Plantation timber is gaining traction as a solution to end Australia’s war on public native forestry. The forestry industry is calling it ‘magic wood,’ but creating enough to replace native timber will require a magic wand.
The main advantage of plantations over native forests is that they grow wood more quickly and produce a uniform and consistent product in a much smaller place. Being concentrated in one location also makes them less costly to harvest and process.
A Government prohibition on native forest harvesting is seen as a real and present risk in all States where native forestry is allowed. In ranking, the highest risk is NSW, followed by Queensland and Tasmania. The Left wing of the ALP holds sway in NSW, Queensland, and Tasmania, and they are in close competition with the Greens on environmental issues. Tasmania has a Liberal Government, but there is instability around native forestry, which is always a big election issue.
The NSW hardwood timber industry supports plantation timber forests, but where they operate, native eucalypt forests dominate the landscape, and suitable clear land is limited and heavily contested. Commercial hardwood species require well-drained fertile soils with good rainfall (more than 1200mm per year). Cleared land that fits this requirement is very expensive—more than $10,000 per hectare.
Incentivising landholders to invest in native hardwood timber plantations is challenging due to high upfront establishment costs, regulatory approvals and a growing time of more than 40 years – if you want to produce solid timber products.
Most income from timber doesn’t come until the final harvest.
To yield high-quality logs, the plantations need to be loaded and thinned before they reach mid-rotation age. Income can also be generated from carbon credits, but participation in an accredited scheme remains complex and expensive. Compare this to cattle grazing or dairying, where there is regular cash flow and no regulatory complexity.
The requirements of hardwood plantations are very different from those of pine plantations, where a ‘one size fits all’ is often possible. Different native hardwood species grow productively in different locations, reflecting climate, topography, aspect and soil types. Growing a hardwood species outside of its natural range risks plantation failure.
To ensure your plantation can be harvested, you must comply with a Code of Practice under the NSW Plantations and Reafforestation Act 1999. The way this Code is administered has recently changed. ENGOs have pressured the government to pay greater attention to each plantation’s ‘unique and special wildlife values’ before any operations occur.
This results in harvesting stop-work orders being issued while the government completes its wildlife assessments. The delays and associated red tape deter would-be investors and those contemplating replanting existing plantations that have reached the final harvest age.
Hardwood plantation performance has been less than stellar.
Recently published research commissioned by the North East NSW Regional Forestry Hub found the performance of existing hardwood plantations on the NSW North Coast has been disappointing in terms of their health, growth and timber quality. The study by Southern Cross University found that most hardwood plantations are commercially unviable, with average growth rates that are less than half of what was originally predicted.
A review of the performance of hardwood plantations in Queensland came to a similar conclusion. The performance has been challenged by a lack of tree breeding and genetic improvement and their inherent susceptibility to local pests and diseases. Mass planting of native hardwood tree species increases the risk of disease and native predators, causing major damage to the growing stock.
One way to tackle this issue is to select and breed resistant tree species. Some private sector enterprises are trying to improve hardwood species’ resilience, but the real gains have historically been achieved by applying government resources in a specialised tree breeding venture.
The government has been missing in action for more than 20 years.
There is no indication that the public sector is undertaking this work; in fact, there has been no government-sponsored or government-funded work improving hardwood species for over 20 years. Despite this, the bureaucracy in NSW and Canberra is advocating hardwood plantations as a solution for timber supply where native forestry is shut down.
The exotic softwood plantation sector faced similar biophysical challenges when it was established in the 1900s. Biosecurity and tree breeding were effectively used to mitigate its risks. For native hardwood plantations, however, the pests and diseases are endemic, so biosecurity is not a solution to local pest and disease outbreaks.
Plantations’ attributes make them well suited for use as commodity products like paper, reconstituted and engineered wood, and bioproducts. However, if their purpose is to replace native forest timber supply, they must produce high-quality sawlogs and poles.
