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Emissions trading and reducing carbon pollution

CHAIR —I thank you for taking the time to talk to us this afternoon. Can you please make a short opening statement?

Mr Strie —Thank you very much for organising this hearing. I have come here, which is a 500 kilometre round trip, just to put that on notice. We all have come here because we want to ultimately do something positive regarding carbon sequestration in our own way. I think it is very important and I welcome that the Liberal and the Greens parties have jointly looked at extending the hearings to give more people and companies an opportunity to say something. I am not here to sell you anything. I would like to inform you and hopefully we can lift the debate from the party political fighting that I noticed. I was listening to all three senators this morning. Minister Wong was on as well. All of you have said how important it is to do something, which is really good.

There is something that I want to put to you: the terms carbon positive, carbon negative and carbon neutral. It is absolutely important. It is just like with old growth, regrowth, plantation, plantation forestry and so forth. In the same sense, there is a lot of confusion there. I am talking about carbon negative industry. The pyrolysis technology that BEST Energies has developed is about carbon negative, meaning that we can take more atmospheric carbon CO2 out of the atmosphere, as well as other greenhouse gases for that matter, and sequester them in the ground. It is not deep underneath in some sort of a rock formation, but in fact in the agricultural soil.

It was good to hear the Opposition Leader, Malcolm Turnbull, come out on the Australia Day weekend and said, ‘The future is in agricultural carbon sequestration or biosequestration through biochar.’ That is exactly what I am on about. However, as we have already heard, the sourcing is the key issue. As we heard from Forestry Tasmania, they have this idea that the wastage is there anyway, so we might as well do something useful with it. It is absolutely important.

The handout will provide you with some sort of overview. What we really need is a more complex, holistic approach to this whole topic. Instead of just saying, ‘All biofuels are bad’, in terms of competition to the agricultural industry, here we are talking about converting waste material from responsible operations to a positive, clean energy, electrical energy and thermal energy, reducing landfill and therefore methane gas emissions from landfill sites, and to give companies yet another opportunity to value add to whatever they bring into their farm gate and their factory gate. I am talking about food processes, for example, like abattoirs or others, and also sewerage sludge and so forth.

Sequestering carbon in the topsoil where it is useful can be done by turning it into a charcoal rather than composting organic material, by turning that into a stable carbon which lasts for hundreds, if not thousands, of years and has got an enormous surface area. When you consider that the porous nature of biochar has got between 400 and 800 square metres per gram of surface, that means that nutrients that the farmers apply through either liquid fertiliser, pelletised fertiliser or even organic fertiliser, have to be held in the soil. We hear about eutrophication of our rivers and streams. This is one way of mitigating that and reducing the runoff from our land.

There is a diagram here that you all have and I am happy to give you that in electronic form as well. It explains the technology and how it works. BEST Energies has been awarded the United Nations Environmental Day Award in 2007. We also went to the Bali Climate Conference and we are looked at by all sorts of industries. On one of the pages here I have listed the different feed stocks that are useful and that have already been identified. I heard Minister Wong say that there is a lot of research needed. Also, agriculture minister Tony Burke suggested that this is early days and that we have not done the research yet. I am more than happy to respond to that if you have any questions about that.

There is feedlot manure—we have got one large feedlot up here in Tasmania, not that I am a fan of such intensive animal husbandry; I am more for organic open fields and green grass management—however, from companies and they emit a lot of methane gas. Also, like I said, they run off nutrients into the subsoil.

There is a problem with sewage sludge and controlled waste: for example, poultry litter from poultry farms, which we have here in Tasmania. We are talking tens of thousands of tonnes or cubic metres of chicken litter which can be turned into firstly electricity, secondly thermal energy and thirdly into biochar. I am not talking about burning our forest for yet another product, I am talking about a by-product of responsible management.

On the next sheet I have potential feed stocks in Tasmania and I start with garden and orchard green waste. For example, one of the largest orchards in the world is in the Coal River valley. They have expressed great interest being part of this concept from their annual prunings. We have lots of woody weeds like ghost, willow pine and wattle in different parts of Tasmania, which we need to address regarding the fire risk management and the weed spread along the rail corridor and roads. Just recently we had a major fire in the Midlands where farmers’ fences were burnt down because there was not enough roadside vegetation management. With food processing waste, we do have large companies—abattoirs in the central north, food processors in the north west and on King Island. I am in contact with the King Islanders and hopefully, with an above party political approach on state and federal level, we are getting somewhere.

