Policy needed to boost NZ's wood fuel use

The country has abundant wood residues which can be transformed into energy. Photo / File

Wood fuel could dramatically reduce New Zealand's industrial emissions within five years, but not without a policy framework that actively encourages it, Azwood Energy general manager Brook Brewerton says.

The country has abundant wood residues sitting in its hills which can be transformed into energy, he says. Some firms are starting to look at it as an alternative to coal, but many lack the capital to make the change.

Without that demand that fuel will remain in the hills, he said. The quickest way to drive that would be for the government to provide accelerated depreciation on renewable heat plant, or low-interest Crown loans for them.

"It's just waste and we can use it but we need to create the demand," he told BusinessDesk.

"Biomass is a proven technology and with a long-term, secure, mapped supply strategy it could dramatically cut our emissions over the next five years."

Heavy industry accounts for about 15 per cent of the country's emissions. Food processing, heavily reliant on hot water and steam, accounted for about a third of the almost 9 per cent that came from manufacturing in 2016, according to government data.

While the scope to reduce emissions from some high-temperature processes like steel and cement making is considered limited, the Productivity Commission earlier this year recommended that the Ministry of Business, Innovation and Employment and the Energy Efficiency and Conservation Authority take a more active role developing policy to reduce coal use in process heat, including greater promotion of biomass supply and use.

Crown forestry research institute Scion estimated New Zealand produced about 5.5 million tonnes of wood residues last year, of which just over 3 million tonnes – or 22 million gigajoules of energy – could be recovered. It expects those recoverable volumes to peak at 4 million tonnes and 27 million GJ in 2022, and trough around 2037.

Azwood has been recovering forestry waste around Nelson for 40 years and considers the Scion estimates conservative.

While the national residue volume is dominated by the Bay of Plenty, Brewerton notes that all regions have some wood and current demand is low. If demand did take off a lot could be done to use empty trucks and rail wagons on return trips to shift wood waste around the country.

Brewerton said a real barrier to current uptake is the poor advice some firms get on boiler design and fuel specification. Many consultants are not really across the technology and some are still designing projects with a "fossil fuel" mindset and little understanding of the properties of wood and how to burn it properly.

Azwood executives have previously complained that some projects are being designed for wood chip boilers when lower-cost, larger grade 'hog' would be a more economic wood fuel for larger-scale users.

Azwood is supplying Fonterra a blend of wood chip and hog which the company is blending with coal to reduce emissions from its Brightwater milk powder plant. It will use about 2,000 tonnes of wood a year.

The company also plans to convert its cheese plant at Stirling, near Balclutha, using industrial scale heat pump technology to run on electricity. That will reduce coal use there by about 9,700 tonnes annually.

Chris Win, Fonterra's operations manager for the upper South Island, said sites looking at alternative fuels have to look carefully at their overall energy needs.

Energy efficiency remains a major driver, but firms also have to look through their lower heat processes to see what can be provided with electricity, what still requires thermal and what lower-emission options they have for that, he said.

Developing a plan, without closing out options to use technologies that are still evolving or not yet economic, is also key.

"We need to get going on this as a country and as a company," he said.