Sydney Morning Herald
Saturday 30/10/2010 Page: 14
Clearing forests may enrich those who are doing it, but over the long run it impoverishes the planet as a whole". That's not tree-hugging blather, but a leader in The Economist a few weeks ago. The magazine wants governments to "move fast" to save the world's forests, describing them as "purveyors of water, consumers of carbon, treasure-houses of species... ecological miracles". "Without a serious effort to solve this problem", the leader concluded, "the risk from climate change will be vastly increased and the planet will lose one of its most valuable, and most beautiful, assets. That would be a tragedy".
A map of the world, inside the magazine's special report, coloured Australia bright red - one of a handful of countries, including Brazil and Indonesia, losing more than 500,000 hectares of forest a year since 2005. As climate change accelerates, it makes no sense to be chopping down native forest - the cheapest, largest scale carbon sequestration available. Land-use change (mostly deforestation) accounts for about 15 to 17% of global greenhouse gas emissions - more than all the world's ships, cars, trains and planes.
Afforestation, reforestation and reduced agricultural emissions could, the magazine reported, sequester 40 parts per million of greenhouse gas from the atmosphere by 2050. (We are at 450 ppm and rising; we need to get back to 350 ppm.) Old growth forest maybe especially significant in its ability to suck up carbon. Which is one reason there has been an ecstatic reaction to the peace deal negotiated this month to phase out native forest logging in Tasmania.
A lot of detail needs to be fleshed out, and there is plenty of scope for backsliding, but the immediate focus has switched to the mainland. Can a similar coup be achieved here? Talks are beginning, but it looks hard. At Eden, on the NSW south coast, the Japanese-owned South East Fibre Export woodchip mill is locked in a 40-year fight for survival against conservationists.
Its chief executive, Peter Mitchell, says that SEFE, unlike Gunns, does not have the option of switching to plantation. Too much nearby forest is protected, or is state forest which cannot be converted to plantation. Woodchip prices are down. A value-adding pulp mill is not an option-the region does not have enough water and, at roughly a million tonnes a year, throughput is too small to justify the investment needed. The mill is a major employer in the Eden area, whose economy the federal Labor MP Mike Kelly - also the parliamentary secretary for forestry - describes as tenuous. Parliamentary library research he's done confirms SEFE can't move to a wholly plantation base.
A bright spot for SEFE was a proposal, now before the NSW government, to build a 5MWs biomass plant to burn so-called fines - residues from their own mill, and from nearby sawmills - to generate renewable electricity. At the moment the residues either help power the Bega Cheese factory or are sold as mulch and carted away. Some is wasted. The plant would power the mill and, if excess power was sold on and Renewable Energy Certificates (RECs) generated, it could be a nice little earner.
SEFE estimates that on top of turnover of about $70 million a year, if the biomass plant generated its forecast 31,000MWh a year, sold on at $80/MWh (based on a REC price of $35 and a wholesale electricity price of 5.50/kW) it would pull in about $2.5 million.
Which is not make-or-break. SEFE will survive if the plant does not getup. A key question is whether the local retailer Country Energy, the only logical buyer, will buy power from a controversial project. Mitchell says Country offered SEFE an indicative price a year ago. "They'll buy it", he says, "but they wouldn't sell it as Green Power". Country dodged the question this week, saying it has all the renewable energy it needs for now.
Conservationists fear the Eden biomass proposal is a test case, the thin end of the wedge, which would provide avast new market to prop up native forest logging, just as the economic case for traditional woodchip operations is unravelling. It may seem crazy to log native forest for renewable energy now, but if a carbon price is brought in, and it rises as expected, dragging REC prices up with it, what now seems uneconomic could soon become a major industry. It is a deal breaker for the environment movement if native forest can be burnt to generate "renewable" energy.
"It's the number-one conspiracy theory we get thrown at us", says Mitchell, adding that the REC regime incorporates a "high value test" that prevents logging for the primary purpose of generating energy. NSW environment protection laws prevent use of forest residues for power generation. Mill residues are OK.
Kelly, whose seat of Eden-Monaro takes in both the Snowy Hydro scheme and Infigen Energy's Capital Wind Farm at Bungendore, wants the region to be Australia's renewable energy flagship and is working with the Clean Energy for Eternity movement, which promotes a "50/50 by 2020" emissions reduction target. Kelly is a cautious supporter of the SEFE project as long as it does not use native forest waste, although he supports native forest logging in the region.
The forestry division national secretary of the Construction Forestry Mining and Energy Union, Michael O'Connor, is equally guarded. The union's position will depend on the outcome of collective agreement negotiations at SEFE. "We're not going to support any employer... if they don't have good, safe union jobs. It's a bit like someone you live next door to. If they're rude to you, you're less likely to help them out".
paddy.manning@fairfaxmedia.corm.au
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