Debunking the Myths
Myth #1 The native forest industry is being subsidised
Businesses in the timber and forest products industry in New South Wales operate commercially and without government subsidy, as they have done since the days of the early settlers.
The industry relies on access to publicly-owned State forests for the supply of native timber. The management of State forests is undertaken by the Forestry Corporation of NSW, which enters into long-term supply contracts with members of the timber and forest products industry. Read More…
Over the last twenty years nearly half of all NSW State forests have been transferred into National Parks. The impact of this has been to reduce significantly the ability of the Forestry Corporation of NSW to supply native timber in the quantities agreed upon in the contracts.
Where members of the timber and forest products industry have been forced to close or downsize due to the reduction of supply of timber, the NSW government has provided compensation in accordance with the contracts. This has taken the form of exit packages (similar to a forced redundancy) or money to undertake structural adjustment.
Myth #2 The native forest industry is uncompetitive
The timber and forest products industry has demonstrated over many decades that it can compete effectively both in domestic and global markets. The economic viability and competitiveness of the native forest industry depends on four key operating parameters:
- A sustainable supply of timber
- Equitable access to commercial regrowth forests
- Workable operating rules
- Fair log pricing
Sustainable Supply of Timber
Only seven per cent of the NSW’s native forests (public and private) is currently available for timber harvesting. Over recent decades many State forests have been reclassified as National Park and are no longer eligible to supply timber (refer Figure 1).
Figure 1 – Declining area of NSW native State Forests
Source: McIntosh (2013) The Australian native forest sector: causes of the decline and prospects for the future.
The Australian Institute Technical Brief No. 21 April 2013
Equitable Access Coastal regrowth forests are where the industry has traditionally operated, without adverse impact on the environment. However, in recent decades the vast majority of these coastal forests have been reclassified as National Parks, despite the fact that many of them are not required to meet scientific conservation objectives. The timber industry cannot be expected to remain competitive if it is only allowed to operate in steep and or rugged terrain that is remote from its processing facilities. To remain competitive, the industry needs equitable access to coastal regrowth forests.
The timber and forest products industry is a supporter of a comprehensive, adequate and representative reserve system. The industry does not however support the management of former multiple-use coastal regrowth forests as National Parks where they are not required, for ‘conservation only’ objectives. The industry calls on the NSW Government to reinstate these forests as multiple-use conservation areas which cater for selective timber harvesting.
Workable Operating Rules
Although wood resources remain plentiful, access to them is now heavily constrained by tenure and regulatory restrictions. So, in New South Wales native forests are protected from clearing and land-use change.
On land that is available for timber production, strict operating rules mean that now only around half of the forest is actually available for harvesting. Each coastal native forest operating region now has over 2,000 operating conditions which must be complied with. A huge disparity has developed between theregulation of the native timber industry and the regulation of comparable land-use activities like agriculture.
For operating rules to be workable there needs to be a balance between the needs of the environment and the requirements of a sustainable timber industry. Over the last 15 years the industry has been forced to operate in an increasingly smaller area as more and more forest is set aside to cater for site specific environmental requirements.
This has led to the areasthat remain available for harvest being harvested more frequently than they otherwise would or should be. It has also constrained the industry by reducing the ability to plan the spread of operations in time and space. In the event of changing markets or seasonal fluctuations this inflexibility comes at a direct cost to industry. Making more State forest available for timber harvesting would resolve this issue.
Fair Log Pricing
The ability of the timber industry to compete effectively in the market is dependent on its production costs being less that the price it receives for its processed timber. One of the biggest cost variables is the amount that it pays for the supply of logs. Logs delivered to a processing mill include the cost of harvesting, loading, haulage and a price for the log product (stumpage).
Native timber logs are inherently variable, given the many different species, sizes and qualities. All of these variables have a bearing on the amount, quality and type of timber that canbe recovered from them. Relative consistency in log mix is important as this determines how well processors can match their log mix with their markets and processing equipment.
Tracking trends in log quality (defect percentage) mix from State forests is an important aspect of log pricing that is not currently getting due attention.
The mix of locations from which logs are sourced is another important variable as this determines the cost of harvesting and haulage. If the average harvest and haul cost keeps increasing, logs become unaffordable. On the NSW North Coast an increasing proportion of logs are being sourced from more remote locations in more rugged terrain. Over the last five years this has led to harvest and haul price increasing by more than 20 per cent in real terms. The root cause of this problem was the transfer of large tracts of coastal State forests to National Park.
The only way to solve this issue is to transfer some of the coastal regrowth forestsback to State forest and or to adjust log stumpage prices down in areas that have higher than average delivered costs.
