New Zealand Should Knock! Knock! On Wood
Part Seven: New Zealand’s Rack-Rent Housing Crisis
The planet is on fire. Humanity is responding — hopefully fast enough
Europe’s coal and steel union evolved into the European Union. Which is now evolving into an environmental union that intends to tax imported carbon. Such a tax would make exporters to the EU pay more for goods like steel and cement.
The global warming threat to humanity and the international response has significant implications for New Zealand. The country should carefully consider its position.
Australia is attacking the EU plan, if the US follows the EU lead, then Australia will eventually follow too.
It is not in New Zealand’s best interest to align with Australia’s slow game plan.
A fast climate change agenda has economic opportunities for New Zealand — an open-minded view of the situation would see the opportunity. In particular, that New Zealand can take a globally important role in reducing construction related CO2 emissions.
For a century-and-a-half large buildings in the world’s cities have been constructed from steel and concrete.
There is now an alternative — wood has the structural properties to be an engineered building product.
As a result of timber research, on issues like fire protection, restrictions on building larger buildings from wood have been relaxed.
Engineered wood products are becoming increasingly sophisticated.
Historically, the rise of cities, the industrial revolution, and increased greenhouse gas emissions have all been closely connected.
Greenhouse gases, such as carbon-dioxide, nitrous-oxide and methane that were locked deep under the earth, or in forests, grasslands, wetlands, soil, peat, and other biomes, have increasingly been released into the atmosphere. Rising levels of greenhouse gases are causing multiple feedback loops and tipping points that are negatively affecting the environment, the most significant being global warming.
Life in the pre-industrial era never extended much further than the neighbouring village. City-life in the modern-era has meant mobility has significantly increased. Globally the population of cities is expanding and the population of rural areas is declining. The rise of the city is predicted to continue for another hundred years, before the process of urbanisation and female education, is expected to lead to global population decline. Thousands of cities are expected to double in size in this intervening period.
Humanity needs a Houdini trick — some way to minimise its planetary impact before it reaches the turning point where population decline can ease pressure on resources. Climate change is probably the biggest choke point. Currently, the world is on a pathway to over 3 degrees in warming by the end of the century — which will destroy modern life as we know it.
Better forms of mobility will be a huge part of this Houdini trick. But that is not the focus of this paper. At least not directly.
Concrete and steel together account for 14.7% of global carbon dioxide emissions. Construction and manufacturing are 9.3% of New Zealand’s gross emissions.
The proposal is simple — for climate change reasons cities need a new diet. Less concrete and steel — and more plant-based construction materials that sequester carbon, such as, engineered wood. This could be called the vegetarian city model.
For NZ-Inc this opportunity could be like refrigerated shipping in the 1880s. That new technology had significant national implications as the economy transitioned from a boom-bust extractive economy to a more stable renewable economy— i.e. the transition from gold mining, native-timber felling, whaling and so forth to dairy and lamb exports (of course now agriculture has to tackle its climate change emissions to be truly considered a sustainable renewable industry). New Zealand needs to make a similar if not greater transition now.
Currently, the majority of New Zealand’s wood exports go to China as raw logs. Last year 80 per cent of the country’s $2.8b log trade was earned in China. There are concerns that New Zealand is overly reliant on this one market and that China may be artificially raising log prices — against World Trade Organisation rules — which disadvantages opportunities to add value to domestic wood products.
There are also concerns that methyl bromide gas used to fumigate logs for export to China and India is toxic to humans, damages the ozone layer, and international agreement requires it to be phased out — something that New Zealand has struggled to do for more than ten years.
A 2016 technical report showed that from New Zealand’s 10.38 million cubic metres of log exports to China — 2.48m m3 was processed into solid lumber and 2.36m m3 into plywood, both of which were used for temporary purposes as form-work for concrete construction. Because of these factors the timber exports were estimated to have an average half-life of only 6.6 years.
The report also found some of the resulting waste wood was repurposed into lower grade board products but mostly it was burnt — thus quickly releasing the stored CO2 into the atmosphere.
New Zealand produces tens of millions of cubic metres of wood each year, much of which is exported. As a percentage of world production this is quite small. Although it is a higher proportion of sustainable timber production. How high is a difficult figure to find.
New Zealand should aim for its pipeline of timber exports to go into long life-cycle products that sequesters carbon for decades — centuries even — not years.
Global shortage of wood products
In theory, New Zealand should not be dependent on one market for its wood exports as there is a global shortage of wood products.
Currently, some of the shortage is related to temporary Covid factors while a good part is structural change related to increased global demand for long lasting wood products, especially engineered wood products.
The increase in demand for sustainable structural building products can be seen in media material such as this:
- The hottest new thing in sustainable building is, uh, wood — The many, many benefits of using wood in place of concrete and steel
- Wooden skyscrapers: Sustainable homes of the future?
- This Swiss Building blew me away! All Wood and Concrete — No Insulation
PF Olsens June 2021 update in its regular Wood Matters reports discusses the shortage:
You do not have to look too closely to notice the extent of the word-wide shortage of wood products. Just a few of the recent headlines are noted below.
— More than 90% of US homebuilders report a shortage of timber.
— Turkey has started to limit export of some timber products.
— Production of about half of Germany’s furniture manufacturers is restricted due to material shortages. There is a particularly tense supply situation for chipboard, MDF and HDF boards.
— Prices for wood products in France are up 50% since the start of the year as the industry is struggling with a new law that requires half of the materials used to construct public buildings to be wood or other natural substances. The law is part of the country’s drive to become carbon neutral by 2050.
— Sawn timber prices have doubled in the Netherlands in recent months.
— Lumber futures in Japan topped US$1,700 for the first time in history and lumber prices are about three time higher than what they were a year ago.
