Future market dynamics and potential impacts on Australian timber imports – Final Report

On current trajectories, Australia faces the prospect of being consistently unable to meet demand for new housing, because of a persistent and growing gap between demand and supply of sawn softwood timber, in particular. Taking immediate action to establish new softwood plantations, Australia can mitigate the risk and increase its sovereign supply capability for its most critical and sustainable building resource.

By no later than 2050, Australia will have:

• A population between 33.62 and 39.97 million people
• New housing demand around 259,000 dwellings per annum
• 5.175 million additional households whose demography will demand a marginally different housing mix to the current distribution of housing formats
• Sawn softwood demand of 6.507 million m3 per annum
• Almost 2.0 million m3 per annum higher than 2021
• Local sawn softwood production static at between 3.600 and 3.800 million m3 per annum due to constraints on sawlog supply
• An Implied Gap between demand and local production of 2.638 million m3 per annum, equivalent to 40.5% of total demand

To bridge the Implied Gap, Australia could establish as much as 468,000 hectares of additional softwood plantations, commencing immediately.

Ultimately, a continuing role for imports and an expanded softwood plantation estate and domestic production must each be part of the solution that will see Australia bridge the current gap between constrained local production capacity and future demand.

These are important considerations because plantations established today will not yield the bulk of their wood until very close to 2050.

To read the Future market dynamics and potential impacts on Australian timber imports - Final Report updated 1 August 2022, please click here.

Estimating the economic contribution of the forestry industry to Western Australia

The forest industry in Australia contributes to jobs and economic activity in multiple regional communities. This contribution results from the growing, management and harvesting of plantations and native forests, and processing of harvested wood. 

In 2017, Forest and Wood Products Australia engaged the University of Canberra, working with BDO EconSearch, to provide a socio-economic assessment of the forest industry in Western Australia for the financial year of 2015/16 (Schirmer et al. 2017). This report provides updated economic contributions for the 2019/20 financial year. This study presents findings for the forest industry in Western Australia (WA) and WA forestry regions, and includes activity dependent on the harvest of timber from softwood plantation, hardwood plantation and native forests. It does not examine sandalwood production. 

In 2019-20, the direct value of output generated by the WA forest industry at the point of sale of primary processed products was $663 million, increasing to $1,331 million when flow-on effects generated in other industries as a result of spending by the forest industry are included. This total included $235 million dependent on native forests, $543 million dependent on softwood plantation and $553 million dependent on hardwood plantations. 

However, value of output is not always a good indicator of the industry’s overall contribution to the local economy, as it does not identify the extent to which the economy of a given region benefited from the industry’s activity in the form of returns to business owners, wages and salaries, and taxes. Measuring the industry’s contribution to Gross State Product (GSP – the state equivalent of Gross Domestic Product) helps address this. In 2019-20, the forest industry directly contributed around $279 million to GSP in WA, and a total of $655 million once flow-on effects through the entire economy were included. This total included $116 million dependent on native forests, $278 million dependent on softwood plantation and $261 million dependent on hardwood plantations.

The forest industry in WA generated a total of 1,960 direct full time equivalent (fte) jobs in 2019-20, increasing to 4,657 fte jobs once flow-on effects through the entire economy were included. Up to the point of primary processing, a total of 1,015 fte jobs were generated by the native forest industry, 1,916 by softwood plantations, and 1,727 by hardwood plantations grown in WA.

In terms of total number of jobs, the forest industry in WA generated 2,134 direct jobs in 2019-20, increasing to 4,941 jobs once flow-on effects through the entire economy were included. Up to the point of primary processing, a total of 1,062 jobs were generated by the native forest industry, 2,059 by softwood plantations, and 1,820 by hardwood plantations grown in WA. 

 SAE178-2021_WA_Forestry_Contribution_Final.pdf

Timber Usage in Residential Construction 2017-18 dataset: Report on methodology and results

The FWPA has supported research to better understand timber usage in residential construction which is a major market for timber and engineered wood products. However, the quantity of wood products and the specific application in new house construction remains unclear.

In order to help address this, FWPA has undertaken a project to extract data from a sample drawn from a pool of nearly 20,000 residential building plans for the 2017-18 period for NSW, Queensland and Victoria. 