There is then the pyrethrum and poppy industry that are greatly interested. I may have mentioned that the largest meat processor in Australia, if not in the world, Swift, is also very keen to see this. They have supported this concept to the Garnaut inquiry.

I put last sawdust and fuel wood. That has to come from responsible forest management. There is no point ending up with more placards and more arguments about the continued forestry management, or mismanagement for that matter. Because of my background in forestry for over 30 years—I have an ecological forestry background—for me this is a whole-island approach. We should really manage our ecosystems from the seashore to the mountains and according to the expectation by society.

There are a few diagrams on technology. There is a pilot plant near Gosford, in Somersby in New South Wales, which is open to be visited. I understand the Opposition Leader has already booked in and I hope that the other two parties can also make themselves available to learn at first hand about what are the known and unknown ways of technology now.

This is about decentralised conversion of organic waste, different to the proposals that are currently before us from Forestry Tasmania and Gunns, for example. I am talking about a number of decentralised plants dotted around the island in key locations, be that in Smithton, Ulverstone, Longford or also here in Sorell. My role is just Tasmania; that is why I want to concentrate on that, but it has got national significance. This is really of international significance when you look at it. There is a conference coming up in mid-May on the Gold Coast. We are expecting 250 delegates from Australia, New Zealand, Japan and elsewhere.

CHAIR —I am sorry to cut you off, but we are really tight for time. I would like the senators to have the opportunity to ask a few questions. Would you like to start, Senator Cameron?

Senator CAMERON —Yes, thank you. Is it true that there is still a knowledge gap in the production and application of biochar?

Mr Strie —In the application, yes, but in the production, no. The science is quite clear. Unfortunately, Dr Krull was actually taken out of context during those media interviews that ran hand in hand with somebody having the idea over a coffee latte. I suggest that there is a lot known and there are interviews available to anyone.

Senator CAMERON —Has there been an environmental risk assessment undertaken about the use of biochar?

Mr Strie —This is the absolute heart of it, to have a whole life cycle analysis. The international biochar initiative and the Australia-New Zealand biochar network are not a lobby group as has been spread around in some media, especially from the UK. It is made up of 99 per cent science people.

Senator CAMERON —I am asking if there has been an environmental risk assessment done?

Mr Strie —It is ongoing.

Senator CAMERON —It is not completed. We do not know the environmental implications?

Mr Strie —Surely there are understandings if you take certain chars. It is not just one char. It is different if you use sewage sludge or you use it from sawdust, for example, then there are certain implications. If you have heavy metal in one then you would certainly work on the precautionary principle. There is ongoing research in America and in Australia. Australia is a leader with the New South Wales Department of Primary Industries.

Senator CAMERON —On that point, CSIRO have said that there still needs to be a lot of work done to understand and predict the underlying processes, particularly the waste holding capacity and water retention issues. Do you agree that they still need to be done?

Mr Strie —That is Dr Evelyn Krull that you have just quoted. Absolutely, there is a 30-minute with her since the media reporting in mid-January. She has put her case very clearly and many people have got the opportunity to get first-hand information. There are a lot of knowns and there are certainly unknowns. There is no hiding. It is definitely ready to go and anybody who wants to do the research needs to have a try in the first place.

Senator CAMERON —How can it be definitely ready to go if all this research has not been done?

Mr Strie —No. These things do not come with a magic wand. This takes time to roll out. Therefore, we do know that we have got methane problems. We have nitrous oxide problems. This is emitting from the soil. If you reduce fivefold the soil emissions from nitrous oxide, for example, then that is a huge plus. There are a lot of knowns and provided we can assess it by giving it proper respect and not dismiss it outright, then I think we can leapfrog very quickly.

Senator CAMERON —I am not trying to dismiss it, I am trying to understand the process. There is also investment uncertainty. There is no certainty in terms of investment, whether it can be done profitably, is there?

Mr Strie —One plant costs about $12 to $15 million. They can produce up to four megawatt of electricity; that requires 32,000 tonnes of dry matter per annum. We have got investors waiting to put their money where their thought is. It is not a question of going around to find a bank to finance this, we do have backing by the financial sector. It is not a problem, especially in the Tasmanian case. For our state, for our island, it would be a magnificent move because it goes hand in hand with branding and to be responsible with CO2 emissions.

Senator CAMERON —I have some questions that I will put on notice.

