Australian forests could have bright future by making a greater contribution to offsetting carbon emissions and helping to underpin a new engineered wood industry and create jobs, but there must be an end to end strategy which gloves the forest industry with the potential market for innovative new products.

The Australian Forest Contractors Association seemed pleased to hear of the government’s position on forests.

CEO Colin McCulloch said, “…the political cycle has swung back in the favour of the forestry industry, so it’s happy days as far as I am concerned.”

His comments followed Prime Minister Abbott’s address to a logging industry gathering this week, where he said, “we don’t support as a government and as a coalition further lockouts of our forests. We just don’t support it. We have quite enough national parks; we have quite enough forests locked up already. In fact, in an important respect we have too much locked-up forest.”

Abbott pointed to the new Forest Industry Advisory Council and the Regional Forest Agreement Act. The Council will be led by Rob de Fegely, the president of the Institute of Forests Australia. The Regional Forest Agreements are 20-year plans for the conservation and sustainable management of Australia’s native forests, and are intended to provide certainty to commercial forestry operations while protecting environmental values.

Australia’s Bureau of Statistics estimates that there are 147.4 million hectares of native forest in Australia – about 19 per cent of the land area. The two most dominant timber species are Eucalyptus and Acacia, both hardwoods. Plantation forests occupy just over two million hectares, of which 1.024 million hectares are softwood. There is huge potential to expand Australia’s softwood plantation forests.

The volume of Australian timber harvested from native forests has been more than halved over the last 10 years to 4.8 million cubic metres (43 per cent), while the volume harvested from plantation forests has increased fivefold to 3.5 million cubic metres. Just under half of this is hardwood.

The total value of forest product exports was $2.3 billion. Wood chips comprised 38 per cent and paper products 29 per cent. In 2010, the value of wood product imports was $4.2 billion, of which paper and paperboard was 52 per cent. There was a wood trade deficit or $1.9 billion. No wonder it’s political.

By 2011-12 Australia had net imports of 497,900 cubic metres of rough sawn and dressed softwood. Major sources were Canada (58,000 cubic metres), Germany (41,700 cubic metres), New Zealand (273,700 cubic metres), the United States (49,900 cubic metres), China (35,900 cubic metres) and Taiwan (48,300 cubic metres.)

In contrast New Zealand has grown its total timber harvest from 12.07 million cubic metres in 1990 to 28.275 million cubic metres by June 2013. Of this, timber taken from indigenous forests has dminished from 0.14 million cubic metres in 1990 to only 0.06 million cubic metres in 2013. Their mix of use for timber harvested was approximately 25 per cent sawn logs, 35 per cent peeler logs, four per cent small logs, 10 per cent pulp logs, one per cent chip logs and 25 per cent export logs. Forests are important parts of the NZ economy.

New Zealand meets its own net construction timber needs. There is a strong correlation between New Zealand’s plantation forest expansion over the last 20 years and the contribution forests have made to off-setting carbon emissions and imports.

But New Zealand’s plantation plantings of the 1990s have not been sustained and are forecast to be harvested by the end of this decade. Suggestions are that New Zealand may then miss its future emissions targets. They too may need to get planting new plantations. Patient capital is a challenge for forests.

New Zealand’s plantation forests are heavily invested by foreign companies such as Hancock Natural Resources (US), Timberland Holdings (Canada) and Japan’s Pan Pac Forest Products, sold to them by Carter Holt Harvey in 1993. New Zealand became China’s largest log supplier in 2013 with over eleven million cubic metres, just pipping Russia with just under ten million cubic metres. China consumed 500 million cubic metres of wood in 2011 of which 230 million cubic metres (46 per cent) was imported. Building construction represented 25 per cent of China’s timber usage.

These are interesting considerations for Australia as its timber industry wrestles with high lumber costs: impossibly low margins, shrinking investment and the sale of Gunns forest interests, Australia’s dependency on foreign softwood timber imports, increasing domestic demand and how wood may contribute to offsetting Australia’s future carbon emissions. All of this makes for quite a jigsaw puzzle.

On average Australians each consume one cubic metre of harvested log in the form of timber for home building, joinery, furniture and paper products each year.

My extensive investigations into the future of the global construction industry affirm long-term trends toward the industrialisation of the building process, and rapid developments in off-site building. These involve suppling value added construction elements which substantially reduce wasteful on-site fabrication processes and delays. Off-site engineered wood innovations such as those using Cross Laminated Timbers and timber composites are already making impressive steps forward overseas. I have predicted the three major trends in this area to be:

  • Wood will play a bigger role in construction’s future even if Australia does not grow it,
  • The growing use of engineered timbers in the northern hemisphere has global implications, and
  • Engineered wood products could help to hasten the industrialisation of construction in Australia, New Zealand and the South East Asian region with significant economic benefits.

Politics aside, one has to hope that the Ministers for Agriculture and Industry can get together and capture the moment where, in Abbott’s words, “the political cycle (seems to have) has swung back in the favour of the forestry industry”. The moment will need to have a longer term outlook than just a few political cycles. Trees take a while to grow. So the “happy days” may take a while to materialise.

The New Zealand experience is worth careful consideration, as are their initiatives to foster a domestic ‘off-site’ construction sector. Perhaps it’s time for collaboration?