The decline in the area being made available for wood supply has caused a commensurate decline in production of timber (refer Figure 2) and a requirement on industry to restructure and downsize.
Figure 2 – Volume and value of logs harvested from NSW native forest by year
Source: ABARES (2013) Australian Forest & wood product statistics – Sept & Dec Quarters
The following changes need to be implemented by the NSW Government to ensure a sustainable and competitive footing for the native timber industry:
- Make available a sustainable timber resource that cannot be eroded by the cumulative impacts of environmental operating rules
- Reduce the number of operating rules where environmental risk is low and making remaining rules more workable
- Achieve greater regulatory consistency and transparency with other primary industries
- Ensure log stumpage pricing is more closely aligned with log production costs and changes in log quality
- Allow greater access to coastal native regrowth forests
- Make more area available for timber harvesting to provide flexibility to move operations in time and space
Myth #3 Plantation wood should replace wood from native forests
Some believe that sourcing wood from plantations rather than native forests is more environmentally responsible. However, a holistic perspective is needed. Both native forests and plantations have their environmental advantages and disadvantages.
It’s also important to distinguish between the viability of hardwood and softwood plantations as a replacement for native wood resources and to acknowledge industry innovation in addressing limited hardwood supplies. Read More…
Native Forest vs. Plantation Production
Wood production from native forests is relatively low cost for a number of important reasons. Unlike plantations, native regrowth forests do not require a large upfront investment to ensure successful establishment, nor do they require fertiliser, intensive cultivation or management.
Native forests must be actively managed for environmental and safety reasons whether they are used for timber production or not. Native timber harvesting is a form of active management thatcan be applied as asilvicultural tool to improve resilience against fire and to promote biodiversity and forest health.
In this context, arguably the native timber production system is more environmentally friendly. It’s more akin to permaculture than the industrial agriculture involved in plantation production of timber.
Plantations grow wood much more quickly and produce a more consistent and less defective product in a much smaller space. Plantation timbers are also less variable in terms of their quality, size and species, which makes them much less costly to harvest and process. This uniformity also makes plantation timbers better suited for use as commodity products like paper, reconstituted and engineered wood.
However plantations are susceptible to fire and, being single species, are less resilient to pests, weeds and diseases.
Hardwood vs. Softwood
It is also helpful to distinguish between hardwood and softwood plantations in assessing how feasible plantation timber is as a replacement for native timber. New South Wales has approximately 88,000 hectares of hardwood plantations and 300,000 hectares of softwood plantations.
A typical hardwood plantation takes between 35 to 40 years to reach maturity. Only a small percentage of hardwood plantations have reached commercial maturity in New South Waleswith many planted in the 1990s.
The performance of NSW’s hardwood plantations has been mixed in terms of their health, growth rates and the quality of their timber. Despite high expectations, hardwood plantations are no longer seen as a viable replacement for native wood resources. They can however be expected to supplement native wood supply in the future.
In contrast, the State’s softwood plantations are a much larger and more mature resource, producing around three times more wood than the native forest counterpart.
Over the last 20 years, the timber and forest products industry has introduced considerable innovation to overcome the limited supply of hardwood. Softwood products have made considerable inroads into structural markets that have been the traditional domain of native hardwood.
This has occurred through the production of engineered wood products and the treating of softwood timber to make it suitable for outdoor use. In New South Wales the extent of this market overlap has more or less reached equilibrium (refer Figure 3), with each industry having found its competitive space.
Figure 3 – Relationship between hardwood forest products and plantation softwood product markets
Myth #4 Native forests are going to be burnt for energy
When a tree is harvested, the most sensible approach is to minimise waste by recovering and utilising as much of its wood as is practicable. So while the native timber industry produces and processes sawlog as a primary product, having markets for the sections of a tree that cannot be converted to high value timber products (‘residues’) is both economically and environmentally responsible.
Australia has created a market for renewable energy through its national renewable energy target scheme (20 per cent renewables by 2020). When we consider renewable energy we tend to think about manufactured technologies like solar panels and wind turbines. However bioenergy is another natural form of renewable energy, one that has been around for thousands of years.Read More…
Bioenergy is the energy stored in ‘biomass’ or organic matter and is generally produced through the process known as photosynthesis. The simplest form of bioenergy is firewood, which is used for heating and cooking. Today there are many different bioenergy applications including ethanol, biodiesel biogas, biochar, green electricity and jet fuel.
