's story, Submission to Aus parliamentstates logging endangered forests would supply Japan's wood-firedenergy needs.
"The
EPBC act only to stop logging when endangered species are found.
Scott Morrison is already saying we must log forest to stop it
burning”
Australian
Wood pellet energy snubbed here goes to
Japan
While
the federal government ponders subsidies to “clean up” coal, one
Australian firm plans to spend $130 million to export a cleaner coal
solution to Japan, after being snubbed domestically. Source: The
Australian
Global
forest manager New Forests and its Tasmanian subsidiary Forico are in
the final stages of planning for an industrial wood pellet factory at
Long Reach in Tasmania’s north.
The
plant would produce about 250,000 tonnes of compressed, cooked wood
pellets to export to Japan, where coal power stations are subsidised
to substitute the product for black coal, to reduce carbon emissions.
New
Forests managing director Mark Rogers said the densified wood pellets
would be made from forestry residues from Forico timber plantations
in Tasmania certified by the Forest Stewardship Council.
“Replanting
the tree, as is our intention in Tasmania, gives you an almost full
carbon benefit; very strong decarbonisation,” Mr Rogers said. “The
reason it’s going ahead in Japan is because the carbon component is
being recognised in the feed-in tariff price. At the moment it’s 24
yen (27c) per kilowatt hour.
“If
Australia had a similar signal, then there is no reason why some of
our black coal power stations could not use these pellets.”
The
company was rebuffed by the Clean Energy Finance Corporation, which
said the densified pellets did not meet its guidelines for subsidy.
However,
federal Environment and Energy Minister Josh Frydenberg recently
flagged a new mandate for the CEFC, including more efficient and
lower emissions coal power, as the nation looks to shore up reliable
base load energy while fostering renewables.
Mr
Rogers said densified wood pellets, from well managed plantations,
could assist with maintaining baseload while storage of renewable
energy was improved.
“The
energy is stored in the pellets, which act as a battery,” he said.
“Bioenergy could be one of those options, like gas, which is lower
carbon — and bioenergy is sometimes zero carbon — but is still
baseload.
“It
does seem to be a sensible part of the solution, so it’ll be
interesting to see how that plays out in policy. Japan has taken a
strong stand and Australia has been flip-flopping for 10 years.”
Forico
chief executive Bryan Hayes said coal power plants could substitute
up to 50% of their feedstock with the black wood pellets without
major changes to plant and equipment.
“The
total (Japanese coal power) industry is looking to substitute about
10% but in any plant it could be 20% to 50%,” Mr Hayes said.
The
pellets produced slightly less energy than coal.
“The
black wood pellets can produce about 15 to 16 gigajoules per cubic
metre and hard, thermal coal is about 21,” he said.
An
engineering and technical report on the plant is due by the end of
next month and a decision is expected midyear.
The
New South Wales government is poised to privatise the state’s
plantation forests as part of a fresh round of sale and lease
arrangements in 2020 to fund ambitious infrastructure projects.
The
second half of Ausgrid, the second half of WestConnex and some water
assets are also in the government’s sights.
The
long-term lease of Forestry Corporation’s 230,000 hectares of
softwood plantations is expected to be one of the first assets off
the block in the new year.
The
state forests produce about 14% of Australia’s timber, including
much of the supply for the housing industry.
The
transaction, expected to raise $1bn, is likely to be announced early
in the new year and will involve a long-term lease of land and the
right to grow timber, rather than the sale of land. The bank and
financial services company UBS has undertaken a scoping study in the
past three months while the accountancy firm KPMG has worked on the
tax implications and the law firm Minter Ellison on the legal
structures.
The
sale will be controversial in regional areas such as Bathurst,
Oberon, Bega, Tumut and the north-west, where large softwood
plantations are important employers.
Forestry
Corporation also manages 34,000 hectares of hardwood timber
plantations and has stewardship of about 2m hectares of coastal
native forests, cypress forests and red gum forests. These are not
proposed to be part of the deal.
