Assessment of wood processing opportunities aligned with industrial heat demand in Southland Wood Energy Industrial symbiosis project – Aim 3 resource convergence opportunities

Peter Hall & Barbara Hock

(i)

Report information sheet

Report title Assessment of wood processing opportunities aligned with industrial heat demand in Southland

Authors Peter Hall & Barbara Hock Scion

Client MBIE

MBIE contract PROP-37659-EMTR-FRI number

SIDNEY output 60405 number

ISBN Number

Signed off by Paul Bennett

Date March 2018

Confidentiality Confidential (for client use only) requirement

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Neither Scion, nor any of its employees, officers, contractors, agents or other persons acting on its behalf or under its control accepts any responsibility or liability in respect of any information or opinions provided in this Report.

Published by: Scion, 49 Sala Street, Private Bag 3020, Rotorua 3046, New Zealand. www.scionresearch.com

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Executive summary

This report presents analyses of the current and projected wood resource and wood processing along with existing heat demand in Southland and Clutha with the aim of identifying wood energy industrial symbiosis opportunities.

Key results The Southland region has a limited supply of Pinus radiata logs excess to its processing capacity. However, there are increasing supplies of Douglas fir logs over time and potential to add some sawlog supply from the Eucalyptus nitens harvest. Clutha has a larger long term supply of Douglas fir than Southland.

The supply of wood residues from forest harvest and wood processing were determined. For forest residues Southland has a long term supply of 50,000 green tonnes per annum of landing residues and a further 20,000 green tonnes per annum of cutover residues. Clutha has similar volumes.

Southland also has an abundant supply of lignite and coal which fuel a number of primary processing industries (e.g. dairy and meat processing).

This analysis looks at the potential for expanded wood processing based on the currently unused log supply with integrated process heat supply to non-wood processing such as dairy factories and freezing works.

When looking at log supply in the Southland region, using the territorial authority boundaries is not necessarily the most useful, and the log supply in the Clutha district was included as part of the analysis due to its scale and proximity.

There is significant heat demand across Southland and Clutha, largely from dairy and meat processing.

There are a range of location options in Southland and Clutha where expansion of wood processing could be collocated with dairy or meat processing with the wood residues that are not required by the wood processing operations making a useful contribution to the heat demand currently generated from fossil fuels (coal and LPG).

Capital investment of $80 to $140M would be required, with a RA ROCE of 20 to 26%. Impacts on employment and GDP are substantial, but vary with the scale of the wood processing installed.

There are substantial numbers of jobs that could be generated from these wood processing developments, along with the associated GDP gains. These gains depend on the decision to have one larger site or two smaller sites.

For example, a large wood processing cluster located near Balclutha would have a capital weighted RA ROCE of 26% and would create 1296 jobs (direct and indirect, with an increase in GDP of $270 million per annum.

This site could displace coal or gas fired heat demand and reduce GHG emissions by up to 22,000 tonnes per annum.

Implications of results There are opportunities to co-locate expanded wood processing with existing coal, lignite and LPG demanding sites based on the Douglas fir resource in Clutha and Southland.

The processing would be a mix of primary (sawmilling) and secondary (cross laminated timber and remanufactured lumber) along with the production of engineered wood products from K grade logs.

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Assessment of wood processing opportunities aligned with industrial heat demand in Southland: - Wood Energy Industrial symbiosis project – Aim 3 resource convergence opportunities

Table of contents

Executive summary ...... 3 Introduction ...... 5 Methods ...... 7 Wood resource ...... 7 Wood processing demand ...... 7 Heat plant and heat demand ...... 7 Biomass supply model ...... 7 WoodScape model...... 7 Energy supply data ...... 8 Results and Discussion ...... 8 Southland wood supply ...... 8 Southland wood processing demand ...... 14 Southland and Clutha log and chip exports ...... 16 Wood processing expansion options for Southland & Clutha ...... 16 Coal supply & demand, Southland and Clutha...... 18 Electricity demand and supply – Southland & Otago ...... 19 Gas demand supply – Southland and Otago ...... 19 Industrial heat demand - Southland ...... 20 Industrial heat demand - Clutha ...... 20 Wood processing expansion opportunities ...... 21 Southland and Clutha opportunity separately ...... 23 Discussion ...... 27 Estimate of economic impacts ...... 27 Conclusions ...... 28 Glossary ...... 29 Acknowledgements ...... 29 References ...... 30 Appendix A - Wood processing plants - Southland ...... 31 Appendix B - Wood processing plants - Clutha District...... 32 Appendix C – Eucalyptus plantation area Southland & Clutha ...... 33 Appendix D - Residue production and energy demand by processing type ...... 33 Appendix E – NZ energy costs; 2017 ...... 34

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Introduction

The Wood Energy Industrial Symbiosis project is aimed at determining opportunities to group expanded wood processing with other primary processing industries, such as dairy and meat, based on the; existing forest resource, processing infrastructure, and available wood supply. Local energy supply and demand is also considered. Constraints on supply of electricity, coal and gas are included.

Opportunities vary by region, depending on the wood resource (including changes in supply over time), existing wood processing demand and energy infrastructure and demand. The goal is to identify mutual benefits such as wood residues to heat for primary processing (dairy, meat etc.).

Previous regional studies in the Wood Energy Industrial Symbiosis project have focussed on Kawerau, Ngawha and Gisborne (Hall 2013, Hall et al 2016, Hall et al 2017a, and Hall et al 2017b). The ability to access geothermal heat had a significant influence on the results for Kawerau and Ngawha, as the use of geothermal heat can displace the use of wood residues for fuel, allowing them to be moved to other sites with a heat demand, or to be used for feedstock for further processing. Gisborne is distinctive as it has a substantial wood resource, limited existing wood processing, is far from coal mines and is reliant on gas and electricity infrastructure which has some limits on its capacity.

This study is focussed on Southland. Southland has massive lignite and coal resources, mixed primary processing (e.g. dairy, meat, wood) and has a wood resource that is substantial and more diverse in its species composition than many northern regions (MPI, 2016).

The three territorial Authorities in Southland (Invercargill, Gore and Southland) are the main focus but some note has to be taken of Clutha district as it has a substantial wood resource to the south and inland of Dunedin (Figure 1). Regional or territorial authority boundaries are not necessarily the most useful line of demarcation when it comes to resource analysis and utilisation. Invercargill and Gore are small largely urban areas. Southland and Clutha are large rural areas.