The proportion of high-quality logs produced by hardwood plantations is currently low, and they also take a long time to produce them. Faster-growing hardwood species can produce logs within an acceptable timeframe, but their timber tends to be less stable, prone to warping and splitting during the milling process, and cell collapse when dried. The timber of faster-grown hardwoods also has lower durability. Together, these things make them unfit for purpose. Slower-grown, durable eucalypt species are the only alternative.
For plantation hardwoods to be viable, new markets must be developed for low-quality timber (pulpwood thinnings). The performance of existing hardwood plantations has suffered because of the absence of these markets, with many remaining unthinned.
Resistance to market development for low-quality timber has been strong from ENGOs and some sectors within the NSW Bureaucracy – namely the NSW Department of Climate Change, Energy, the Environment and Water (DCCEEW) and the Environmental Protection Authority (EPA) – because there is concern that the same markets will support the economics of native forestry.
Consequently, markets for bioproducts successfully developed overseas, particularly in Europe, remain missing in Australia.
Economic drivers have caused the area of timber plantations to decrease Australia-wide.
The Australian Forest Contractors Association (AFCA) have identified the challenges that must be resolved to alter this trend. These challenges include breeding tree species and varieties better suited to plantation conditions, securing sufficient land for new plantations to occupy and an economic, business and risk model that could manage the long period between plantings and harvest.’
Similarly, the North East NSW Regional Forestry Hub has summarised the things that are needed to improve the growth and financial performance of long rotational hardwood plantations:
- Investment in tree breeding
- Development of markets for thinnings
- Focusing any new investment in higher rainfall zones
- Careful matching of species to sites
- Economies of scale – having a sizeable recurring establishment program to reduce establishment costs
- Inclusion of carbon sequestration benefits, and
- Financial recognition of other environmental services
To put the challenges in perspective, the tables below detail the size and cost of a hardwood plantation program needed to replace hardwood timber supply from the following public native forestry areas:
- The NSW Government’s proposed Great Koala National Park at Coffs Harbour
- The North East NSW Regional Forest Agreement Region
- The entire State of NSW
Size of a hardwood plantation program to replace public native forestry
| ha/yr | ha 40 yrs | |
| Proposed Great Koala National Park Assessment Area | 637 | 25,493 |
| North East NSW | 2,124 | 84,976 |
| All NSW native State forests | 3,470 | 138,800 |
| Cost of a hardwood plantation program to replace public native forestry | ||
| $/yr | $s over 40yrs | |
| Proposed Great Koala National Park Assessment Area | 12,746,400 | 509,856,000 |
| North East NSW | 42,488,000 | 1,699,520,000 |
| All NSW native State forests | 69,400,000 | 2,776,000,000 |
These figures are currently under review and appear to be conservative.
Other issues that impact hardwood plantations include:
- General disengagement of private landholders with forestry due to a long history of government dominating the space, sometimes identified as ‘sovereign risk’. A real issue here in NSW is the concern of the NSW Environmental Protection Agency getting into this space and privately owned lands. The EPA in the last few years has attempted to force landowners to interact with them even if they were not actively engaged in forestry as such. The action simply heightened the concern.
- The fallout of the Managed Investment Scheme (MIS) tax schemes – graziers are still bitter about MIS forestry operations using tax breaks to buy up land for plantations. The MIS tax schemes were poorly developed by the Australian Taxation Office through its Rulings regime. The Ruling looked at the schemes as a tax issue and not an agricultural issue and what was needed to ensure the commodity involved achieved a productive commodity end result. As a result, the schemes were tax breaks for a few years with substantial loss for investors and no successful commodity outcome.
- General distrust and scepticism around government-funded programs.
To conclude, hardwood plantations are not currently working but they could be with a large shift in public policy and a very large injection of Government funds. The tables above reveal that the cost of establishing the right trees in the right locations is a massive task that will take over forty years to realise if a program starts tomorrow. Under such a program, the first small sawlogs will be available to harvest in 2050!
