A study conducted by researchers from CSIRO and the Department of Agriculture and Food (DAFWA) suggests industrial plantation forestry could potentially contribute towards Australia’s national target of reducing greenhouse gas emissions (GHG) if a carbon price is in place. Source: Science WA
The study found the expansion of new plantation estates into cleared agricultural land is not economically viable without a carbon price, largely due to the high costs of purchasing land.
Study co-author and principle scientist at DAFWA, Dr Peter Ritson said that in order to stimulate the wood product forest planting there must be a carbon credit benefit in place.
“An Australian forestry company that establishes a plantation forest may not get an adequate return on investment without the carbon price because there isn’t enough profit that it can acquire from wood products,” said Ritson.
One of the benefits of having a carbon price is that it increases forest growth and encourages commercial forestry companies to establish forests. Unless new plantations are established then timber for construction and commercial use will have to be increasingly imported.
“Another alternative will be to use other building products such as steel, aluminum and concrete. But these products have a higher carbon footprint as compared to timber,” he said.
One of the risks to the forestry industry has to do with the Carbon Farming Initiative, which was recently introduced by the Federal Government.
“The CFI enables forest growers who decide to put their forest into the Carbon Farming Initiative to obtain carbon credits for storing carbon on that landscape. However, they are required to maintain the carbon store for over 100 years.”
“Under the CFI, forest growers can opt out of the scheme anytime but will be requested to relinquish the credits that they were paid in the first place.
Dr Ritson said that if they had already sold these credits to companies, they may be faced with the prospects of having to buy them back in. He warns that if the carbon price escalates, this could potentially become a very expensive exercise for forest growers.
Dr Ritson believes the expansion of new plantations will help Australia reduce GHG emissions by 5% by 2025.
