But specific policy changes could deliver more sustainable, longer term value to the sector, he said.
“There are steps to take that will reduce our reliance on log sales to China and avoid us getting to this point again,” he said.
The forestry sector has ground to near idle with a third of logging crews stood down and estimates 1500 jobs could be gone by year’s end.
Expectations are that even in a best case scenario the massive stockpile of logs on Chinese wharves won’t be cleared for at least five months.
“The answer lies in supporting local industry and processing but it has to be led by the Government,” Verry said.
Adding value in NZ can be tough because most customer countries including China subsidise their processing sectors.
However, Verry’s focus is on potential in the domestic market and relates to so far unfulfilled election promises made in 2017 to better support the industry with Government-endorsed timber procurement.
“If you look at France their government has required buildings to be made of at least 50% timber and bio-materials. Our analysis through Victoria and Canterbury Universities is if you can get to two-thirds timber then buildings are carbon neutral.
“The advantages are double whammies – you have planted more trees to absorb carbon but you also have construction being carbon neutral and reduced emissions from not using steel and cement.”
That leads to the next policy of harvest wood products being eligible for carbon credits, just as forests are, because when a tree is harvested the carbon remains in a timber product and a credit should be given.
He hopes discussions between industry and the Government will see that eventuate in the near future.
Meantime, steel and concrete manufacturers in China and Indonesia continue to be able to emit when producing their products, escaping any emissions obligations when selling products here.
Emissions from the construction industry, largely through steel and concrete production, account for 20% of NZ’s total carbon dioxide gas production or 10% of total emissions.
“The playing field needs to be levelled with a type of broad carbon-linked tax.”
The final policy Verry wants is greater support from the Provincial Growth Fund for processing new wood products not made in NZ.
“Practically every other country provides this type of support for wood processors that NZ processors have to compete with. We need a level playing field here also.”
He is confident the easy-win policies could add 1800 jobs and cut reliance on selling logs to China.
Verry’s policies have the support of the Wood Processors and Manufacturers Association.
Chief executive Dr Jon Tanner said the industry faces the ultimate irony of having logs exported to China, processed in government-subsidised plants there and shipped back here as building products to compete against locally processed products.
“So, through our own log trade we are essentially competing with ourselves.
“This is despite a decade of disruption and trying to rectify the impact of foreign manufacturing subsidies, which are actually illegal under world trade rules.”
He is heartened by prospects of a Government-sponsored industry transformation plan due out soon.
“There is opportunity in a crisis for the sector here. We have got ourselves locked into one basket for sales of timber. However, we need ministers to act within months after over a decade of this situation,” Tanner said.
He is heartened by Finance Minister Grant Robertson’s recent comments that coronavirus will prompt a reset in the industry, requiring large forest owners to work more closely with local mills and processors.