The combined wood resource in Southland and Clutha has the capacity to support additional wood processing. The key questions are; what type, what size, where and how these can be aligned with other industries.

The WoodScape study (Jack et al, 2013) produced a model (WoodScape) which allows comparison of many wood processing options from a common basis. This model was used in this study to determine some wood processing opportunities that fit with the type and volume of logs available over time.

This study will; identify the fluctuations in wood resources over time, assess this against the existing wood processing and log exports, assess the availability of energy such as coal, gas and electricity and identify heat demand from existing primary processing. Then it assesses the opportunities for expanded wood processing and any potential to align this with current heat demand.

Figure 1 shows the state highway and rail infrastructure in Southland and Clutha, along with the territorial authority boundaries. Plantation forests are shown in light green and native forests in brown. Concentrations of plantation forest are clearly visible and the adjacency of many of the Clutha district forests to the railway line is apparent.

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Figure1 – Forests and transport infrastructure – Southland

Major wood processing sites are shown with yellow (sawmill) and orange (MDF mill).

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Methods

Wood resource The Southland region and Clutha district wood resources are described in the Ministry of Primary Industries National exotic forest description (NEFD) (MPI 2016). This data shows species by age class and area, and along with the MPI yield tables this allowed prediction of potential wood availability over time. It also allows the prediction of forest harvest residues based on the potential harvest volumes, based off estimates of the proportion of a crop that is discarded (Hall 1998).

Further data is available from the MPI wood availability forecasts for Otago and Southland (MPI 2014). These forecasts do not cover the Eucalyptus nitens resource and data on this resource is generated from the NEFD. Scenario 3 from the Otago and Southland wood availability forecast (MPI 2014) was used as it was deemed to be the most likely of the possible future wood supply and harvest options.

From these data an estimate of log volume available over time, above existing processing capacity and demand can be derived. This volume can be broken down into 5 broad categories; pruned logs, S, A and K grade sawlog and pulp / chip grade log. The sawlog and pulp log volumes were obtained from MPI 2016b and an estimate of the S, A and K grade split for unpruned sawlogs was derived from the forest growth model Radiata Pine Calculator Version 4 Prad_Calcv4.0) (Knowles 2007) and MPI data on regional planting by regime in the Southland and Otago regions (MPI 2016a).

Wood processing demand Wood processing demand was derived from a range of sources and is held in a wood processing database (Scion 2017). A key reference was Vaney and Nielson 2016 along with industry news letters (WoodWeek, Friday Offcuts) and industry contacts. Further information was derived from on-line searching and Google Earth. The wood processing industry is dynamic and a complete dataset of all wood processors is not publicly available. The Scion wood processing database captures all the major wood processors along with many of the smaller and secondary processors such as remanufacturers. The dataset has 224 wood processing sites identified nationally, with 14 in the Southland region and 5 in Clutha district.

Heat plant and heat demand Current use of industrial heat was derived from the EECA heat plant database (2014) with updates from other work in the Wood Energy Industrial Symbiosis project. This dataset provides information on heat plant by location, size, loading, industry and fuel type.

Biomass supply model Scion has developed a GIS based biomass supply model (BSM) (Hock et al, 2012). This model allows data on forests, wood processors and other sources of woody biomass (e.g. Municipal wood waste) to be analysed to show volumes available by distance from a selected delivery point, over time. Delivered cost can also be assessed, allowing for harvesting cost by terrain type and transport costs by distance.

WoodScape model Once the data on log supply and demand has been derived, the processing opportunities can be assessed using the WoodScape model (Jack et al 2013). This model allows the techno-economic analysis of a broad range of wood processing technologies (49), which are selected from a list of 110 options (which includes plant scale variations), aligning with the volume and type of logs available. The costs and prices used in this model were updated to 2017 values.

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Energy supply data

Coal Southland has large coal and lignite resources – data on these were gathered from a previous report in the Wood Energy Industrial Symbiosis project (Hall et al, 2016).

Electricity Electricity supply is not a constraint in Southland, with good generation and distribution infrastructure. There is potential for large-scale cheap supply of electricity in Southland and Otago if the Tiwai Point aluminium smelter closes, which is something that is frequently mooted as a possibility, but has yet to happen.

Gas There is no natural gas supply via pipeline in the South Island. Industrial gas supply via LPG bottles and tankers is possible, but expensive (>$26 to $28 / GJ) (Index Mundi, 2017).

Results and Discussion

Southland wood supply The supply of Pinus radiata logs in Southland over time (MPI, 2014) by grade is shown in Figure 2. The supply of pulp logs is close to the demand. The regional shortfall being made up from logs brought in from Clutha district.

The supply of pruned logs is slightly less than the pruned log demand (100,000 m3 per annum). The shortfall being made up from logs sourced from Clutha District.

The supply of unpruned Pinus radiata logs will exceed the demand by around 100,000 m3 per annum for around 15 years before supply drops below current demand.

Figure 2 – Radiata wood supply in Southland

Figure 3 shows the supply of Douglas fir logs in Southland over time. There is a steady increase in the supply volume from this species from around 2028 onwards. Current supplies are less than

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100,000 m3 per annum, but the potential harvest volumes increases substantially post 2028, reaching an estimated supply of over 600,000 m3 per annum by 2045.

Figure 3 - Douglas fir log supply in Southland

Figure 4 shows the combined unpruned Pinus radiata and Douglas fir sawlog supply for Southland. As Pinus radiata volume drops off Douglas fir volume increases. Overall total volume increases from around 2028. This has implications for saw millers. Some Pinus radiata mills will have to take at least some Douglas fir to maintain their current production volumes. There is an opportunity in Southland for expanded Douglas fir processing in the order of 200,000 m3 per annum from 2028 onwards.

Figure 4 - Southland unpruned sawlog supply – Pinus radiata and Douglas fir

When the log supply in Clutha Distract is included there is a significant supply of unpruned sawlogs above the combined demand of mills in Southland and Clutha (715,000 m3 per annum). This

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excess in supply is in the order of 560,000 m3 per annum now and climbs to around 2.0 million m3 per annum by 2045. The long run average post 2020 is around 1.4 million m3 per annum. This is a substantial resource with implications for expanded wood processing.

Figure 5 – Southland and Clutha radiata and Douglas fir unpruned sawlog supply

The estimated volumes of Eucalyptus nitens harvest is shown in Figure 6. Currently all this resource is chipped at Awarua and exported via South Port. The trend is for a significant decline in harvestable volume over the next 10 years.

