Executive Summary: Converting forestry by-products into value-added products

Summary of Project and Key Findings (for public disclosure):
The Converting forestry by-products into value-added products study has successfully completed assessments on the costs and practicalities of collecting forest residues, on developing plants for two end-use options produced from forest residues and other low-grade wood, on the available plant technology options, and on market research of the end products.

The key findings from the study are that the post-harvest residues product is suitable for the end-uses investigated. The residue recovery trial quantified the cost of collecting residues from the cutover and from landings, with both being a considerably more expensive resource than using the low-grade pulp logs that are routinely harvested. The project also assessed the quality of the hog fuel samples indicating that there should be no issue with using this material as is, for industrial boiler applications.

The project assessed the technoeconomic of previously identified process/product options. One of these options was not recommended as it was considered risky from a market perspective despite a positive return on capital employed (ROCE) due to competitive alternative products and other market limitations. The other option was considered sufficiently positive to warrant further investigation into market development opportunities, and refining development and operational costs. The two location options for the plant had similar ROCE results but with different drivers of cost. The selection of which may be the preferred location would depend on matters outside of this study, including the potential for geothermal heat, and the distance to greater technical support, and to the forest feedstock.

Catalogue of IP Generated by the Project (kept confidential to the BPA):
The project created confidential IP in the detailed composition of recovered Lake Taupo Forestry residue, costs of collecting residue, and detailed techno-economics for regional processing cases.

Statement from the industry partner describing the business impact of the project (kept confidential to the BPA):
This study has addressed concern over the volume of residues left in the forest after clearfell harvest and the potential unrealised value that these represent. Furthermore, it has informed on ways to find economic uses for the low-grade wood that has been exacerbated by the recent closure of the WPI pulp mill at Karioi and the closure of the paper machine at the Kinleith pulp mill which represent a drop in demand of around 1.1 million m3 per annum of pulp logs and bin wood. It also provides data on the number of FTEs which may be employed in residue collecting and in processing, a key driver for the industry partners.

The industry partners are two large Māori forest Trusts, who put their lands into forestry leases over 50 years ago and now own those forests outright. Their key taonga is their 50,000 hectares of land, and while the bulk of this is being used for plantation forestry today, there is an ongoing obligation on the Trustees to be confident that this is the best use for the lands not just today but for the next century or more. Exploring how to improve returns from their forestry business, and looking at options to enter into wood processing, are important areas to be explored, and this study is a positive step in that direction.

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