This data has been used to calculate detailed information on timber materials used (by type, grade and end-section), and dimensions (lineal metres and square metres) by application in a new house. 

To review this report’s findings, please contact Kevin Peachey, FWPA Statistics & Economic Manager on kevin.peachey@fwpa.com.au or 0411 060 186. 

Estimating the implications of net-zero targets

With the recent publication of the Intergovernmental Panel on Climate Change Sixth Assessment Report providing more evidence of the need for urgent action to address climate change, Australian companies are increasingly expressing an ambition to achieve net-zero emissions by 2050.

The quantum of emissions reductions required is significant and there are often limited options for companies to achieve their targets through changes to their own operating processes in the short term. Therefore, many companies are considering the use of carbon offsets to reduce their overall net contribution to climate change. 

This study investigated the greenhouse gas emissions (GHG) of the 50 highest valued companies traded on the Australian Stock Exchange (ASX50) to understand the quantity of emissions which would need to be mitigated or offset annually to achieve net zero emissions by 2050. The reported emissions of these companies were used to determine the area of timber plantations or environmental plantings required to produce an equivalent volume of carbon abatement each year. From this, a measure of the carbon abatement efficiency (i.e. ha / tonne CO2-e abated) was estimated for both timber plantations and environmental plantings.

 Final Report 

 Estimating_Implications_of_Net_Zero_Targets_Report_Final_PRE562-2021.pdf

Estimating the benefits of an emissions reduction fund method for the use of timber products in buildings

The introduction of Emissions Reduction Fund (ERF)  method has the potential to directly assist Australia in reducing its greenhouse gas emissions by incentivising greater use of sustainable timber in the structural components of residential and non-residential buildings in place of more emissions intensive building materials, like steel and concrete.  

The introduction of the proposed ERF method may also lead to an increase in Australia’s carbon sequestration potential through an increase in the domestic supply of softwood sawlogs. An increase in supply is predicated on increased sawlog demand placing upward pressure on sawlog prices and incentivising investment in domestic sawlog supply.

Key findings from the study include:

• 1) A 1% upward shift in the market share of structural timber in place of steel and concrete, in class 1, class 2 (below 9 storey) and non-residential buildings over the period of 2021 to 2050 would reduce emissions by 1.3 Mt CO2-e in total and 1.0 Mt CO2-e domestically.
• 2) The domestic emissions reduction from a 1% upward shift is equivalent to 0.03 Mt CO2-e annually over the assessment period. A 10% and 20% increase in market share over this timeframe is estimated to have a ten and twentyfold effect on the level of emissions reductions.
• 3) A 1% upward shift in the market share of structural timber will require a 5.3 million m3 increase in above ground tree biomass between present day and 2050. This biomass has the potential to sequester 4.7 Mt CO2-e, which equates to 0.15 Mt CO2-e of reduced emissions annually.

Annual emissions reductions from a 1% increase in the market share of timber combined with potential additional annual carbon sequestration is equivalent to 2.2% of the abatement purchased by the Clean Energy Regulator in 2020. When these emissions reductions are combined (direct and indirect emissions reductions), the emissions reductions from carbon sequestration account for about 80% of the total estimated emissions reductions from the proposed ERF method. However, there is less certainty associated with emissions reductions from carbon sequestration than with the emissions reductions from greater use of sustainable timber. This is because an increase in sawlog supply is dependent on softwood sawlog prices increasing sufficiently to stimulate additional domestic plantation investment.

PRA541-2021_Benefits_of_ERF_Method_Report_Final.pdf

Timber Framed Residential Housing: Thermal Bridging & The path to 7 Star NatHERS

The Australian and State and Territory Governments will introduce more stringent thermal performance requirements for residential homes in the next revision of the National Construction Code due in 2022. It is anticipated that a 7-star minimum (up from the current minimum of 6-stars) NatHERS Star Rating will be the requirement for new residential homes.  

Improvements will need to be made to the thermal envelope of residential buildings in order to meet the new standards. 

As such the scope of this study is to (1) investigate realistic and practical measures that could be implemented to meet the proposed energy efficiency standards and what impact that will have on the nature of timber framed homes and (2) investigate the impact of thermal bridging on wall section R values in order to ascertain requirements for both timber and steel framed systems to perform comparably.

