PGP funding for forestry biofuel programme

  • Nathan Guy
  • Steven Joyce
Primary Industries Science and Innovation

Science and Innovation Minister Steven Joyce and Primary Industries Minister Nathan Guy today welcomed the announcement of Primary Growth Partnership funding of $6.75 million to investigate producing biofuels from forestry waste.

The ‘Stump to Pump’ Primary Growth Partnership (PGP) programme partners are Norske Skog, Z Energy and the Government. The Government will match their funding of $6.75 million to bring the project’s total funding to $13.5 million.

“This is an exciting announcement as this partnership between the Government and industry has the potential to make an important economic and environmental contribution to New Zealand,” Mr Joyce says.

"If the technology can be proven and commercialised, the economic benefit for New Zealand over the next 20–25 years is estimated at an annual increase in GDP of up to $1 billion and the creation of 1,200 direct jobs in regional economies.”

“The Stump to Pump programme has obvious sustainability and environmental benefits. Local production of biofuels from forestry waste could be a game-changer for New Zealand and could also reduce the industry’s dependency on imported fuel,” Mr Guy says.

“Since the PGP was launched three years ago, 16 exciting innovative projects are underway. While the programmes are long-term initiatives, progress is evident, including:

  • a new tree harvesting machine that can fell and bunch logs on steep slopes and remove the need for chainsaw operator, resulting in a 26% increase in productivity, now being in commercial use.
  • 2000 farms are implementing the Dairy Value Chain programme’s Whole Farm Assessment approach, resulting in an estimated economic benefit of $50,000 per farm per year.
  • In the 2011–12 production season, farms in the Farm IQ programme recorded an average decrease in production costs of 12%, with an average increase in production of 10% leading to a gross farm income increase of $214 per hectare.
  • grass-fed wagyu processed as part of the Marbled Grass-fed Beef programme returned and extra $1 per kg, above the schedule price for Prime Steer.

“These investments in productivity will play a big part in achieving the Government’s goal of doubling primary exports by 2025,” says Mr Guy. 

“Science and innovation are key drivers of international competitiveness, job creation and economic growth – particularly for our regional economies,” Mr Joyce says.

“This investment will provide a significant boost for both Kawerau and the Eastern Bay of Plenty and is an opportunity to develop its natural resources and assets, allowing for job creation and growth."

Robust governance, monitoring and assurance processes are in place to ensure that public funding is used appropriately to help drive commercial innovation and productivity in the primary sectors. 

Background information

More information on PGP programmes
PGP’s governance, monitoring and assurance systems

Q: What work will be undertaken in this project?

A: Over the next 14 months, Stump to Pump will investigate the possibility and commercial viability of converting forestry waste; including sawdust, bark and harvest residue; into liquid biofuels. If this waste material could be used commercially, it would maximise the value of every harvested tree and create additional benefits to New Zealand’s primary sector and economy.

Q: What are biofuels?

A: Biofuels are liquid or gaseous fuels produced from biomass. They are commonly a substitute or additive to petrol and diesel.

Q:  How will Government get a return on its investment in Stump to Pump?

A:  Through the creation of a new value chain for the forestry sector and spill-over economic and environmental benefits for New Zealand. If the technology can by proven and made commercial, then the economic benefit for New Zealand over the next 20-25 years is estimated at an annual increase in GDP of $1 billion and the creation of 1,200 direct jobs. There are also obvious sustainability and environmental benefits that would support the 100% Pure New Zealand brand.

Q: What will happen at the end of this project (the feasibility study)?

A:  At the end of this project, the co-investors aim to be in a position where they can determine the commercial viability of establishing a modular test plant to process New Zealand forest waste. The Primary Growth Partnership has committed funding to this project only.