Before coal and the industrial revolution woody biomass was the world’s principle energy source. Since the beginning of recorded history the world’s forests have serviced the energy needs of society. In some developing countries there remains an issue of overutilisation in the form of deforestation and unsustainable forestry practices.
However in New South Wales all native forests are protected and there are strict regulations to ensure that harvesting of native regrowth forests is environmentally sustainable. In particular there are specific rules which govern the intensity of harvesting and protect soil, water and biodiversity.
Australia’s renewable energy target scheme has created some demand for mill wood residues that would otherwise be wasted or sold for a low value. The market however is not verystrong and there is no demand yet for forest biomass in the form of sawlog harvesting residues.
The timber and forest products industry seeks support to strengthen the bioenergy market for its woody residues and waste. Where feasible, the industry would like to see woody biomass waste and residues being value-added into products like biofuel to support jobs and regional investment.
Myth #5 NSW Forests are being clearfelled
Clearfelling is not a practice used in any New South Wales native forests. Below we outline what clearfelling is and is not and the method by which regrowth native forests in New South Wales are harvested.Read More…
What is Clearfelling?
Clearfelling is a forestry practice that involves the felling and clearing of an area of forest prior to it being replanted or naturally regenerated. The practice of clearfelling typically applies to plantation forests, which are of a single species and age. Like any agricultural crop, pine plantations are clearfelled when the trees reach maturity at around age 32.
Clearfelling should not be confused with land clearing. Land clearing means the permanent removal of native vegetation to make way for an alternative land-use such as agriculture, mining, roads or commercial development.
How are NSW Native Forests Harvested?
In New South Wales, all old growth forest is protected in reserve, which means that only regrowth native forests are available for harvesting. The trees in New South Wales regrowth forests are typically mixed species and multi-aged.
Harvesting of these forests is selective. A typical harvesting event involves the removal of mature trees, usually between 50 and 80 years of age, with the retention of younger regrowth and pole sized trees. Older trees may be retained for their animal habitat value (hollows) and as a source of seed for forest regeneration.
Areas subject to selective timber harvesting typically have around one third of their tree canopy removed. This proportion will vary between sites due to a range of influences, including timber markets and forest attributes including the mix of tree species, their condition, stocking density, age and size.
Australian native forests are dynamic and have a natural capacity to regenerate and recover following disturbance events. Their capacity to recover from wildfire, wind storms, temperature extremes and drought equips them equally well to recover from timber harvesting.
Myth #6 Forests should be left untouched as carbon stores
As we outline in Timber & the Carbon Economy, native forests and timber products are an important store of carbon. However, native forests are dynamic, living organisms that should not be left unmanaged.
Active forest management is important for a number of reasons, including protecting forests as far as possible from mega-fires and invasive species and maximising the sequestration of carbon.Read More…
Like all living things, forests follow cycles of growth, development and mortality. Along the way their development is often halted and reset by major disturbance events like bushfires and drought.
In 2002/3, 2006/07 and 2009 millions of hectares of native forests along Australia’s eastern ranges were burnt by wildfire. Most of these forests were located in National Parks. According to the Australian Institute of Criminology the 2002/3 fire spiked national emissions by an estimated 180 million tonnes of CO2-e.
The threats posed by these types of events mean that it is very difficult to manage a regrowth forest through to an old growth state and keep it protected. Active forest management is an important part of reducing the impact of these major disturbances.
When assessing the best way to manage forests for carbon storage it is also necessary to consider the rate that trees sequester (i.e. capture and store) carbon. In general, trees sequester carbon more rapidly when they are young, with their peak growth period typically between 10 – 30 years of age.
Carbon sequestration rates slow after a tree matures, which for a eucalypt occurs from about 80 years of age. Beyond this point the rate of sequestration flattens as carbon captured from new growth is offset by the release of carbon from parts of the tree which begin to decay and or are shed.
Sustainably harvesting trees in their early mature phase ensures that a forest’s carbon sequestration rate is kept at an optimal level. Under a sustainable harvesting regime, forests have the capacity to store more carbon over the longer term than if the forests are left unmanaged.
Wood Products Store Carbon Too
It is also important to recognise that both forests and harvested timber products provide carbon storage over the long term. Timber products have a long and stable service life, with the half-life of solid and composite wood products being up to 30 years (when used in furniture) and up to 100 years (when used in homes).
A timber framed home stores 7.5 tonnes of carbon, while a steel framed house emits 2.9 tonnes of carbon. The carbon benefits of wood also include the lower energy requirements needed to manufacture them, by comparison with alternate materials. This advantage is particularly important for the construction industry. It generally requires around 19 times more energy to make a product from steel rather than kiln- dried hardwood; 45 times more to make a plastic product; and 85 times more energy to make a comparable aluminium product.