Senator MILNE —Thank you for coming today. I would like to talk about the Gosford plant for a start and the New South Wales Primary Industry Department’s support for that. Where do they source the waste? Is it a regional waste management strategy to get the volume that is necessary from a range of sources? How does that work?

Mr Strie —The plant in Somersby near Gosford is a pilot plant only. That is at the premises of BEST Energies. That was put there to provide the technical research and they make available the char that has been used during the various trials in America, New Zealand and in Australia. It is not used full time. It is not optimised. It is there to demonstrate, test and do the research.

Senator MILNE —Do you know yet what will be economical viable? The reason that I ask is that in the absence of a comprehensive and integrated waste management strategy, you are not going to have the certainty of supply of volume, nor certainty of sustainable resource to be sure that we know what we are getting, nor are you going to be able to work out your transport economics and so on. It is a technology that could be used, but it relies on a regulatory framework that prevents landfill of green waste, essentially.

Mr Strie —That is why I am talking to councils like Launceston City Council and Hobart, and the waste transfer station on the other side of the river here in Mornington. There are issues with the waste strategy, you are absolutely right. That is developing parallel to all this aim to get this going.

I am in contact with, for example, the King Island case, which is not a straightforward exercise, considering that King Island is almost just grass. There is not much woody vegetation left through, one could say, over clearing. This is an attempt, over decades to come, to have a whole-island vision. This involves farmers and the local council to see how we can optimise the situation where we are now. We should have more shelter for starters, because it has got certain benefits. There are land care issues or caring for land issues. I have a complete list of what I have to fulfil virtually to get supply, for example, from the pyrethrum industry. I know many thousand tonnes they will make available. I do know that the poppy industry produces X amount. They are increasing by another third. The Launceston City Council produces 12,000 tonnes of green waste per year. That is without even going and collecting it. If we want to stop burning in back yards and if we have a pick-up service to our farmers and to our small acreage holders and so forth, and if we can engage them so they can see that they are doing the right thing, they can turn their woody vegetation and, in fact, grass for that matter into the largest solar panel that we do have, which is chlorophyll.

The whole argument about biomass is really complex, rather than just simply saying, ‘Will we grow a crop of trees?’ The biochar initiative is not about growing monoculture tree crops or grass crops or hemp. If there is a by-product, that is where we will look at what it will cost or what will we be paid by the local government for landfill fees, for example—gate fees.

CHAIR —You have mentioned the one plant in New South Wales. Are you aware of any other plants around the country that are doing similar types of work?

Mr Strie —There is a small facility which Mr Turnbull visited in Newcastle. I have not seen it, but I am told by BEST Energies that they are new starters. They are not as far advanced. The most advanced plant is the BEST Energies one.

CHAIR —You mentioned your discussions with councils. Obviously, if this is going to be taken up and there has been broad discussion about the opportunities that exist on a broader scale, are there any interactions with landfill owners that operate some of the larger sites where this could happen in conjunction with their work?

Mr Strie —That is right. I talked about the climate manager from the Local Government Association. There is a working group already established. I understand you had Mr Flittner here today. He was part of that workshop that we had in the Midlands recently. This is in progress. I am working on that now. It is really a matter for you of having a national view.

CHAIR —I will come to that now. What sort of price signal? We have had some discussion about the economics of it from Senator Cameron. The economics of this are obviously a key tipping point. I am interested in what information you have on the economics of this. It is something that other colleagues have asked us about.

Mr Strie —What about feed-in tariffs? It is a question of the feed-in tariffs that Aurora, for example, would accept or would provide here.

CHAIR —Can you give us a sense of what sort of price signal? How much?

Mr Strie —We would believe that we could produce it for around 20c a kilowatt, whereas on King Island it would probably cost, at the moment, about 37c plus transmission. We believe that we can live with approximately 20c.

CHAIR —We are probably at slightly cross purposes. I will leave that question with you on notice. I think Senator Cameron also has some questions on notice.

Mr Strie —Please do that. That would be good.

CHAIR —We would be very interested in getting some information on the economics and the price signals required for this because it is one of the things that we are looking at as part of our inquiry. If you could assist us with that then we would appreciate that and any other questions that are coming on notice.

Senator MILNE —Also the regulatory framework that would be needed in terms of waste management to drive the process?

Mr Strie —Yes.

CHAIR —Thank you very much. The issue that you are talking about is one that is of particular interest to the committee. We thank you for your time. We are sorry that it is so truncated, but you will appreciate we do have some time management issues with the overall inquiry. Thank you very much for your time.

[3.10 pm]