 Final_Report_Timber_framed_housing_the_Path_to_7_Star_PRA526-1920.pdf

Click here to access the WoodSolutions Webinar | How We Can Build Australia's Future 7 Star Homes

Benefit Cost Analyses of FWPA R&D projects: November 2020

FWPA contracted Natural Capital Economics to undertake an economic impact assessment of four randomly selected projects. The sample was selected from projects that were funded and completed between the year 2011 and 2018. The economic assessments will be used for reporting to the FWPA stakeholders (annual reporting), meeting the statutory funding agreement with the Australian Commonwealth Government, and for reporting to the Council of Rural Research and Development Corporations. 

The primary approach used to assess the impact of the four R&D projects is cost-benefit cost analysis (CBA). The assessment was a desktop study, supported by consultation with key R&D project personnel, literature review, and additional data gathering, as required. 

This report presents results from an impact assessment of four projects that were funded by Forest and Wood Products Australia (FWPA) between 2011 and 2018, in conjunction with several other stakeholders. A cost-benefit analysis framework was used to scope and quantify the identified benefits. The evaluation was a desktop study, supported by consultation with key R&D project personnel and a review of the literature. 

The four projects that were selected by FWPA for inclusion in this study were:

• Creating a pathway to build timber frame houses in a traditionally double-brick housing market (PNA371),

• Adaptation strategies to manage risk in Australia’s plantations (PNC228),

• Life Cycle Assessment of a 5 Storey Residential Building in Parkville (PRA334), and

• Economic contribution of the forestry industry within the Green Triangle (VNA471).

The present value of costs for total investments in the four projects ranged from $50,294 to $1.98 million and $42,780 to $841,131 for FWPA’s contribution. The net present value of the total investment ranged from $494,837 to $5,715,529 and the benefit cost ratios ranged from 6:1 to 20:1. The results indicate that all four projects were viable with beneficial outcomes for the levy-paying industry and community at large.  

PRE528-2021_Final_Report.pdf

Six Storey Timber Framed Building’s Movement and Moisture Content

The aim of this project was to obtain real data on the temperature, relative humidity, moisture content of timber and vertical displacement of a real, six-storey timber-framed building, during its construction and initial occupation.

Fourteen months of data was obtained over the construction, handover and the early occupation of the building. Twelve months of data were obtained, representing the period the building was enclosed, representing the annual seasonal weather variations.   

The building experienced extreme temperatures variation from minus 0.9 to 47oC, also experienced a very wet period, receiving 87 mm of rain, following six months of very dry conditions. Surprisingly with this variation of weather conditions, the movement recorded within the building was much less than the expected 6.0 mm per storey.

Much of this reduced movement can be attributed to the use of engineered wood floors – Cross-laminated timber and Laminated Veneer Lumber load-bearing studs. The use of these materials reduced movement from crushing and deflection. 

Although beneficial information was found from this research, Western Sydney represents only one climate zone in Australia. It is recommended that further monitoring of timber buildings occur in regions such as Melbourne and Brisbane is undertaken. Furthermore, the data on moisture content is representative of subsurface conditions and not the average of the entire timber element. Explanation or advice is needed to convert subsurface moisture content reading, as recorded in the above research, to the average moisture content of the timber element. This advice is particularly relevant to thick timber elements such as CLT. 

Project Report PRA449-1718

Australian Plantation Fire Database Update

Disclaimer: The information you provide in this submission will be used, as outlined, to develop a historical database of plantations fire events in Australia. The information will be disclosed to specific third parties including Geddes Management. Any personal information provided, such as your name, email address, and phone number, may be shared with employees of FWPA and Geddes Management for communication purposes and will not be used or distributed publicly without your consent.
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Practical Measures to Build Climate and Disaster Resilience at the local, regional and national level – AS3959 and timber construction

This report has been prepared to provide a review of the development of the Australian Standard Framework (Australian Standard AS 3959 and the related test methods and material standards) for the construction of residential buildings in Bushfire-prone Areas (BPAs) and its application to timber for consideration by CSIRO, the Chief Scientist and expert advisory panel. The review referenced studies undertaken following major bushfires and technical developments relating to the evaluation of bushfire resistant materials and construction methods and indicated how these had been addressed through progressive revisions of the standards. 

 Practical_Measures_to_Build_Climate_and_Disaster_Resilience_-_EFT.pdf