Figure 6 - Eucalyptus nitens log supply in Southland and Clutha

Log supply in Clutha District is shown in Figure 7. The peaks for the Pinus radiata and Douglas fir log supply are both apparent, with Pinus radiata supply peaking at 1.2 M m3 per annum in 2031 to 2035 and Douglas fir at around 800,000 m3 per annum in 2036 to 2040.

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Figure 7 - Clutha log supply

In Clutha the long run availability of radiata logs is expected to be around 600,000 m3 per annum and Douglas fir at over 400,000 m3 per annum. Local sawlog demand in Clutha District is around 240,000 m3 per annum. This leaves spare logs to be either sold to processors in Southland or exported off-shore via South Port or Port Chalmers.

Forest Residue supply There are always in-forest residues associated with forest harvesting. The estimated volume of these is shown in Figure 8. The two different types of residues will have different costs, and the greater the volume that is demanded, the higher the average delivered cost will be, as longer transport distances will be required to access increasing volumes. Volumes fluctuate over time in line with harvest volumes. Figure 8 shows that in Southland the cheaper residues (from landings) will have a long run supply of around 40,000 cubic metres per annum (276,000 GJ). These residues are likely to cost in the order of ~$8 per GJ delivered (Hall 2017). Cutover residues which will be slightly more expensive have a long run supply of around 50,000 m3 per annum (345,000 GJ), with an estimated typical cost of ~$9 per GJ.

Figure 8 – in-forest residues supply - Southland

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The Biomass supply Model (BSM) was run with 3 delivery points (Figure 9 A, B and C.). These sites were; A. Edendale - large dairy factory, lignite demand B. Mataura - 2 meat works (1 small), coal demand C. Wallacetown – 2 meat works, coal demand

The cost supply curves for all these sites are similar (not surprising as the resource is the same, but transport to the delivery point will vary) and show that the cost of supply increases with distance and available volume varies over time.

There is likely to be some smoothing of the harvest volume which will reduce the peaks and troughs. The delivered cost of 100,000 green tonnes (690 GJ) of biomass (as hog fuel) is likely to be in the order of $58 to $62 per green tonne ($8.50 to $9.00 per GJ). If the demand rises to 200,000 green tonnes (1,380 GJ) the weighted delivered cost rises to $62 to $68 per green tonne ($9 to $10 per GJ), and in some periods, this volume of supply will not be available. The increase in costs reflects the increasing transport distance required to deliver a larger volume to a specific site.

The change in the shape of the curves; steeper at low volumes, flatter at higher volumes, is a reflection of the delivery locations in relation to the forest resource. That is, most of the heat demands are not close by to large areas of forest and as the transport distance increases so does the radius (and land area) of the working circle. This means more forests are is potentially available per unit of distance increase.

Figure 9 (A – Edendale, B - Mataura and C - Wallacetown). Cost supply curves for residues delivered to locations in Southland with existing coal fired heat plant

Figure 9A.

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Figure 9B.

Figure 9C.

Figure 10 shows the in-forest harvesting residue volumes available in Clutha District over time. The long run supplies are around 45,000 m3 per annum for landing residues (310,000 GJ) and 60,000 m3 per annum (415,000 GJ) from cutover residues.

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Figure 10 – Clutha District in-forest residues supply

Figure 11 shows the BSM output centred on Balclutha. The delivered cost for 100,000 green tonnes is $62 to $66 per green tonne. The model was only run to a distance of 200km (road distance) from the delivery point. This was assumed to be the maximum realistic transport distance.

Figure 11 – BSM data for Balclutha

Further, it has been estimated (Millar, 2015) that there is around 35,000 m3 per annum of short length pulp grade logs left in South Otago forests as there is no viable market for this material. This is in addition to the estimated 105,000 m3 per annum of K grade logs exported via Port Chalmers each year. It is also additional to the volumes of residues shown in figure 9. The cost of this material is likely to be at least $50 per m3 (delivered as logs).

Southland wood processing demand The wood processing sites in Southland and Clutha are shown in Tables 1 and 2 (Appendix A & B for details). The majority of the processed wood harvest volume in Southland goes to 4 of the 14

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sites; the chip mill at Awarua, the MDF mill at Mataura and the 2 larger sawmills (Winton and Kennington – both taking over 200,000 m3 per annum).

Table 1 - Southland district wood processing Processing Type No. Log Chip Chip Wood Fuel intake, intake, Production Residues at m3 p.a. m3 p.a. m3 p.a. mill; equiv. equiv. m3 p.a. equiv. MDF* 1 240,000 160,000 - -77,000 Sawmills 9 580,000 - 152,000 153,000 Treated posts poles 2 10,000 - - 1,000 Chip Mill** 1 270,000 - 265,000 6,000 Total 14 985,000 160,000 399,000 83,000 *includes some billet wood essentially very short pulp logs (1.0 to 2.5m).

**volume for 2016 – chip mill production is dictated by the harvest volume available, this is likely to drop substantially over the next 10 years (Figure 5).

Of the sawlog demand in Southland, around 102,000 is for pruned logs and the remaining 478,000 is for S and A grade logs. The K grade logs (larger knots) go to export.

The wood processing residues available for fuel in Tables 1 and 2 are volumes above those required by the mills for their own use. The MDF mill needs to import fuel as it is an energy intensive process and sawmills with drying kilns generally only need to burn some of their residues to provide the required heat.

Millar (2015) states that many sawmills in Clutha and Southland have established markets for their mill residues; selling chip, sawdust and shavings to dairy farms for cattle bedding (calving and stand-off pads). This material often sells for $20 to $30 per cubic metre ($55 to $82.5 per green tonne) (Romero pers comm.1). Therefore, whilst potentially a fuel source this material has a competing market and any energy use would have to meet this price.

One sawmill in Southland dries 250m3 of chip per week for the fuel market.

Table 2 - Clutha district wood processing Type No. Log Chip Chip Wood Fuel intake, intake, Production Residues at m3 p.a. m3 p.a. m3 p.a. mill; equiv. equiv. m3 p.a. equiv. Sawmills 5 238,000 - 69,550 63,590

The majority of the Clutha processing volume is located at 2 saw mills in or near Milton.

In Clutha district the log processing demand is made up of, 20,000 m3 per annum of pruned logs and the rest is S and A, with a small amount of Douglas fir and some Cypress (macrocarpa) minor species.

The largest sawmill in Clutha (200,000 m3 p.a.) takes A grade logs. The K grade logs go to export.

