The Government went to the State Election in March with a clear statement of its intent to rebuild Tasmania’s forest industry.
That policy commitment was very strongly endorsed by Tasmanians, and the Government has been getting on with the job.
Our legislation to rebuild the forest industry has been approved by Parliament, received Royal assent on the 25th of September, and will commence next Wednesday – the 22nd of October.
That’s the same day that the Ministerial Advisory Council will meet for the first time.
Both are important to our plans to grow the industry and create jobs in regional Tasmania.
The Rebuilding the Forest Industry Bill, among other things marked a watershed in the fortunes of the industry.
For the first time it put a halt to the lock-up of forest resources which has been going on for the past 40 years.
At the same time, however, the Government is well aware of the need to promote and capitalise on the excellence of Tasmania’s forest management.
We have a robust system in place overseen by principles laid down in a Forest Practices Code that is as good as anywhere in the world.
We have an umpire in the Forest Practices Authority that is vigilant, independent and has a hard-earned international reputation for integrity.
We have a public forest manager – Forestry Tasmania – with vast experience and an outstanding reputation for the standard of its forest management.
FT already holds certification under the world’s biggest certification scheme, PEFC, as well as Environmental Management certification under the International Standards Organisation.
The Government is committed to the widest possible endorsement of FT’s forest management through independent certification.
That is why we have thrown our weight very strongly behind the Forestry Tasmania bid for Forest Stewardship Council certification.
We know that there is commercial recognition for certified wood and wood products.
However, there can be no point in achieving FSC certification if we are not able to get our products to market.
The need for a southern port with the capacity to handle export of current and future wood products is vital.
All sides of politics are agreed on the minimum supply requirements of 137,000 cubic metres of sawlog and 157,000 cubic metres of peelers from the Permanent Timber Production Zone.
These agreed production levels generate roughly four times the volume in residues.
In the same way that a butcher needs to sell all cuts from a beast in order to survive in business, the economics of the forestry industry depend on successful marketing of sawlogs, peelers and residues.
I want to emphasise that this is the direct result of harvesting and processing the agreed wood supply volumes from the agreed production forests.
The loss of the Triabunna export terminal was devastating to the industry in the South of the State.
That has been recognised by all sides in this place.
The previous government commissioned an examination of alternatives to Triabunna from the Industry Development Division of the then Department of Economic Development, Tourism and the Arts.
However, having received the report, it did nothing with it.
Instead, it persisted with subsidising the transport of limited volumes of southern residues to the north for export.
This was extremely expensive – costing around $5 million a year even for the limited volumes involved, and $10 million a year to capture all residues from agreed harvesting and processing operations.
It was also unsustainable from a forest management and commercial point of view.
This Government has not been content to allow that situation to continue indefinitely.
Up to 1.5 million tonnes of wood fibre will become available over the medium term from the public and private production forest lands in the South.
Private forests have the capacity to contribute as much as 60 per cent of the wood supplied to Tasmania’s wood products processing industries.
More than half of Tasmania’s private native forests are in the South, which also holds almost a quarter of the hardwood plantation estate – some 40,000 hectares.
Private Forests Tasmania estimates that in total the private forest sector in the South has the capacity when those plantations mature to generate sustainable production in the order of one million tonnes a year.
PFT suggests that volume of production – remember this is private forests alone – can generate earnings of $75 million a year, with benefits all along the supply chain.
That is in addition to the residues generated by harvesting and processing of wood from the publicly-owned Permanent Timber Production Zone.
However, we need access to a Southern deep-water port if we are to take advantage of the opportunity.
That is an opportunity that all up could potentially create hundreds of jobs in regional Tasmania and could be worth as much as $100 million a year in export earnings and wealth generation through the community.
The Government commissioned Forestry Tasmania and TasPorts to conduct a new investigation into potential export port options right across the South.
At the same time, the House of Assembly Community Development Committee has been investigating the closure of the Triabunna mill and access to the Triabunna port.
The port options study by FT and TasPorts has been completed and delivered to the Government, and the Community Development Committee provided their views on the way forward for Triabunna through the interim report released yesterday.
The Government has considered both of these reports in reaching a decision on the preferred option for further investigation for potential resumption of woodchip exports from the South.
Before I go into the Government’s decision, I need to provide some background to the House.
The first thing to note is that the Triabunna mill site is privately owned by Triabunna investments and that one of the partners in Triabunna Investments, Mr Graeme Wood, has outlined proposals for a $50 million tourism development on the site.
Mr Wood has also expressed quite clearly his view that this development would be compromised by a resumption of woodchip exports through the Triabunna port.
The only way that the Triabunna port could be used for exports would be for compulsory acquisition of the site.
