• About
  • Forestry Investment
  • World Forestry Update
  • Archives
  • Categories
  • Archive for June, 2017

    New palm oil seeds 'could end deforestation'


    2017 - 06.29

    The cultivation of new high-yielding palm oil seeds could allow an increase of oil yields that may eventually end deforestation.

    Smark Tbk, a subsidiary of Golden-Agri Resources, has registered two clones of high-yielding oil palm plant material in Indonesia’s Catalogue of Seeds after receiving approval for use from the Ministry of Agriculture, promising they will yield to the highest levels in the industry.

    Named Eka 1 and Eka 2, the new seedlings are set to allow the firm to increase their yields dramatically without increasing their land use. Specifically, while current optimal conditions allow for palm oil yields of around 8 tonnes per hectare each year, the new seeds could increase yields to 10 tonnes per hectare each year.

    Commenting on the news, President Director PT SMART Tbk, Daud Dharsono said: "This kind of breakthough is at the heart of our intensification efforts, which we see as essential to delivering sustainable production of palm oil to meet a growing global demand. We will continue to identify new technologies and accelerate the adoption of the latest modern techniques to enhance not only our own sustainable agricultural practices, but those of the industry as a whole."

    According to Smart Tbk, the new seedlings were developed naturally using a conventional selection technique and tissue culture from elite palms, and are the result of twenty years of collaboration between SMARTRI and Smart’s Biotechnology Centre.

    When they're fully mature, Eka 1 seedlings are expected to yield 10.8 tonnes of crude palm oil (CPO), with oil extraction levels of 32 per cent. Eka 2 are expected to yield 13 tonnes with oil extraction levels of 36 per cent, making them even more promising. The seedlings are also expected to reduce harvest time from 30 months to 24 months, which could help reduce the industry's impact on forests.

    The risks of monoculture forests in China


    2017 - 06.28

    In the past decade alone, China has spent more than $100 billion on trees.

    The percentage of the country now covered in forest has gone from 19 per cent in 2000, to nearly 22 per cent, according to the Ministry of Environmental Protection, with some regions being completely transformed.

    This recent forest expansion is mostly to do with Beijing's Grain-for-Green program which has funded the reforestation of 31.8 million hectares – the biggest reforestation programme in history. In March, Premier Li Keqiang promised to expand this by turning another 800,000 hectares of marginal farmland into forest and grassland, an area larger than Delaware.

    Although the project is generally seen as a driver of positive change, recently, conservations have discovered that large swaths of newly planted forests provide few habitats for China’s many threatened species of animals and smaller plants – putting the country’s biodiversity at risk.

    Critics say the push to go green shouldn't just be about quantity, but also quality.

    The program was launched in 1999 to guard against the fear of recurring floods, and works by paying farmers to restore forests and grasslands where they had previously planted crops, helping to better protect against flooding and landslides. And in these areas, the project has succeeded – both soil retention and flood mitigation have increased by nearly 13 per cent between 2000 and 2010, according to a government survey launched in 2012.

    On the other hand, biodiverse habitats have decreased by 3.1 per cent since the spread of monoculture forests.

    The Chinese government puts the planting of monoculture forests down to a lack of experience in the program's early years, and they pledge to work on planting more mixed forests.

    President Xi Jinping is an advocate of the country's potential as a global climate leader, especially in the wake of the US withdrawal from the Paris climate accord. He has hopes that China will transform into “the ecological civilisation of the 21st century.” But first, the Grain-for-Green campaign needs to improve for the sake of biodiversity.

    30% of new houses in Russia to be built from wood


    2017 - 06.26

    In a recent boost for the timber industry, it's been announced that a third of new houses in Russia are to be built from wood.

    The corresponding decision was taken following a meeting between the Finance Minister of Russia, Anton Siluanov, and the Head of the Commerce and Industry Ministry, Denis Manturov, which was held in early May.

    Mr Manturov spoke on the importance of developing the forestry industry and outlined how the creation of new pulp, paper and board plants and wooden construction development will become the priorities of the timber processing complex development.

    Deputy Head of the Commerce and Industry Ministry, Viktor Evtukhov, said “A share of wooden housing construction might increase up to 30% of a total number of residential buildings under construction.”

    The Ministry of Construction is currently working out measures for the development of these wooden housing constructions, and norms and standards for designing several storey houses with the use of new materials meeting the “green construction” requirements are being advanced.

    Wooden housing construction is becoming an increasingly popular option globally, as people look for a strong and greener alternative to steel and concrete. The timber market is set to see a marked boost in investments response to this.

    Cees de Jager, general manager of the Binational Softwood Lumber Council, said “Wood buildings offer tremendous economic and environmental benefits.”

    According to a research by Chad Oliver, a forest ecologist at Yale University, the building industry could curb up to 31% of global carbon emissions by substituting concrete and steel with wood from sustainably managed forests.

    Growing recognition of forests leads to investment growth


    2017 - 06.26
    Growing recognition of forests leads to investment growth

    Growing recognition of forests leads to investment growth

    In recent years, investing in the natural world has grown beyond all expectations.