Whilst the forests in the south produce logs that dimensionally meet an external S grade specification (length, diameter, knot size and straightness) many of these logs are not of sufficient density or stiffness to make structural lumber. There are no dedicated structural mills in Southland although some structural lumber will be produced from the outer sections of the older, larger S grade logs from pruned stands.

1 Alvaro Romera, Dairy NZ, March 2018.

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Southland and Clutha log and chip exports

Log exports via Port Chalmers and South Port have been increasing over the last few years (Figure 12), indicative that there is currently an oversupply of logs versus processing demand.

Figure 12 – Log exports via Port Chalmers (Otago) South Port (Bluff / Southland)

In 2016 155,380 bone dry units (BDU) or 270,000 m3 log equivalent (le) of hardwood (E. nitens) chip were exported via South Port (Bluff). Volumes in previous years were; 2014 162,000 m3le and 2015 207,000 m3le. The trend currently is for increasing export volumes. However, based off the age class data for the hardwood plantation resource (Appendix C) this volume is expected to decline in the next 5 to 10 years.

Softwood chip exports via Port Chalmers ended in 2012. In the last three years (2010 to 2012) of this market exports were in the order of 65,000 m3 of log equivalent. The loss of this market was a problem for saw millers in Clutha. Dairy farm stand-off pads are a viable alternative market.

Wood processing expansion options for Southland & Clutha When log supply and demand data is combined for Southland and Clutha, taking into account the very peaky log supply for the main species, we can determine some long term opportunities (Tables 3 a, b & c) based on log volumes not required for existing processing.

These volumes dictate the type of wood processing that could be developed and this has an effect on the wood energy demand / wood residue supply as some wood processing is energy intensive (MDF) and some is not (sawmilling). They also generate differing levels of residuals (Appendix D).

Table 3a – long term wood supply and demand; Southland Southland Log type Long run supply Mill demand; Available for m3 per annum m3 per annum processing; m3 per annum Radiata pruned 50,000 102,000 - 50,000 Radiata unpruned 600,000 dropping to 480,000 +120,000 dropping to 350,000 - 130,000 Radiata pulp 150,000 260,000 - 110,000 Douglas Fir 250,000 10,000 + 240,000 Eucalyptus nitens* 20,000 - + 20,000 *Sawlog potential

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Table 3b – long term wood supply and demand; Clutha Clutha Log type Long run supply Mill demand; Available for m3 per annum m3 per annum processing; m3 per annum Radiata pruned 50,000 20,000 + 30,000 Radiata unpruned 280,000 210,000 + 70,000 Radiata pulp 30,000 - + 30,000 Douglas Fir 350,000 5,000 + 340,000 Eucalyptus nitens* 1,000 - 1,000 *sawlog potential

Table 3c – long term wood supply and demand; Southland and Clutha Southland + Clutha Log type Long run supply Mill demand; Available for m3 per annum m3 per annum processing; m3 per annum Radiata pruned 100,000 120,000 - 20,000 Radiata unpruned 880,000 dropping to 690,000 +190,000 dropping to 630,000 - 60,000 Radiata pulp 180,000 260,000 - 80,000 Douglas Fir 650,000 15,000 635,000 Eucalyptus nitens* 20,000 - + 20,000

All unpruned sawlogs 1,530,000 dropping to 705,000 825,000 dropping to 1,280,000 575,000 *sawlog potential

The unpruned Pinus radiata resource (especially the S and A grade logs) available in the short term could be absorbed by existing mills which are typically not running at full utilisation.

Unpruned Pinus radiata sawlog volumes in Southland and Clutha are expected to be made up of approximately 1/3rd each of S (small knots, <6cm), A (medium knots, <10 cm) and K grades (large knot, <15 cm) (Table 4). S and A grades in Southland are suitable for appearance and industrial sawing. At the moment K grade logs are largely exported.

Table 4 – Pinus radiata log prices (NZ national average, $ per tonne delivered to wharf or mill) Grade Specifications Average Price P1 Peeler Sed 400mm, knot size = 0, length 3.7m to 4.8 m $179 P2 Sed 300mm, knot size = 0, length 3.7m to 4.8 m $144 Export P Sed 360mm, knot size = 0, length >4.0m $163 S1 Sed 400mm, knot size =6cm, length 4.8m to 6.1m $123 S2 Sed 300mm, knot size =6cm, length 4.8m to 6.1m $123 S3s Sed 300mm, knot size =6cm, length 3.7m to 4.7m $114 L 350 Sed 350mm, knot size =13cm, length 4.9m to 6.1m $116 A Sed 300mm, knot size =10cm, length 3.7m to 6.1m $125 K Sed 200mm, knot size =15cm, length 11 to 12 m $117 KS Sed 200mm, knot size =15cm, length 3.6m to 4.0m $116 KI Sed 2600mm, knot size =25cm, length 4m $110 Posts & Poles Variable – low taper, small knots, small diameter $ 92 Pulp Sed 100mm, knot size =no limit, length 3.7m $ 49 *prices will vary by forest location

The clear opportunity for new processing lies with the expanding Douglas fir resource in both Southland and Clutha. The larger opportunity is in Clutha. If a large scale processing site made

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sense from an economies of scale perspective, it could be sited at or near Mataura (Southland), as this is central to the resource, has good transport infrastructure and potentially a heat demand (meat works). An alternative site would be Balclutha (Clutha), which also has heat demands, from both meat and dairy processing as well as being closer to the forests.

Douglas fir logs are sold by different grades to Pinus radiata and have differing but related prices. There is a lack of in depth information on Douglas fir log prices as this product is very much a minor part of the market.

For New Zealand nationally Pinus radiata is ~90% of the plantation estate by area and a greater proportion of the harvest volume, Douglas fir is 6% of the area.

In Southland Douglas fir is 31% of the plantation forest area and for Clutha 26%. Currently Douglas fir harvest volumes are low but as the data in in Figures 4 and 8 show – this will change over time.

Likely Douglas fir log prices based of historical domestic and international prices are presented in Table 5.

Table 5 – indicative Douglas fir log prices 2016 (delivered to wharf or mill) Grade Specifications Prices - high Prices - low A Sed 300mm, branch<70mm, length >4.8m $145 $128 B Sed 240mm, branch<70mm, length >4.8m $130 $121 C Sed 160mm, branch<70mm, length >4.8m $124 $116 D Sed 200mm, branch<150mm, length >4.8m $105 $100 Export pulp Sed 120mm, branch<150mm, length >3.8m $100 $48 Firewood Sed n.a., branch n.a., length <6m $68 $48 *Source; Laurie Forestry website – accessed November 2017. Prices will vary by forest location.

