The Green Fuel Switch: NZ Trees Opens New Chemical Market

Australian listed company Foresta has gone public about its move to build a torrefied black wood pellet plant at Kawerau, alongside a plant to extract high value chemicals from pine timber.

Wed 10 Apr 24


Australian chemical company Foresta will build a new torrefied black wood pellet plant in Kawerau, New Zealand’s Bay of Plenty and will also extract high-value chemicals from pine timber on site. 

The new plant, slated to go live in 2026, is part of Foresta’s broader push to produce wood pellets and chemicals from pine timber, with eight additional sites across New Zealand now under review.

It comes as Wood Central reported last week that OneFortyOne is investing NZ $1 million in a new biomass plant to convert forest slash into green energy.

According to Foresta’s Managing director, Ray Mountfort, the new plant will produce 65,000 tonnes of pellets yearly as part of a deal to supply Tailored Energy & Resources in New Zealand’s South Island. 

As reported by NZ-based Farmers Weekly, black or torrefied wood pellets are heated to 200-300 degrees Celsius without oxygen and have proven to be a successful “drop-in” fuel to replace coal, with recent success proven in a trial at Genesis Energy’s Huntly power plant.

“While Fonterra and Genesis are large coal users, they are still only a quarter of the market, so there is plenty of opportunity beyond them,” according to Mr Mountfort, who said the plant construction and commissioning is now subject to resource consent by the NZ government. 

The latest development closes the arc on a tricky 14 years for Mr Mountfort, who, in 2011, created the new technology, turning forest waste into turpentines, rosins (resin chemicals), and ink compounds. However, a boardroom shakedown after US company American Pine and Rosin Derivatives bought into the company led to his exit.

The company then went into liquidation, and Mr Mountford took his work on timber chemicals to Queensland, Australia. He later bought into the Foresta and moved the operation to New Zealand, completing the arc.

Wood Central understands that Foresta has now signed a 30-year lease agreement on a 9.6-hectare site at Kawerau with the local Putauaki Trust. The pellet plant will be imported from Europe while the chemical extraction plant is under construction. 

Speaking to Farmers Weekly, Mr Mountford acknowledges the rough path: “There have been some lessons along the way, and we have picked good partners and have a good board.”  

He said the initial production would require 200,000 tonnes of logs or about 330 hectares of forestry yearly, with Foresta to avoid materials from forestry waste or slash.

“It is something we would rather stay away from; it’s someone else’s mess,” he said, adding that NZ farmers could be a valuable market source for timber, particularly “old man pine” that is dense in resin chemicals.

He maintains that Foresta can extract 10-20% more timber of a block for wood lot owners, given its use of resin-dense stumps and tops for chemical production.

“From the site in Kawerau, we have identified 2000 pine forest owners within 100km.” While not initially competing with NZ’s raw log trade, Mr Mountfort told Farmers Weekly that as processing volumes ramp up, that becomes inevitable.

“For that reason, we have priced our supply cost on the average of all grades of log values for the past five years. New Zealand exports about 22 million tonnes at an average value of $111/tonne.”

He said most pellet operators must put raw material prices near $50/tonne. 

Still, the ability to draw off and process high-value chemicals and resins means Foresta can tolerate a higher cost threshold while helping absorb a low-value, volatile export product by turning it into higher-value outputs.

Brian Cox, chair of the Bioenergy Association of NZ, welcomed the arrival of a company capable of “closing the loop” and processing lower-grade pine into a higher-value product. Adding that “this is exactly the type of project we need.”


  • Wood Central

    Wood Central is Australia’s first and only dedicated platform covering wood-based media across all digital platforms. Our vision is to develop an integrated platform for media, events, education, and products that connect, inform, and inspire the people and organisations who work in and promote forestry, timber, and fibre.


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