    Data recently published by Forest Trends shows that the amount of private capital invested into the natural world soared by 62 per cent between 2013 and 2015.

    Michael Jenkins, president and CEO of Forest Trends said: “The findings of this report speak to the growing recognition of our forests, our wetlands, our reefs, and other natural landscapes as smart investments – a notion that would have been unthinkable to most mainstream investors just five years ago.”

    “Just in the last two years covered by this report, we’ve seen a huge leap in demand for these kinds of tangible ‘real assets’ from investors. The demand is growing across the globe and from across investment instruments.”

    Forestry investments are seeing a particular surge thanks to a new understanding that investing in forests is an investment into our environment and helps to promote habitats and nature.

    More mortgage products are becoming available to assist people in buying non-commercial woodlands, and others are helping to promote investment into forest plantations intended to generate a commodity – namely logs or pulp, chipwood and fuel.

    According to the Forestry Investment Consultancy (FIC), forestry land is a relatively small investment but can yield returns of up to 7 per cent per annum. They also highlight the tax benefits of such a venture in certain locations.

    For those looking to invest in a less hands-on forestry initiative, there are a number of funds available that allow investors to access the benefits of owning forest without any of the land management responsibilities.

    Fund manager Timo Hakulinen says: “Forests are sound investment targets and offer a less risky alternative compared to, for example, equity investments. Trees keep growing even in times of economic downturn.”

    UK timber imports rise 18%


    2017 - 06.22

    Figures from Timber Trade Federation's (TTF) latest statistics bulletin have shown that UK timber import volumes increased by 18 per cent in the first two months of this year in comparison to a year ago.

    Panel products were up 23 per cent whilst solid wood imports were 16 per cent higher in January and February.

    Data revealed that hardwood imports were up 52 per cent to 100,000m3, although the bulletin urges caution as Finland and Norway are shown as having dramatic increases, with the former’s market share of UK hardwood imports increasing from 1 per cent to 9 per cent and the latter’s going from zero to 8 per cent. TTF suggest this distortion may have resulted from the likely mis-reporting of hardwood volumes.

    Germany, Latvia and Finland were the three European supplier countries who exported the largest increase of volumes to the UK.

    Here are some other key findings from the report:

    Softwood import volumes grew 13.7 per cent to 1.02 million m3.

    The value of sawn goods was around 10 per cent higher compared to a year ago, with planed goods soaring by 42 per cent.

    Plywood imports grew by 15.7 per cent to 299,000m3, with hardwood ply up 1.6 per cent to 180,000m3.

    Softwood ply import volumes rose 46.4 per cent to 119,000m3, boosted by growth from China and Brazil.

    Particleboard volumes rose 32.7 per cent to 147,000m3 aided by much higher volumes from Germany, with matching growth from Poland.

    OSB volumes were down 9.8 per cent to 46,000m3 and MDF shipments grew 48.2 per cent to 131,000m3.

    467 million hectares of 'lost' dryland forests found


    2017 - 06.21

    A new study has uncovered an incredible 467 million hectares of previously unreported forests.

    The dryland forests, equal to about 60 per cent of Australia's size, were found in all continents, but most were discovered in sub-Saharan Africa, around the Mediterranean, central India, coastal Australia, western South America, northeastern Brazil, northern Colombia and Venezuela, as well as northern parts of the Boreal forests in Canada and Russia.

    In Africa, the area known dryland forest area has doubled with the study.

    In total, these discoveries found 45 per cent more forest area than previous surveys.

    The incredible disparity in results can partly be explained by the difficulty in measuring drylands. The fact that they contain very few trees makes them challenging to quantify on a global scale.

    The findings were discovered when the researchers made use of high-resolution satellite imagery from Google Earth Engine and then used a simple visual interpretation of tree number and density.

    Andrew Lowe of the University of Adelaide, who headed the research, said "In the modern digital age we think we know everything about the Earth, but a lot of that knowledge comes from satellite imagery, like Google Earth, but when you see that type of satellite data, you have to make estimations on what type of vegetation occurs on the ground."

    Drylands have a history of being underappreciated by the timber industry, but this study has proven that they have a bigger capacity to support trees and forests that initially realised.

    World's largest engineered timber office built before 2019


    2017 - 06.21

    Next year, the tallest and largest engineered timber office building in the world is due to be built in Brisbane.

    Reaching a height of almost 45m, the ten floor tower designed by Bates Smart will become the headquarters of global engineering firm Aurecon.

    Australia Minister for Infrastructure and Planning, Jackie Trad, joined others at the launch of the project at the RNA Showgrounds redevelopment in Bowen Hills.

    The building, set for completion in late 2018, includes three bespoke ground level retail tenancies built using a revolutionary building timber technology called cross laminated timber (CLT) and glulum (glue laminated timber) which has a structural strength akin to traditional concrete and steel.