Douglas fir is generally unpruned and is suitable for structural processing with most logs being small to medium in knot size. Pulp grade logs would make up a small proportion of the total harvest volume (~10%).

Coal supply & demand, Southland and Clutha.

The recoverable coal and lignite resources in Otago and Southland (Figure 13) are extensive. These have been estimated (GNS, 2017) as 21,397 PJ in Otago (14.6% of NZ’s total coal resource) and 95,837 PJ in Southland (65.3% of NZ’s total coal resource).

Figure 13 – Coal fields in Southland and Clutha

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Coal for industrial use is relatively cheap; for example Kai Point coal sells industrial nut size for $130 / tonne ex-the mine (transport to the user is additional) (Kai Point Coal website, November, 2017). This price is the equivalent of $6.60 per GJ. Lignite is believed to be slightly cheaper.

Lignite and coal demand in Southland is in the order of 122,000 tonnes per annum across 28 sites. In Clutha lignite and coal demand is around 8,000 tonnes per annum.

Electricity demand and supply – Southland & Otago Electricity demand is Southland is in the order of 5,982 GWh per annum. However, the vast majority of this (5,602 GWh or ~93%) is used by the aluminium smelter at Tiwai point. Excluding Tiwai, the demand from other uses is 380 GWh. Electricity demand in Otago is 1,344.4 GWh.

Total electricity demand in Southland and Otago is ~7,326 GWH with a supply of ~9,686 GWh (EECA EEUDb, 2012). Based on this data it would seem that there is adequate generation capacity (all renewable from wind and hydro), with limited incentive for further generation.

Electricity supply in Southland is supplied from a 7 of generation sites (Table 6), with some also being delivered from 11 generation sites in Central Otago.

Table 6 – electricity generation capacity in Southland and Otago Region Site Type Installed MW GWh per year Southland Manapouri Hydro 854 4800 Southland Monowai Hydro 7.8 45 Southland Flat Hill Wind 6.8 26 Southland White Hill Wind 58 250 Southland Edendale Co-gen Lignite 3.8 16 Southland Balclutha Co-gen Coal 8.3 37 Southland Mount Stuart Wind 7.6 25 Sub-total 946.3 5199 Otago Clyde Hydro 432 2246 Otago Roxburgh Hydro 320 1812 Otago Other (9) Hydro 109.5 318 Otago Other (2) Wind 38.2 111 Sub-Total 899.7 4487 Total 1846 9686

Gas demand supply – Southland and Otago There is effectively no industrial natural gas supply in Southland and Clutha. With no local natural gas resources and no pipeline connection to the Taranaki gas fields.

LPG supply via large bottles and truck tankers is possible, and LPG use in the Southland District for industrial processing was 0.039 PJ in 2012 (EECA EEUDb).

LPG demand in Otago was 0.340PJ, with much of this used at the Danone milk processing plant near Balclutha.

The cost of LPG is linked to international prices, which are in the range of $26 to $28 per GJ. A delivery cost is likely to be additional and delivered costs could be in excess of $30 per GJ. Indicative energy costs by fuel type are shown in Appendix E.

LPG is an expensive fuel in terms of $ per GJ when compared to lignite, coal, wood or wood pellets.

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Industrial heat demand - Southland Based on the EECA 2014 Heat plant database and updates by Scion, University of Waikato and GNS there are 44 boilers in Southland. These range in size from 0.1 to 38MW of installed capacity. These boilers occur on 24 separate sites, there are a number of facilities that have multiple boilers. The largest site is the Edendale dairy factory with 4 boilers totalling 137 MW. Total installed boiler capacity in Southland is 357 MW, with an annual output of 2109 GWh. This equates to a fuel demand of 8.934 million GJ (equivalent to 1.294 M green tonnes of wood). Of the boilers in southland, 11 are already wood fuelled. The installed wood fuelled boiler capacity is 88.5 MW (Table 7).

Table 7 – Heat plant – Southland Fuel No. of Installed GWh per Green tonnes of boilers capacity annum wood equivalent LPG 1 1.5 7.8 4,836 Diesel 4 2.8 11.8 7,287 Coal 11 42.8 193.8 118,955 Lignite 15 212.5 1141 700,831 Wood 11 88.5 761.1 439,533 Total 44 357.5 2154.5 1,271,442 Total non-wood 33 269 1393.4 831,909

Industrial heat demand - Clutha There are 7 boilers identified in Clutha District (Table 8) they range in size from 0.5 to 22MW. There are 6 sites, the largest being at Balclutha. Total installed capacity is 61.5 MW. Of the total, 4 of the boilers (24.5MW) are already wood fuelled.

Table 8 - Heat plant - Clutha Fuel No. of Installed GWh per Green tonnes of boilers capacity annum wood equivalent LPG 1 13 54.5 33,400 Diesel - - - - Coal 2 18.5 56.6 34,729 Lignite 1 11 54 28,301 Wood 4 24.5 172 105,613 Total 8 76 375 202,000 Total non-wood 4 51.5 279 96,430

Summarising the data on wood residues from both in-forest and wood processing sources (Table 9) shows that there are significant volumes of wood residues potentially available in both Southland and Clutha, with large amounts of heat demand. This wood resource cannot meet all the heat demand, but could meet 30% of it. It could displace around 100,000 tonnes of coal demand, reducing GHG emissions by 200,000 tonnes of CO2e per annum.

Table 9 – Wood residues versus Southland and Clutha heat demand Wood residues Southland Clutha Total In-forest residues available 50,000 100,000 150,000 Wood process residues available 80,000 60,000 140,000 Total wood residues available 120,000 160,000 290,000 Heat demand in green tonnes equivalent 831,000 105,000 906,000

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Wood processing expansion opportunities The significant wood processing opportunity is based on the expanding Douglas fir resource. This is located mostly in Clutha and therefore the processing site is likely to be in Clutha, although two sites; one in each of Southland and Clutha is a possibility to consider.

Douglas fir has different properties to Pinus radiata but is also similar in some aspects, as it is a softwood (conifer) with a basic density of 400 kg/m3 (+/- 40). It is suitable for a wide range of processing options and is a common saw mill feedstock in North America. It is suitable for structural and industrial lumber, CLT, LVL, plywood (inners or industrial ply) Glulam, OEL™, OSB and particle boards. It can be used for MDF but is not a preferred feedstock for the Mataura MDF mill. It is not generally used as an appearance lumber due to the high number of knots.