But
their future could be uncertain once the money-making softwood
division is sold or leased. Green groups want greater protections for
native state forests, particularly after this summer’s fires, which
have put pressure on habitats for koalas and other native animals.
It
is understood the government would also like to sell its remaining
half of NSW’s electricity distributor Ausgrid – the company which
owns the poles and wires carrying power around the state – but the
proposal is on hold.
This
follows controversy over the sale of the initial 50% of Ausgrid in
2016, when the then federal treasurer, Scott Morrison, cited national
security concerns to block a winning bid from a consortium made up of
Chinese government-owned State Grid and Hong Kong’s Cheung Kong
Infrastructure.
The
stake was then sold for $16bn to an Australian consortium made up of
the industry super investment vehicle IFM Investors and the nation’s
biggest superannuation fund, AustralianSuper.
The
investors are said to have sounded out the government about a further
sale, but Morrison’s rhetoric on Chinese influence in Australia has
caused investors to hit the pause button on a proposal for the
remaining half.
Investors
are looking to pay about $10bn to $11bn for the second part, because
the grid is considered a wasting asset that is losing value, due in
part to the uptake of solar panels.
There
is also speculation that the government will move to sell the
remaining 49% of the giant WestConnex road project during 2020. The
2018 sale of the first half to Transurban, the state’s largest
private road operator, raised $9.3bn but sparked criticism about the
risks of having one major operator controlling so many roads in the
state.
Other
holdings being sized up by the private sector include some of Sydney
Water’s assets and the opportunity to build the extension to
Sydney’s desalination plant and other new projects.
The
existing plant was turned on last January and is operating at 100%
capacity, providing 15% of the city’s water needs. An options paper
has recommended 30% capacity of the dam system as the critical
threshold on which to base planning for an extension. The Greater
Sydney dam system is now at 44.3% capacity and falling.
Although
investors are angling for Sydney Water’s assets to be considered
for privatisation, the proposition is considered too politically
contentious in a drought.
The
most likely outcome will be to involve the private sector in new
projects, which could include dams combined with pumped
hydrogeneration opportunities.
The
acting treasurer, Damien Tudehope, told Guardian Australia: “The
NSW government has no current plans to undertake further
privatisations at this stage, but will always act in the best
interests of the people of NSW.
“The
asset recycling strategy, which was opposed by NSW Labor, has
unlocked additional funding for infrastructure projects and enabled
the government to accelerate the delivery of critical projects
including the Sydney Metro City and Southwest, the More Trains, More
Services program, regional road freight corridor and the Parramatta
light rail.”
But
it is clear that significant work has been done on the softwood
plantations sale (there are contracts for the scoping study on the
eTender site) and Guardian Australia understands up to 10 bidders
have expressed interest.
Labor’s
spokesman on natural resources, Paul Scully, said the ALP remained
opposed to the sale of the state’s softwood plantations. He warned
that privatisation would result in significant regional job losses
and the loss of important assets such as the nursery at Blowering and
firefighting expertise. He also raised questions about what would
happen to the thousands of kilometres of roads maintained by the
Forestry Corporation.
Victoria
sold its softwood plantations in 1998, while Queensland reaped $603m
when it sold Forestry Plantations Queensland in 2010. But NSW has by
far the biggest timber assets.
James
Tremain of the Nature Conservation Council warned of negative
environmental impacts from privatisation.
“Privatisation
will most likely result in worse environmental outcomes for forests
because a private company will always seek to maximise its profit by
fully exploiting the resource,” Tremain said.
“The
NSW EPA has failed to make Forestry Corporation, a government-owned
enterprise, comply with environmental laws. What hope would it have
of making a private company abide by the law?
“If
the government proceeds with the sale, it should remove first the
native forest logging division and use the money from the transaction
to fund a just transition for affected communities and workers.”
There is a parallel story that I wrote about 2 years ago. The recording I made of this story from UK TV has long been disappeared with my entire Vimeo account.
UK Is Cutting Down Huge Swaths Of American Forest To Fight Climate Change
