Government Supporting More Onshore Wood Processing – New Zealand Government

Unlocking the potential of the wood processing sector, growing our economy and contributing to New Zealand’s climate change response is the aim of a new fund announced by Forestry Minister Peeni Henare today.

Speaking at the Wood Processers and Manufacturers Association conference in Rotorua, Peeni Henare said the new $57 million fund would enable the Government to partner with wood processors to co-invest in wood processing capacity to create products like sawn structural timber and engineered wood.

“We want to process more logs onshore, help move our forestry sector from volume to value, lift our economic performance and resilience and create high-wage jobs in our regions,” Peeni Henare said.

In 2021 wood product manufacturing plus pulp and paper contributed around $3.8 billion to New Zealand’s GDP and wood processing manufacturing alone makes up around 40% of this figure. It is estimated that this funding support will see $500 to $650 million of additional GDP over the life of the fund’s investments.

The fund will support:

• greater domestic processing of wood to help meet our climate change goals as wood products store carbon and delay CO2 being released back to the atmosphere
• increased onshore processing that produces sawmilling residues which are a feedstock for low-carbon biofuels and bioproducts
• a boost in producing high-value wood products in New Zealand that will help us achieve our climate change goals.

“The forestry and wood processing sector is central to many of our regional economies and it is past time we capitalised on the opportunities available,” Peeni Henare said.

“Over the last two decades, New Zealand’s overall wood processing capacity has remained relatively stable while log volumes available to be processed have doubled.

“Investment in wood processing infrastructure has declined and we are missing out on the potential benefits that processing wood here in New Zealand offers. This fund will support feasibility projects through a ‘catalyst fund’ and provide capital support through an ‘accelerator fund’ to turn this around.

“By producing more high value products onshore, the sector can support New Zealand’s goals and commitments to decarbonise the economy.

“Wood processing produces residues that can be turned into a range of biofuels to support decarbonisation which contributes to reducing emissions.

“These investments will deliver better outcomes for workers, whāanau, communities and regions to support a more productive and sustainable economy. Current projections will see hundreds of jobs generated from the additional capacity created by the fund,” Peeni Henare said.

This fund will also help achieve the objectives of the Forestry and Wood Processing Industry Transformation Plan and support the Government’s Economic Plan to build a high-value, high-wage, low-emissions economy.