    CLT has a far lower carbon footprint than other building materials, the production process produces zero waste, and timbers are sourced from certified sustainably managed forests. Chris Lock, CEO of investment company IIG, said the new tower was a glimpse at the future of timber in construction.

    “We’re committed to helping move Australia to a low-carbon future; we look for property investments with excellent potential for environmental sustainability; where we can fund best-in-class construction, or actively manage existing properties to drive energy efficiency and very positive social outcomes,” he said.

    “We believe our approach helps drive demand for real estate that benefits the environment and the wider community, and ultimately delivers attractive returns for IIG’s investors.”

    This move comes amid an increased trend for using timber in construction.

    New Kenyan initiative to boost timber investment


    2017 - 06.19

    There is a new initiative in Kenya to help people to make the most from their forestry investments.

    Goldenscape Tree Ltd is responsible for planting more than 500 acres all over Kenya, with the aim of restoring the country’s tree cover, as well as its cool and wet climatic conditions.

    The company was started in 2004 by Peter Wangai who first began planting trees as a hobby. However, he soon found that he could monetise the venture by turning it into a form of investment for other people.

    Deforestation and desertification are major problems in Kenya where people continue to cut trees without replanting them, or buy rural land with the intention of using them as investment potential but ending up neglecting the land until it falls into ruin.

    The company aims to change this.

    Many Kenyans currently lack the time or money to develop their land, but Goldenscape Trees offers a solution.

    “Once a client allows us plant trees on their land, we manage the trees from the time we plant them until they are mature. This is advantageous to the clients in that they do not have to participate in the management of the trees or anything related to their growth since that is done by the company, so they do not have to worry about having to constantly check on the land,” he explains.

    When the trees are mature, they are sold locally or exported and the profits go to the clients, he adds.

    “We offer different options under our greenhouse investments. If a client has land that is less than an acre and is willing to invest with us, depending on their financial capabilities, we set up one or two greenhouses on their land,” says Mr Wangai.

    “We set up and manage the greenhouses and the crops until they are ready, then we harvest and sell them. The profits, like in the case of trees, go to our clients,” he adds.

    Ms Carolyn Wanjiku, the administrator at Goldenscape Tree Ltd, has said the benefits of the programme extend beyond the individual and to the country as a whole.

    “I would advise Kenyans to embrace such investments because all these projects have by-products that can be sold. Besides, they increase food and timber production, which not only benefits the client, but also goes to boost the country’s economy.” says Ms Wanjiku.

    Brazil leads race for sustainable biofuel production


    2017 - 06.16

    Protecting peatlands has become a global concern in the fight for sustainable forestry. Could Brazil's efficient, new approach to biofuel production be the solution?

    Although peatlands cover only 3-5 per cent of the Earth’s surface, they store an incredible 30 per cent of all soil carbon.

    However, peat fires and increased draining of these lands for agricultural purposes have led to massive amounts of carbon being released as carbon dioxide into the atmosphere.

    So far, this release of carbon has led to some of the worst environmental disasters of recent times.

    Because of this, experts have highlighted the need to consider alternative ways to use the land, such as providing farmers with new methods to stop the destruction and preserve carbon stocks in the ground. One of these methods would be in the creation of biofuel.

    Brazil, the world’s second largest producer of bioethanol fuel, has been a good model of this in action.

    Dr. Nils Borchard, a researcher from Ruhr-University in Bochum, Germany, said: “Brazil has developed very efficient agricultural technology that uses sugar cane and its wastes to produce power. This produces energy at a competitive price and provides farmers with a new market.”

    New research is currently underway to look into which species can be cultivated successfully on certain types of degraded peatlands to restore them into sustainable forest and produce biomass and bio-fuel.

    The need to develop and implement sustainable forest management strategies for bioenergy production is urgent, and Brazil is currently one of the countries leading the race – good news for anyone looking to invest in the region.

    Costa Rica leads Latin America in fight against deforestation


    2017 - 06.16

    A climate investigation published in the University of Costa Rica's weekly Semanario Universidad magazine shows that despite Latin America's marked deforestation, Costa Rica has managed to sustain and even increase its own forest cover.

    The United Nations Organisation for Agriculture (FAO) attributes the preservation to state support as well as various incentives.

    For example, Costa Rica's environmental services payment program (PSA) is one of the most successful environmental public policies in the country’s history, and has been used as a model for other countries
    .
    Between 1996 and 2015, investments in forest-related PSA projects in Costa Rica reached US$318 million, according to the FAO. The idea behind the program is simple and effective: if you keep the forest on your property, Costa Rica will pay you.

    The report found that the program tends to be more successful away from national parks where landowners can often find more lucrative uses for their land due to the presence of tourism, which means conserving forest for government payments is not as attractive as in more remote areas.

    A key finding of the report was that while other Latin American countries cleared forests to make room for agricultural production, Costa Rica was able to increase conservation and sustainable management of forests without threatening their food security at all.

    Through increasing agricultural productivity and importing food from countries with lower production costs, Costa Rica has found a way to preserve its forest cover while maintaining strong levels of food security.