Forestry slump could hurt New Zealand’s biofuel supply in future

A Ministry for Primary Industries survey shows forest companies intend to plant 51,800 hectares this winter, a 24% drop on 2023. Photo / 123RF

By RNZ

New data shows a sharp decline in new forest plantings in New Zealand, and there are warnings this could leave the country short of a biofuel source in years to come.

A Ministry for Primary Industries survey shows forest companies intend to plant 51,800ha this winter, a 24% drop on 2023.

Last year’s plantings were well below the area forestry companies indicated they would be planting in 2023 when asked as part of the 2022 survey.

Marcus Musson, a director of forest management company Forest 360, said this was concerning because New Zealand needed a long-term stable wood supply.

“What we have on the books over the next couple of years is definitely dropping, and it’s pretty hard.“

Musson said there had been a lot of foreign investment in establishing new forests, but that was waning.

“There’s a lot of uncertainty with the OIO (Overseas Investment Office) rules and the general negative sentiment.

“A lot of foreign investors are finding it pretty difficult to want to put funding into New Zealand to establish new forests.

Musson said New Zealand relied on a long-term stable wood supply to keep its industry going.

“So if we’re not planting trees now, then in another 25 to 30 years’ time we’re going to struggle to keep the supply up that we’re going to need in New Zealand.

“We are to switch to biofuel [for energy] and that will happen over the next three to five years, and we’re going to need that supply long-term to fuel the industry.

“Any cut-back now is not good.”

The MPI survey found planting expectations were influenced by uncertainty around forestry and the Emissions Trading Scheme, the OIO approval process, local government regulations and difficulty obtaining resource consents.

Musson said certainty was needed in forestry because of the flow-on impact to harvest contracting businesses and nurseries - both sectors now under pressure.

- RNZ