Forest Products Industry

Forest & Wood Communities Australia says the Federal Government’s new Improved Forest Management in Multiple-use Public Native Forest methodology contains serious carbon-integrity and economic flaws, and risks rewarding governments for shutting down sustainable regional industries. Source: Timberbiz Forest & Wood Communities Australia has warned that the new Improved Forest Management in Multiple-use Public Native Forests carbon methodology risks issuing Australian Carbon Credit Units for abatement that may not exist in the atmosphere, while undermining one of regional NSW’s most important renewable manufacturing supply chains. FWCA Chair and Director Steve Dobbyns said the methodology is being presented as a climate and economic opportunity, but in practice it could reward governments for closing sustainable public native forest industries while pushing timber production, jobs, emissions and biodiversity impacts somewhere else. “This is not climate action if it simply shifts timber production offshore or into other supply chains with higher environmental risks,” Mr Dobbyns said. “The atmosphere does not care whether emissions are moved across a state border, into private forests, into imported timber, or into substitute materials like steel, concrete and plastics. If the wood is still needed, the carbon impact has to be counted honestly.” The INFM method recognises leakage risk and includes deductions for harvesting in excluded areas, increased harvesting in other public native forests, increased harvesting in private native forests, and broader indirect leakage. However, the most important category – indirect leakage, which is intended to account for emissions and removals outside the project area – is capped at 40%. Mr Dobbyns said that cap is the central problem. “Recent work by Venn et al. found that reduced domestic native forest harvesting has been a structural driver of Australia’s growing import dependency, with a long-run timber harvest leakage rate of 81.3%,” he said. “In plain English, for every 1,000 cubic metres of native forest timber production removed from Australia, the modelling indicates Australia imports approximately 813 cubic metres of solid wood products from overseas in the long run. “That is not a minor leakage effect. That is most of the timber being replaced through imports.” The Venn et al. analysis also found that native forest hardwood and plantation softwood are complementary goods in the Australian market, not simple substitutes. That means closing native forest supply is not automatically offset by plantation pine. Instead, reduced native forest harvesting has materially increased Australia’s dependence on imported solid wood products. FWCA said the finding directly challenges the credibility of the INFM methodology. “A carbon method that caps indirect leakage at 40% cannot credibly account for evidence showing timber harvest leakage of 81.3%,” Mr Dobbyns said. “If a state government removes 1,000 cubic metres of native forest timber supply and Australia then imports 813 cubic metres to replace it, the atmosphere does not see that as a 100% climate gain. The forest and emissions impacts have simply been pushed into other jurisdictions. “And if those imports come from countries with weaker forest governance, higher illegality risk, longer transport chains or higher embodied emissions, the climate and biodiversity outcomes may be worse — not better.” Using a simple carbon-crediting example, if a project claims 100 tonnes of gross abatement and actual leakage is 81.3%, the real net climate benefit may be only 18.7 tonnes. But if the methodology caps the indirect leakage deduction at 40%, the project may still be credited as if 60 tonnes of abatement remains. “That is not conservative accounting,” Mr Dobbyns said. “That is capped accounting. It creates a built-in over-crediting risk.” FWCA said there is another serious consequence that has received little public attention: the INFM method does not simply stop harvesting inside a proposed carbon protection area. Through its leakage rules, it creates a financial penalty if harvesting increases elsewhere. “The INFM method does not directly ban harvesting on neighbouring land, but it effectively puts a carbon-credit penalty on increased harvesting elsewhere in the State,” Mr Dobbyns said. “That means governments chasing ACCUs have a financial incentive to constrain timber supply not only inside the proposed park, but across private native forests as well. “This should concern every private native forest owner, contractor, sawmiller, processor and regional community that depends on hardwood timber supply. “Once governments start relying on carbon credits from stopping harvesting, any increase in timber production elsewhere can become a threat to those credits. That creates pressure to suppress supply across the wider landscape, even where harvesting remains lawful, sustainable and properly regulated.” FWCA said the economics of the proposal are just as troubling. Supporters of the Great Koala National Park carbon-credit proposal have claimed it could generate $300 million over 15 years. That sounds large until it is compared with the existing timber economy the policy threatens to displace. “That $300 million over 15 years is only about $20 million per year,” Mr Dobbyns said. “By contrast, the North East NSW hardwood timber industry currently contributes around $700 million in gross value add every year, generates around $1.84 billion in gross revenue, and supports approximately 5,700 full-time equivalent jobs. “Over the same 15-year period, that is about $10.5 billion in gross value add from the existing hardwood industry in North East NSW alone.” Mr Dobbyns said the 15-year comparison understates the issue, because the INFM method creates a 100-year permanence obligation. “If governments want to lock up productive forests for 100 years, then the economic comparison must also be made over 100 years,” he said. “On current figures, the existing North East NSW hardwood industry represents around $70 billion in gross value add, $184 billion in gross revenue, and the equivalent of 570,000 full-time job-years over a century. “That is the real economy at risk. “So, the public is being asked to accept the destruction of a real, renewable, regionally based industry worth hundreds of millions of dollars every year, in exchange for speculative carbon-credit income that is a fraction of the economic value already being generated.” Mr Dobbyns said the comparison exposed a major flaw in the way the INFM debate is being presented. 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