Planned Plant To Produce Low Emissions Fuel To Replace Coal A Step Closer With Agreement To Lease Kawerau Site

Plans to build New Zealand’s first plant to produce low emissions fossil free fuel to replace coal have moved a step closer with the signing of an agreement to lease a site at Kawerau.

Australian listed company Foresta today announced the signing of a 30-year lease (with a 20 year right of renewal) on a 9.6 ha property in Kawerau with Putauaki Trust.

Foresta plans to invest some $300 million building the plant which at full production will employ more than 100 workers.

"There’s a huge opportunity in New Zealand for our world leading low emissions technology and today we’ve taken a major step forward in our plans," said Foresta Chairman Henry Cheng.

"We’re very excited to play our part in building a greener, more sustainable future for New Zealand by producing our unique low impact torrefied wood pellets."

The site chosen for the plant is in an industrial zone developed by Putauaki Trust with the support of the Provincial Growth Fund which funded significant roading and other infrastructure improvements.

Foresta is currently negotiating supply agreements with owners of sustainably managed pine plantations. In December Foresta signed a 10-year agreement with South Island energy distribution company Tailored Energy & Resources Ltd to supply 65,000 tonnes of pellets annually to its industrial customers.

TERL is an energy distribution company supplying solid fuels, mainly coal and wood pellets, for raw resource processing such as milk, meat and wool as well as energy supply for industrial heating of schools, hospitals and horticulture.

The production process produces torrefied "black" wood pellets - involving heating the wood pellets to between 200 and 300 degrees Celsius, in the absence of oxygen. Black wood pellets have the potential to significantly reduce carbon emissions when used as a drop-in replacement for coal, as well as reducing emissions from shipping for every log not being exported. A recent Genesis trial at Huntly power station using similar pellets reduced emissions by at least 90%.

"With the phasing out of industrial coal boilers by 2037, Foresta is uniquely placed to provide locally produced black wood pellets which are a seamless drop-in replacement for coal as a fuel source in boilers without any loss of energy intensity."

New Zealand currently consumes around two million tonnes of coal per annum for industrial processes, electricity generation and commercial heating. Just seven million tonnes of pine feedstock would be used to produce two million tonnes of black wood pellets, which can directly replace the country’s annual coal consumption.

"The fuel could potentially reduce New Zealand’s total annual gross greenhouse gas emissions by 5% while adding 20% value to the country’s forest revenues."

Foresta further adds value by using the underutilised stumps and tops of the trees.

"By doing this, Foresta not only increases the volume yield of the forest by up to 20% but helps mitigate the slash issue that has plagued the industry for so long and caused so much concern in communities."

The planned plant will also produce natural pine-based chemicals (rosins and terpenes) from pine trees which can replace petroleum sourced chemicals. These are used in everyday items including flavours, fragrances, chewing gum, paint, ink and tyres.

"Today marks a major step forward for Foresta and underlines our commitment to helping New Zealand build a more sustainable and environmentally friendly chemical and energy industry," said Henry Cheng.

Background on Foresta

Foresta is positioning itself to become New Zealand's first supplier of natural and renewable pine chemicals and black pellets. It has developed a proprietary process to naturally extract pine chemicals by employing the tree’s own solvent chemicals to extract rosin and terpenes. These products are commonly used in industrial manufacturing and are a key input to everyday end products.

Q&As

When will the plant ramp up to full production?

The plant will reach full production three years after opening, with estimated production of 52,000 tonnes pa of chemicals and 210,000 tonnes pa of torrefied pellets.

How long will it take to build the plant?

Foresta expects to complete obtaining all consents and begin construction in the last quarter of 2024. Construction of the first production line is expected to take two years with Stage 1a of the plant opening in 2026.

How are the black wood pellets produced?

The raw materials - timber and stump - are firstly reduced into wood chips which are then washed to extract the pine chemicals (rosins and terpenes), which are used to produce other end products. The timber is then dried and pressed into wood pellets. The torrefaction process involves heating the wood pellets to between 200 and 300 degrees Celsius in the absence of oxygen. The torrefaction process is a thermochemical process that reduces the volatile content of the wood, thereby improving the energy density, hydrophobic behaviour, eliminating biological activity and improving grindability, which makes the black wood pellets a drop-in replacement for coal.

Where will Foresta source the raw material feedstock?

Foresta expects to secure supply agreements with forest owners within 120km radius of the plant. It has recently signed a harvesting contract with Silvertree Biomass Solutions to harvest 243,000 tonnes per annum of logs, stumps and other approved biomass which accounts for the total raw feedstock requirements for Stage 1a of the plant.

What is Foresta’s long term vision for production in New Zealand?

Foresta is committed to producing more than 2 million tonnes per year of torrefied wood pellets by 2030 from seven regional plants located near the pine resource. The wood pellets will be a direct replacement for the 2.1 million tonnes per year of coal consumed nationally in energy production.

© Scoop Media