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Tuesday, 22 June 2010
Page: 3875

Senator MILNE (1:37 PM) —Yes, that would facilitate the debate considerably. I would like to move on and visit that item a little later in the debate, if we may. I seek leave to move Australian Greens amendments (4), (9) and (1) on sheet 6114 together.

Leave granted.

Senator MILNE —I move:

(1)    Clause 3, page 2 (lines 7 to 11), omit the clause, substitute:

         (1)    Each Act, and each set of regulations, that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

         (2)    The amendment of any regulation under subsection (1) does not prevent the regulation, as so amended, from being amended or repealed by the Governor-General.

(4)    Schedule 1, page 61 (after line 22), after item 110, insert:

110A  At the end of subsection 17(2)


            ; (c)    biomass from native vegetation of any kind.

(9)    Schedule 1, Part 2, page 80 (after line 4), at the end of the Part, add:

Renewable Energy (Electricity) Regulations 2001

137  Paragraph 8(1)(d)

Omit “; and”, substitute “.”.

138  Paragraph 8(1)(e)

Repeal the paragraph.

139  Subregulations 8(2), (3) and (4)

Repeal the subregulations.

140  Subregulation 9(2)

Repeal the subregulation, substitute:

         (2)    For section 17 of the Act, biomass from native vegetation is not an energy crop.

141  Subregulation 20AA(1)

Omit “subsections 23B (2) and”, substitute “subsection”.

These amendments deal with the issue of biomass from native forest vegetation. The Australian Greens are moving to ensure that biomass from native forest vegetation will no longer be an eligible renewable energy source. This is an absolutely critical issue in the climate change debate, the biodiversity debate and the forest industry future debate, so it has garnered the interest of people around the country.

As a matter of context, I will just indicate that over the last decade the market for native forest woodchips has collapsed totally around the world, such that the native forest logging industry is in complete disarray. It has collapsed in Tasmania; it is on the verge of collapse in Victoria. There is no market for the export of native forest woodchips. This is for two reasons. One is because a wall of plantation timber has come on stream from all around the world and is outcompeting native forests into the Japanese pulp and paper market because plantation woodchips are of a higher, more even quality for the purposes of pulping. Also, because they are younger timber, they require less chlorine in the bleaching process, and you can get to a chlorine-free bleaching process if you use plantation timbers. The upshot is that the market for native forest woodchips has collapsed.

The second reason that the Japanese are not buying Australian native forest woodchips is that they recognise that they have to achieve Forest Stewardship Council certification and they are not going to get it for logging primary forests. There is a global focus now on protecting the world’s forests and on protecting biodiversity. We are this year in the United Nations International Year of Biodiversity. Next year is the United Nations International Year of the Forests, and the year after that is Rio plus 20. We are in a global negotiation currently on reducing emissions from deforestation and degradation.

There is a fantastic opportunity in Australia right now with the collapse of the native forest industry to move the industry into downstreaming the existing plantation estate. The benefit of ending native forest logging is not only because of its biodiversity and carbon benefits but also because every time a government subsidises the logging of native forests it reduces the price that you can get from downstreaming plantation timber, so it is not in the interests of the plantation industry to have governments continuing to subsidise native forest logging. What is the point of subsidising native forest logging, dropping the price and undermining the price of plantations at exactly the same time as you are providing managed investment scheme tax benefits for the planting of those plantations?

Now we have a scenario where the industry has turned up at the parliament saying: ‘Give us another handout. We want the renewable energy target to include burning biomass.’ This is the rescue package for the native forest logging industry. They do not have an industry at the moment. It has collapsed. So what they are trying to do is say, ‘Let us cut down native forests, burn them in furnaces, generate renewable energy certificates and sell them as green energy.’ They are not green energy. They are known colloquially in the market as ‘dead koala certificates’. They are known that way in the market for a reason: it is completely unjustifiable in economic, biodiversity or carbon terms or any kind of decent debate to say, ‘We need a make-work program for cutting down native forests now that we’ve got no market, so we’ll set up furnaces and we’ll burn them instead.’

As it currently stands, the way the legislation is structured, you can only generate a renewable energy certificate from burning native forest residues if they are generated from a higher use, so the debate is now on as to what constitutes ‘a higher use’. The way it is currently structured has been interpreted to be a higher value use, and as a result the industry has not been able to access the renewable energy certificates in the way it would like. But it is now seeking to do so.

I can tell you that there is a proposed native forest furnace in the southern forests of Tasmania at Southwood. There is a proposal for one in north-west Tasmania. Gunns had a proposal for a native-forest-burning furnace at its pulp mill in the Tamar Valley. There is a proposal for one at Orbost, in Victoria. There is one proposed for Eden as well, and the one at Eden is already in the planning process. The promoters of that native-forest-burning furnace are saying that it is critical to them to access the renewable energy certificates as part of the RET.

If there is any suggestion at all that the logging industry can get a lifeline for continuing logging native forests in the absence of a market by achieving access to the RET then it needs to be knocked on the head immediately, and that is why I have moved these amendments. If we are serious about climate change, we need to now say that in the absence of any market we need to transition people out of native forests into working in the plantation estate. That does not mean that people lose their jobs; it means that people transition out of one type of forestry into a different type of forestry.

We have been facilitating that transition with millions and millions of dollars for a very long time. Into the Tasmanian Community Forest Agreement, for example, $72 million was poured, in order to help people get out of the high conservation value forests. We have had millions poured in, right around the country—in fact, $250 million went, as the Community Forest Agreement, to Tasmania. And it is an utter and absolute disgrace that Forestry Tasmania so badly manages the forest estate in Tasmania that they have made a loss. They have no cash at all, and so they have dipped into the Commonwealth funds that were put into the Community Forest Agreement. They have dipped into it for cash reserves because they have got none. Their cash at the end of the financial year was something like $3.3 million, and there is no way they have got the money to pay back right now what they have dipped out of their Commonwealth grant. I have reported this to the federal minister. I have reported it to the Auditor-General. And I am very keen to know how it is that Forestry Tasmania can access specific grant money for operating expenses to give them a cash reserve because they cannot, it seems, get an overdraft for themselves.

So this industry is in crisis in Tasmania. It is in crisis in Victoria. It is in crisis right around the country. This is the opportunity to fix the problem, not to throw them yet another subsidy so that they can just keep limping along, because governments cannot continue to run a native forest industry in the absence of a market. And creating a market in renewable energy would be immoral at a time when we need to be protecting the carbon stores and the biodiversity and transitioning to that plantation estate.

That is why this is a crucial amendment—to make sure that this cannot be exploited as a loophole and a make-work program. And it is not a figment of my imagination. Just have a listen to what the industry players had to say on The 7.30 Report last week—that that plant at Eden depends on this. But also, in the pulp and paper strategy that the government released recently, it said that the native forest industry depends on getting native-forest-burning furnaces up. This REC will be part of doing that, and it will be a wreck for biodiversity and for any hope of achieving a solution.

Right now the conservation movement and the timber industry are sitting down and trying to find a way to a 100 per cent solution to this issue, and if this is not removed from the REC now then this will continue to be there as an opportunity to undermine the solution that is within our reach. So this is critical. We need to be doing it right now. And that is why I am moving this critical amendment that takes away any loophole or lack of clarity and removes biomass from native forest vegetation as an eligible renewable energy source.