These matters were considered by the Community Development Committee which, in the report tabled yesterday, recommended against compulsory acquisition.
In considering that recommendation, the Government also had before it the findings of the separate investigation by TasPorts and Forestry Tasmania.
This investigation reviewed and updated the 2011 study and examined all potential port options between Port Huon and Triabunna.
These included Port Huon, Margate, Electrona, Macquarie Wharf, Self’s Point and Risdon, as well as Triabunna.
The working group, after careful investigation, eliminated all of the options except for Macquarie Wharf and Triabunna on the grounds of either economics or logistical difficulties.
For instance, Self’s Point and Risdon would not be accessible because the ships required for woodchip exports are too large to meet the safe navigation requirements for the Tasman Bridge.
Other options were not economically viable or would have significant consequential impacts on other industries.
For example, Port Huon would require major dredging with potential substantial disruption to the aquaculture industry.
In considering the merits of Macquarie Wharf and Triabunna, the working group examined the likely timetable for developing an export facility to the operational stage.
It found there were two substantial hurdles at Triabunna – the need to compulsorily acquire the site and the need for significant reinvestment in infrastructure.
This meant it would be expensive and it could not happen within a reasonable time frame.
For these reasons the working group recommended therefore that further investigation be focussed on Macquarie Wharf.
Forestry Tasmania and TasPorts also assessed the option of continuing to subsidise transport of southern residues to the North of the State for export.
However, this would not be an economic proposition.
The paper concludes that transport of residues to the North will continue to incur a significant cost disadvantage over a southern export option.
For that reason, the Government has decided:
• In the immediate term, to continue to support the transport of both harvesting and processing residues to the North for the immediate future;
• To commission a more detailed report on the feasibility of an export terminal at Macquarie Wharf, with a lifespan of one-five years.
While we do not intend to pre-judge the outcome of this more detailed investigation, there are some matters that will not be on the table.
There will not be a woodchip pile on the wharf. The investigation will be on the basis that:
• woodchipping would occur offsite – possibly at Brighton and Leslie Vale
• there would be an undercover baseload storage capacity on the wharf, and
• shipments would be topped up by direct transport from the chip mills.
The investigation will include consultation with all stakeholders. That will include industry stakeholders, the Macquarie Point Development Corporation and the tourism industry.
It is the Government’s strong view that tourism and forestry can co-exist and grow together. The decisions I have announced today will facilitate the development of both industries.
The Government has made no decision about the longer-term future for wood fibre exports from the south, and it is my strong view that it would be premature.
All of us in this House see wood fibre or any other unimproved exports as a second-best option to local processing and value-adding and local jobs.
That is one of the priority issues for investigation by the Ministerial Advisory Council as it develops the growth plan for the industry.
A Residues Solutions Study was commissioned by the former government and is continuing under the current government.
Its purpose is to identify potential options to add value to harvesting and processing residues from both native forests and plantations.
The study is being undertaken by URS Australia, and is being conducted in two stages – an initial assessment and identification of options, followed by detailed consideration of the highest priority options.
A Draft Stage 1 Report has been completed and identifies 23 separate opportunities, following analysis based on factors including technical feasibility, market potential, economic viability, social factors, environmental sustainability, and financing requirements.
The draft report recommends four key areas be considered in greater detail in the second stage of the project. These are:
• Processing of residues into timber products, including plywood and Glulam/Cross Laminated Timber (e.g. Hardlam);
• Energy generation options (i.e. biomass), including stand-alone power (small-scale power generation); and industrial co-generation (site-based heating/power generation);
• Biofuels, including biomass-based hydrocarbons (i.e. using residues to develop petrol substitutes); and
• Torrefied wood pellets (i.e. highly processed pellets for power generation and heating).
The draft report will be one of the matters considered by the Ministerial Advisory Council at its first meeting next week.
I would anticipate the Council will be pursuing a more detailed examination of those priority options with vigour.
However, Madam Speaker, I might say that there is one solution for those opposite who would wish to oppose any form of wood fibre exports from the South.
That is – the Pulp Mill.
If ever there was a project designed to reduce the need to ship raw product overseas, provide jobs and add value here in Tasmania it was the pulp mill.
In the spirit of bipartisanship, the Government looks forward to the support of the Opposition for the Macquarie Wharf investigation.
The Opposition has opposed the reopening of Triabunna and the Leader has proposed the use of Macquarie Wharf for wood fibre exports.
The Greens also have opposed the reopening of Triabunna and they have specifically endorsed the harvesting strategies that lead directly to the need to find markets for residues.
I call on them now to support the only potentially viable option to access those markets.
Paul Harriss, Minister for Resources