Given the size of the resource in the long term (Table 10) there is insufficient material to consider products such as pulp and paper which generally have feedstock demands of at last 1.0 M m3 per annum or more. Equally there is insufficient pulp log resource to consider a particle board plant or OSB plant based on the pulp logs alone (the new particle board mill being mooted for Kawerau has a feedstock demand of around 600,000 m3 per annum). Therefore, the target product would likely be a structural and industrial sawmilling and a range of engineered wood products or reconstituted panel products.

In order to identify processing technologies that have the best financial returns the WoodScape model was used to compare the financial performance of a range of primary solid wood, engineered and reconstituted wood processing options that fit with the size of resource available. This analysis includes the use of the residues (slab-wood, chip, sawdust, shavings bark etc.) produced from the primary processing, which can be a significant proportion of the log in-feed volume.

Table 10 – Douglas fir volumes – long term supply Region D fir Sawlog volume D fir Pulp log volume Southland 215,000 25,000 Clutha 310,000 35,000 Total 525,000 55,000

The pulp log resource (Table 11) is too small to support a new development such as particle board and could be absorbed by the existing MDF mill, the export log market or as a heat fuel or animal bedding product, although the export pulp log price is quite high at an average of $68 per m3.

The sawlog volume needs to be looked at by grade (Table 11) which are principally driven by log diameter and knot size).

Table 11 – Douglas fir sawlog volume by grade. Log Grade Southland Clutha Total S 71,000 103,000 174,000 A 71,000 103,000 174,000 K 73,000 104,000 177,000 Total 215,000 310,000 525,000

S grade Douglas fir logs are suitable for structural sawmilling with the A and K suitable for industrial sawmilling and OEL™. The S and A grade logs could also be considered for LVL and industrial plywood.

The WoodScape model was run using the Douglas fir prices in Table 5, with no restrictions on the technologies. The down select of suitable processing options was done post the initial financial analysis to ensure that no promising options were overlooked. The WoodScape model calculates a range of financial metrics; return on capital employed (ROCE) internal rate of return (IRR) and net present value (NPV) as well as employment and GDP data.

The model runs in Excel and has had the @Risk add-in (Monte Carlo risk analysis) included in it so that the ROCE results can be risk adjusted for the viability in key inputs (feedstock cost, product price and exchange rate).

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Wood processing options that were promising based on current prices are shown in Figure 14. Only those processing options with risk adjusted (RA) ROCEs of over 10% and suitable for the available wood supply type and volume are shown in the graph

Figure 14 – RA ROCEs for Douglas fir processing options

Processing options with high RA ROCE’s that fit with wood resource are; - Small scale milling of Big Squares (RA ROCE 38.9%) fits Southland and Clutha - Remanufacturing – small scale (RA ROCE 23.5%) fits Southland and Clutha - OEL™ 100,000 m3 per annum in (RA ROCE 40.4%) fits Southland and Clutha - CLT 70,000 m3 per annum in (RA ROCE 31.8%) fits Southland and Clutha - Industrial lumber, (RA ROCE 20.9%) fits Southland and Clutha - LVL, (RA ROCE 21%) would require all the Southland and Clutha Douglas fir sawlogs - OSB Small 172k m3 log in (RA ROCE 14.3 %) - Remanufacturing 67,000 m3 pa lumber in (large scale) (RA ROCE 28.4%) - Sawmilling - Structural and Appearance / medium scale 360k m3 (RA ROCE 14.6%)

Both the Remanufacturing and CLT options would need a sawmill to provide them with the lumber feedstock that they consume. A mixed structural and appearance sawmill would have a RA ROCE of ~14.6% and would need a significant proportion of the resource available in Southland and Clutha. Whilst this is not necessarily attractive in its own right, the addition of the secondary processing taking the lumber from the sawmill improves the RA ROCE of the cluster considerably.

An option to consider would be a sawmill of around 360,000 m3 per annum of log in (RA ROCE 14.6%), co-located with a CLT plant of 70,000 m3 of lumber in (RA ROCE 29.5%) and a remanufacturing plant 65,000 m3 per annum in (RA ROCE 22.5%); on a capital weighted RA ROCE basis this option would have an RA ROCE ~26% (Table 12).

Table 12 – capital costs and RA ROCEs of a cluster suitable for the combined Southland and Clutha resource. Process Capital Cost RA ROCE% Capital weighted (millions) RA ROCE Sawmill $40 14.6 - CLT $65 31.8 - Remanufacturing $35 28.4 - Total $140 26%

Other options include OEL (108,000 m3 per annum in, RA ROCE of 40.4, using K and A grade logs (Pinus Radiata or Douglas fir)

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Plywood is not a preferred option with a RA ROCE of only 10% and needing to use mostly Douglas fir. Making plywood from Douglas fir would new to New Zealand.

The option of making Big squares for export is a small volume option which could be valuable as a niche opportunity.

A small OSB plant is an option, which could take the pulp grade Douglas fir logs and possible sawmill slab wood, it has a RA ROCE of 14.3% and so is not that attractive.

LVL has a RA ROCE of 21% and Douglas fir would make good quality LVL. However, LVL plants use all their own residues for process heat and have none left for use by others.

Wood processing expansion aligned with heat demand sites in Southland and Clutha

Table 13 - Wood residues available for high RA ROCE opportunities – combined Southland / Clutha resource Process Feedstock Volume Product Chip Residues Residues Residues in m3 out m3 m3 le Produced used for fuel GJ GJ GJ Sawmill S & A logs 360,000 200,000 120,000 434,000 420,000 14,000 CLT Lumber 70,000 60,000 - 69,000 34,000 35,000 Reman. Lumber 66,000 50,000 - 114,000 25,000 89,000 OEL™ K logs 100,000 57,000 - 267,000 133,000 134,000 Total 468,000 250,000 120,000 884,000 612,000 272,000 (Logs)

The Douglas fir resources of Southland and Clutha can be looked at separately. The types of process that would be used do not change, but the scale of the operations does and this affects the RA ROCES, reducing them somewhat. There are still opportunities to co-locate new processing with other primary processing industries with heat demand. The opportunities for this in Clutha are still focussed around Balclutha. The opportunities in Southland are focussed on meat works, with several of these being potential locations for new wood processing. The main areas of focus for this type of development would be Mataura and Lorneville / Makarewa (Wallacetown).

