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Bright prospects for global wood market justify bold rethink for New Zealand’s plantation forests

David Rhodes is the chief executive of the NZ Forest Owners Association, whose membership covers 70% of Aotearoa’s planted forests.

David Rhodes smiling to the camera.Discussion and scepticism about the future of global wood demand has arisen again with the recent launch of Te Uru Rākau’s draft Forest and Wood Industry Transformation Plan.

Questions have been raised about the health of the Chinese construction market in conjunction with the Aotearoa forest industry’s well-known reliance on exporting logs to market in China.

However, the ITP is seeking to offset that risk exposure. It is clearly aimed at achieving a radical move away from log exports and into further processing and supplying an environmentally friendly bioeconomy.

This direction is endorsed by worldwide predictions of the bullish appetite for wood and wood products.

International investment consultancy Gresham House expects timber consumption to rise by 3.1% per annum for the next 20 years, which would double the present growth rate.

This expectation is based on worldwide urbanisation and decarbonisation of national economies. Both will require large wood volumes.

A research paper published by the Potsdam Institute of Climate Research predicts that global forest plantation areas will have to double or triple from the present 132 million hectares by 2100 to meet demand for construction with modern engineered timber, mostly for use in mid-rise accommodation.

Foresters also have a significant interest in the potential of an expanding bioeconomy. 

The biofuels sector is already growing rapidly. That appetite for sawmill and chipping forest waste is adding previously unrealised value to excess material that used to be a forest debris flow risk or disposal problem.

Leading that drive are the dairy companies Fonterra and Danone. The export value of milk powder products from New Zealand is more than $11 billion per year, more than half of the dairy industry’s total export returns.

Reducing milk down to powder requires massive amounts of energy, mainly sourced currently through the burning of coal.

However, Aotearoa must change to meet consumer expectations. Overseas markets have made it markedly clear that if they are to continue to buy milk products from New Zealand then coal burning must be phased out.

The World Bank has projected that the global demand for wood fibre will quadruple by 2050, in part because of robust growth in the wood energy market. 

Solar and wind electricity generation will be increasingly important. But both are vulnerable to weather fluctuations.

Nuclear energy is becoming fashionable again in global debates around energy security, but even the conceptual modular and small-scale plants being considered by some countries will take many years to become operational. Practical nuclear fusion energy remains elusive.

In the meantime, there is a sustainable and tangible solution at hand that creates a big opportunity for New Zealand’s foresters.

Wood fuels will increasingly replace fossil carbon sources of energy to help slow the flow of carbon out of the ground and dangerously into the atmosphere.