Myth #7 More national parks are needed to protect our natural heritage
To answer this question we need to look at what is required to ‘protect our natural heritage’; whether our current efforts actually achieve our aim; whether we can achieve our aim of protection in a more cost-effective way; and the validity of the claims of the timber and forest products industry in seeking appropriate access to native forests.Read More…
Protection Through Biodiversity
Over the last twenty years the centrepiece of NSW’s conservation protection strategy has been the creation of a ‘comprehensive, adequate and representative’ (CAR) system of natural reserves which aims to protect NSW’s natural heritage by maintaining or enhancing biodiversity.
New South Wales boasts 22 million hectares1 of native forests. The system divides New South Wales’s native forests into 18 bioregions and sets as an unofficial benchmark the conservation of 15 per cent of each bioregion. In total, around one quarter (27 per cent) of NSW’s native forests is now classified as protected in a conservation reserve.
In the last 20 years the NSW government has invested around $5 billion in this system of natural reserves. Annual running costs are currently $376 million, or $53 per hectare2 (2012/13).
Variable Levels of Protection
However, the level of reserve protection achieved by the CAR system over the past two decades has been highly variable.
There has been little objective monitoring or assessment to determine whether the system’s anticipated benefits to biodiversity conservation are being realised, or whether the dollars have been distributed appropriately.
Figure 4 – Current protection levels by NSW Bioregion (Interim Biogeographic Regionalisation for Australia (IBRA)).
For example, within 13 of the State’s 18 bioregions the level of protection is less than 15 per cent.
Conversely, there are five bioregions where the conservation reserve target has been well exceeded (refer darker green colours in Figure 4). The main operations of the NSW native timber industry all occur within bioregions where reservation targets have been well exceeded.
In future, the focus on protecting our natural heritage through biodiversity conservation must be directed to where it is most needed. On the basis of the IBRA region protection levels, there are 13 bioregions that warrant greater attention and five where reserve levels warrant reduction.
In effect, this means that in some bioregions more National Parks may be needed and in other bioregions, National parks that are not critical to meeting ‘conservation only’ objectives should be reclassified as State forests. This approach would be a much better use of limited public resources.
Despite this, major common threats to biodiversity (altered fire regimes and mega-fires, pests, weeds, diseases and climate change) operate regardless of whether forest is classified as National Park or State forest. The effective mitigation of these risks requires a whole of landscape approach, yet this level of protection is not possible under the current tenure based governance arrangements.
Cost-Effectiveness of Protection
Currently, State forests and National Parks are maintained under two different schemes. As above, the annual running costs of NSW’s National Parks are currently $376 million, or $53 per hectare3 (2012/13). In contrast, NSW State forests are maintained at a net cost of $17 million or $9 per hectare (2013/14).
Where a natural ecosystem is endangered, exceedingly rare and or highly under-represented in a protected area reserve then there may remain a case for high cost protection. In other cases the conservation dollar may be better directed toward improving the management of common threats. Please see our campaign Beyond Tenure for more information.
The Claims of the Timber & Forest Products Industry
The aim of maintaining or enhancing biodiversity is an important one. Directing 90 per cent of conservation dollars to the expansion and management of the State’s National Parks system is not proving to be the solution. A more holistic approach is needed focusing on the management of common threats (altered fire regimes and mega-fires, pests, weeds and diseases and unauthorised activities). Passive management is not the answer as major common threats do not respect artificial tenure boundaries.
Holistic forest management based on active and adaptive management principles can achieve much better biodiversity conservation outcomes. Awell-managed timber industry has a critical role to play within this approach.
The timber industry generates income that covers the cost of employing people and buying resources that are critical to the management of common threats. In the absence of a timber industry major common threats to biodiversity are more likely to go unmanaged.
Over the last twenty years the role of the timber industry has been much diminished with around half of all NSW State forests having been transferred into National Parks. Today only seven per cent of the State’s native forests (public and private) are currently available for timber harvesting.
With increasing risk of mega-fires, catastrophic losses to biodiversity can be averted through more active management. Ecological thinning of forests which exhibit woody thickening characteristics not only protects them from mega-fires it also improves biodiversity outcomes. The timber industry has a key role to play in ecological thinning as it is best equipped to undertake the task at least cost.
1. ABARES (2013) Australia’s State of the Forests Report 2013
2. DPC Annual Report 2012—2013 – Statement of Comprehensive Income – Service Group 11- p 64