Southland and Clutha opportunity separately The wood resource in Clutha is slightly larger than in Southland but the potential processes and their scales are much the same (Table 14). A cluster of a sawmill providing feedstock to a CLT plant and a remanufacturing plant would have a capital weighted RA ROCE of 25.9%. This cluster would take the S and A grade logs. An OEL™ plant would take the K grade logs. The OEL™ plants can be put in independent of the sawmill, remanufacturing and CLT plants.

Table 14 – capital weighted RA ROCE for smaller scale wood processing cluster suitable for separating the wood processing to two sites Process Capital Cost RA ROCE% Capital weighted (millions) RA ROCE Sawmill 20.0 10.5 - CLT 42.6 22.2 - Remanufacturing 18.0 25.8 - Total 80.6 20.1

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The residues from this cluster are shown in Table 15.

Table 15 – residues available from the cluster in table 14, with the OEL plant added on Process Feedstock Volume Product Chip Residues Residues Residues in m3 out m3 m3 le Produced used for fuel GJ GJ GJ Sawmill S & A logs 140,000 80,000 35,000 173,000 168,000 5,000 CLT Lumber 35,000 30,000 - 34,000 16,000 18,000 Reman. Lumber 30,000 23,000 - 48,000 12,000 36,000 OEL™ K logs 100,000 57,000 - 267,000 133,000 134,000 Total 240,000 147,000 42,000 522,000 329,000 193,000 (Logs)

Clutha opportunities to co-locate wood processing with heat demand centred on Balclutha

Figure 15 shows the location of the following boiler sites; 1 coal, 8.5MW = 228,000 GJ or 33,000 green tonnes wood (Silver Fern Farms, Finegand) 1 LPG, 13MW = 232,000 GJ or 34,000 green tonnes of wood (Danone, Clydevale) 1 lignite, 11MW = 200,000 GJ or 29,000 green tonnes of wood (Fonterra Stirling)

Figure 15 - Location of large fossil burning heat demands near Balclutha.

The residues available from the cluster described in Table 13 would be sufficient to fuel either the Finegand meat works or the Stirling Dairy factory. However, given the costs of fuels perhaps the greater opportunity is the dairy factory at Clydevale which runs on LPG. This plant would take all the wood processing residues from the cluster outlined in Table 13, and could make up the shortfall from either (or both) of the chip from the sawmill or forest residues. There is sufficient landing residue supply in Clutha to meet this shortfall.

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The smaller scale cluster described in Table 14 could provide; around half the heat demand of the Clydevale site, or, nearly all the fuel for the Stirling dairy factory or most of the fuel for the Finegand meat works. The shortfall could be made up from the in-forest residues from forests in Clutha.

All of these sites are rurally located with land area around that that could be used for industrial processing.

Southland opportunities to co-locate with heat demand centred on Lorneville / Makarewa (north of Invercargill, near Wallacetown)

Figure 16 shows the location of the following boiler sites; Coal boilers at meat works; Lorneville (2 coal boilers 18 &13 MW), 227,000 GJ and 314,000GJ or 38,000 and 53,000 tonnes of wood, total of 93,000 of wood fuel Makarewa (2 x 6.1 MW = coal), 2 x 157,000 GJ or 2 x 23,000 tonnes of wood West Plains (4 and 4.7 MW = coal) 89,000 and 14,000 GJ, or 13,000 and 20,000 tonnes of wood.

Figure 16 – location of coal fired boilers at three meat works sites near Invercargill

The wood processing residues available from the cluster in Table 15 (193,000 GJ) are almost sufficient for one of the coal boilers at Lorneville, or all of one of the boilers at Makarewa or all of the fuel demand at the West Plains site. In the case of the large site at Lorneville the short fall could be made up from in-forest residues, as Southland has a supply of landing residues equivalent to around 270,000 GJ.

All of these sites are rurally located with land area around that that could be used for industrial processing.

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Southland opportunity to co-locate wood processing with heat demand – centred on Mataura

Figure 17 shows the location of heat demand in and near Mataura.

Table 16 – heat demand from coal in / near Mataura No. Boilers Total MW GJ p. a. Green tonnes of wood p. a. Mataura 3 14.2 356,000 52,000 Waitane 2 3.1 22,500 3,350

Figure 17 – location of 2 boiler sites at meat works near Mataura

The wood processing cluster outlined in Table 15 could easily supply the required fuel to the sites at Mataura. However, the demand at Waitane is small and co-locating with the meat works at Mataura would face some challenges due to the location of the works immediately next to the Mataura river on one side, the State highway on the other and being right on the edge of the township.

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Discussion

For bioenergy from forestry derived woody biomass to gain market share it needs to overcome several barriers; - Price; coal and lignite are very cheap in Southland and Clutha - Technology lock-in; boilers tend to have long service lives (30 years +) - Uncertainty about long term supply of wood

The data presented here and in Millar 2015 and Millar et al 2015 should go some way towards showing that there is substantial wood supply available long term. In the first instance there is the supply from harvesting residues from the existing forest estate.

Carbon pricing and government policy associated with this may help overcome the pricing issue in the medium term (3 to 6 years).

The Southland / Clutha wood supply is more diverse in its species composition than most regions in New Zealand and this creates some complexity, but also contributes to the long term wood supply opportunity.

There is a long term wood supply sufficient to support expanded wood processing. This resource will principally be Douglas fir.

The scale of this resource is estimated to be sufficient to supply a medium sized structural sawmill, with much of the mills product going into secondary processing to make cross laminated timber and other re-manufactured wood products. There are opportunities to do this aligned with existing heat demand either separately with sites in Southland (Lorneville / Makarewa) or near Balclutha.

Further, there is the potential for a larger wood processing site, based on the combined wood resource of Southland and Clutha. There are a number of heat demand sites at Balclutha, and there is sufficient wood resource and in-forest residues to substitute for the LPG or coal demand at a range of sites near Balclutha.

The employment and GDP impacts vary with the decision to have one larger site or two smaller sites. The larger site is the most profitable, and has to 360 direct jobs, with GDP impact of $270 million. Two smaller sites, whilst less profitable collectively have greater employment at 584 direct jobs and greater GDP impact at $688 million.

Estimate of economic impacts The impacts of the expanded wood processing options on employment and GPD are shown in Table 17.