Log prices are also escalating because Russia intends to ban the export of softwood logs from 2022. It was President Putin who announced this policy which almost certainly means it will be implemented, especially as it is supported by the Russian sawmill industry. The consequence of the log ban is China will have to source 4–5 million cubic metres of logs from somewhere else, which in the short-term will be good for New Zealand’s log exporters and bad for the country’s sawmills.
What technologies can help cities go on a plant-based diet?
Accoya — British company Accsys Technology manufactures Accoya using an ‘acetylation’ process that turns fast-growing, sustainably-managed softwoods like Pinus radiata into wood that has the durability and dimensional stability properties of slow-growing, tropical hardwoods without the accompanying deforestation and habitat loss.
The proprietary acetylation process essentially pickles the wood in vinegar (acetic anhydride). Water-loving hydroxyl compounds are sucked out and replaced with naturally occurring acetyl groups. This means Accoya has barely any swelling, warping or cracking and a much slower decay rate. Accoya offers an unrivalled 50-year warranty for wood durability and a 25-year warranty in ground or freshwater. Accoya is non-toxic and 100% biodegradable unlike the chromated copper arsenate (CCA) treatment process that is the mainstay of New Zealand’s wood industry (Note CCA is banned for residential use in the US, EU and Australia).
Accoya is being used to make windows and doors in the UK. A joinery manufacturer explains why Accoya is such a good option for his industry in this video (the field experiment is very revealing).
Cladding in Finland.
A motorway bridge and canal walls in the Netherlands.
Decking in Australia.
The acetylation process was partly developed by Scion New Zealand — who sold this IP to British firm Accsys in 2006. Which helped Accsys to commercialise Accoya. This involved an evolving experimental Netherland production plant and long-term brand investment. Accoya is now well recognised for its sustainable environmental qualities — meeting numerous European standards and has a good reputation for its technical characteristics.
Pinus radiata is recognised as the wood most suited to the Accoya process. In New Zealand pruned logs are processed into dried clear boards that are then exported to the Netherland factory for the acetylation treatment and some Accoya is re-imported back into New Zealand. The value-added process according to a Farmers Weekly video interview is as follows. The pruned log is sold by the forest owner for about $180 m3, the clear board processing in New Zealand raises its value to about $1000 m3, and the Accoya that is re-imported back to New Zealand sells for about $3500 to $4000 m3.
There is a tendency to bemoan lost IP opportunities in New Zealand — but it was unlikely that a government funded research institute could have advanced the acetylation process much further than they did. New Zealand probably needed a well financed European partner with a long-term focus to make the sustainability regulatory case and innovative plant manufacturing investments to progress commercialisation as quickly as has been achieved.
Going forward, both Accsys and the New Zealand wood industry want to expand and diversify its markets — Accsys believes it is currently only catering for 2% of its potential market. In my opinion NZ Inc — including government — should be engaging constructively with Accsys in this pipeline of work.
Optimised Engineered Lumber (OEL) is a commercial product developed in New Zealand. It is structural lumber beams constructed from the stronger and weaker parts of a tree trunk in a way that optimises the amount of wood recovered from each log and the strength of the resulting wood products.
OEL is made from thin strips of wood that are finger-jointed and laminated together. By laminating the wood the stiffness and strength is improved. The OEL process means the whole log can be used to make high quality structural products, whereas previously much of the log could only be used for low value uses.
The first OEL plant was opened in Gisborne by Wood Engineering Technologies (WET) in June. When fully completed it will have six production lines producing up to 140,000 cubic metres of OEL — enough for more than 11,000 houses — and employing more than 130 people.
Wet chairman Angus Fletcher said:
“Our disruptive technology turns unprocessed logs that would have otherwise been sent overseas into an innovative, high-value product. And it does it in a fully automated, artificially intelligent, robotic factory in less than 12 hours while creating skilled, higher-paid jobs in our regions — New Zealand innovation at its best.”
Cross laminated timber (CLT)— Red Stag Timber, an independent and privately owned timber company based in Rotorua, will shortly open a new $50 million wood processing plant. The Red Stag facility will have the capability to produce CLT panels that exceed 16 metres by 4 metres in size. This will allow for fewer connectors and an overall faster construction process.
The plant will add 5% to the capacity of the New Zealand wood processing sector. That equates to around two thousand dwelling units.
Red Stag group CEO, Marty Verry, said
“CLT has a value sweet spot in large-format structures, buildings of three stories or more, and for mid-floors in terraced housing built to the NZS 3604 standard. Apartment buildings and fast-to-install CLT mid-floors will be our residential focus areas.”
Substituting for wood in the built environment has already begun to change New Zealand cities. There is plenty of potential for more change. The better New Zealand becomes at constructing its own built environment in engineered wood, the better it will be at exporting these high value wood products overseas for the planets benefit.
Decision makers — like landowners and developers — need to gain more confidence in building with engineered wood.
In the rebuild of Christchurch following its devastating earthquakes of 2010/11 — of the over 1600 large building rebuilds — less than 100 used engineered timber. Professor Buchanan discusses this in a talk about timber building and carbon forestry.
The next paper in the Rack Rent series will discuss how New Zealand can make the most of its ‘knocking on wood’ opportunity. It will look at issues like the governments timber first policy.
Further reading and viewing:
Engineered-wood can be used in the construction of bridges.
There are many technical papers describing the timber construction opportunity.
Financial investors have identified modified Pinus radiata as an investment opportunity.
Engineered timber is cost competitive with steel and concrete.
A farm forester describes the Accoya wood industry opportunity for New Zealand.
What if wood could be welded like steel?
What if carbon fibre reinforced wood could replace steel reinforce concrete?