Table 17 – economic impacts, 1 large wood processing cluster Employment Capex, $M ROCE % Direct + Indirect GDP, $M 1 large cluster $140 26 360 936 $270 2 small clusters $160 20 584 1518 $688

Of the scenarios presented here the better option for an wood energy industrial symbiosis development would appear to be the larger wood processing cluster in Clutha, based at either Clydevale (dairy factory / substituting for LPG) or at Stirling (dairy factory substituting for coal). The larger cluster has a higher RA ROCE. Of the dairy factory sites two, the LPG fuelled plant would be the one where the greatest cost saving in fuel would be obtained. The cost of LPG is likely to be at least $26 per GJ, whereas the wood fuel should be $10 to $12 per GJ. Given the cost difference the fuel saving could be in the order of $5.4 million per annum, along with a reduction in GHG emissions of around 25,000 tonnes of CO2e.

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Conclusions

There is sufficient wood resource available in Southland and Clutha to support expanded wood processing in the long term.

There are potentially profitable wood processing options that fit with this resource; sawmilling combined with engineered wood products (CLT) and remanufacturing, OEL™ and big squares.

The residues available from the proposed wood processing cluster could meet some of the coal or LPG demand in Southland or Clutha.

Capital investment of $80 to $140M would be required, with a RA ROCE of 20 to 26%.

Impacts on employment and GDP are substantial, but vary with the scale of the wood processing installed.

There are substantial numbers of jobs that could be generated from these wood processing developments, along with the associated GDP gains. These gains depend on the decision to have one larger site or two smaller sites.

There are a range of location options in Southland and Clutha where expansion of wood processing could be collocated with dairy or meat processing with the wood residues that are not required by the wood processing operations making a useful contribution to the heat demand currently generated from fossil fuels.

A large wood processing cluster located near Balclutha would have a capital weighted RA ROCE of 26% and would create 1296 jobs (direct and indirect, with an increase in GDP of $270 million per annum.

This site could displace coal or gas fired heat demand and reduce GHG emissions by up to 22,000 tonnes per annum.

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Glossary

Big Squares = large dimension lumber, sawn from logs, with the intention of further sawing at a later stage

CLT = cross laminate timber, an engineered wood product from making structural elements in buildings OSB = oriented strand board, a reconstituted panel product made from flaked pulp logs OEL = Optimised engineered lumber, structural lumber product made from defect free lengths of wood sawn from K grade logs and finger jointed / laminated TMP = Thermo-mechanical pulp GJ = GigaJoule GDP = gross domestic product GHG = green house gas

Acknowledgements

Scion wishes to acknowledge the contribution of the following to this project;

Energy Efficiency Conservation Authority for granting access to the heat plant database heat plant database

Ministry of Primary Industries data; National Exotic Forest description and the Wood availability forecasts, as well as other data on wood product production and exports.

Samantha Alcaraz, GNS and Malachy Carey at Eagle / ESRI; for assistance with mapping.

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References

EECA Heat plant database (2014). Database updated by CRL Energy Ltd on Behalf of the Energy Efficiency and Conservation Authority https://www.bioenergy.org.nz/documents/resource/heat-plant-database-report-august-2011.pdf

Hock B. K., Blomqvist L., Hall P., Jack M., Moller B. and Wakelin S. J. (2012). Understanding forest derived biomass supply with GIS modelling. Journal of Spatial Science, 57:2, 213-232.

Hall P (2017). Residual biomass fuel projections for New Zealand – indicative availability by region and source. Scion contract report for the Bioenergy Association (of New Zealanfd0. Sidney No. 59041.

Hall, P Alcaraz S and Hock B. K. (2017). Assessment of wood processing options for Gisborne – Wood energy industrial symbiosis project; Aim 3 resource convergence opportunities. Scion Report to MBIE. Sidney No. 58704.

Hall P., Alcaraz S, Carey B. and Hock B. K. (2017). Assessment of wood processing options at Ngawha – incorporating geothermal heat; Wood Energy Industrial Symbiosis Project. Scion Report to MBIE. Sidney No. 58703.

Hall P. (2017). Scion Wood processing database – 2017 update.

Hall P (2017). WoodScape model – 2017 update.

Hall P., Hock B., Alcaraz S., Climo M. and Heaphy M. (2016). Wood Energy Industrial Symbiosis 2016 Progress Report – Aim 3; Energy resource and heat demand mapping. Scion Report to MBIE. Sidney No. 57986.

Hall P. (2013). Analysis of wood processing opportunities in Kawerau using the WoodScape model. Scion contract report for Kawerau District Council. Sidney No. 51627. http://embracechange.co.nz/media/downloadable-pdfs

Hall P (1998). Logging residue at landings. New Zealand Forestry. May 1998

Jack M., Hall P., Goodison A., Barry L. (2013). WoodScape study summary report. Scion contract report for the Wood Council of New Zealand (Woodco). http://woodco.org.nz/images/stories/pdfs/woodscape/woodscapesummaryreportfinal1_web.pdf

Millar R. (2015), South Otago Wood residue supply assessment. Contact report by Ahika Consulting for Wood Energy South & Venture Southland.

Millar R., Keen N., McDonald I., & Lee D. (2015). Southland wood residue supply assessment. A report prepared for Wood Energy South, Venture Southland and The Energy Efficiency and Conservation Authority.

Ministry of Primary Industries (2016). A national exotic forest description as at 1 April 2015. https://www.mpi.govt.nz/news-and-resources/open-data-and-forecasting/forestry/new-zealands- forests/

Ministry of Primary Industries (2014). Wood availability forecasts – Otago Southland 2014. Prepared for the ministry of Primary Industries by Indufor Asia Pacific Limited. https://www.mpi.govt.nz/news-and-resources/open-data-and-forecasting/forestry/new-zealands- forests/

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Appendix A - Wood processing plants - Southland

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Appendix B - Wood processing plants - Clutha District

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Appendix C – Eucalyptus plantation area Southland & Clutha

Data source – Ministry of Primary Industries, National exotic forest description, 2016.

Eucalyptus plantation area (hectares) by 5 year period

Appendix D - Residue production and energy demand by processing type

Process Heat Sawdust Bark Offcuts Residue Energy % of % of Shavings energy demand; infeed infeed etc., generated; GJ/m3 of % of GJ/m3 of product infeed product Sawmill 2.1 12 4 11 3.4 MDF 3.5 3 4 9 1.84 LVL 12.7 3 4 41 1.56 Plywood 12.7 3 4 41 5.72 OEL 3.1 16 4 12 5.72 Particle board 2.4 3 4 9 3.64 Kraft pulp 10.0 0 4 2 1.56 OSB 2.4 0 4 17 0.26 CLT 0.54 2 0 15 2.21 Reman. 0.54 0 0 15 2.55

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Appendix E – NZ energy costs; 2017

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