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Burning native forests for energy under the RET

Estimates & Committees
Janet Rice 25 May 2015

Senator RICE: Good evening. I was wondering if I could ask some questions about the proposed inclusion of energy from the burning of wood from native forests under the renewable energy target and eligibility for renewable energy certificates, starting with what the government expects the energy generation potential to be from the burning of wood from native forests for energy.

Mr Archer: I might begin to answer to that question. It is probably fair to say that all we really have to go by is the past experience that we have—that is, that electricity generated using native forest wood wastes as a fuel source was previously eligible under the Renewable Energy Target Scheme, and that was the case from the commencement of the Mandatory Renewable Energy Target in 2001, through to November 2011. In that time, there was only one renewable energy certificate created specifically from the category of biomass from native forest wood waste. It is also the case that native forest wood waste embodied in either manufactured wood waste products from construction or furniture, or sawmill residue may also have been used to generate—

Senator RICE: We have not got much time. So, to cut to the chase, from native forests—basically, it has been based on previous experience?

Mr Archer: We do not really have any basis at this stage for forecasting what future experience may be.

Senator RICE: You have not done any projections of any different situation into the future compared with what—

Mr Archer: No, we have not gone into that detail. Our overall expectation based on past experience is that we are not expecting a lot of additional generation as a result of this measure.

Senator RICE: Do you know of any generators that are ready to make use of this?

Mr Archer: I am personally not aware of any.

Senator RICE: From native forest? No, you are not aware of them? Could you detail any industry bodies or businesses that have been requesting inclusion of the use of wood from native forest in the renewable energy target?

Mr Archer: There were submissions made to the 2014 review of the renewable energy target, and I gather some 46 submissions did address the question of the status of native forest wood waste.

Senator RICE: Are they public submissions?

Mr Archer: Yes, they are; they are public submissions. The review was based in the Department of Prime Minister and Cabinet, so through the PM&C website.

Senator RICE: Have there been any other submissions to government that are not public, that you are aware of?

Mr Archer: Not that I am aware of.

Senator RICE: Could you take that on notice and see if there have been any other submissions to government actively requesting native forest wood to be included?

Mr Archer: Yes, I can do that.

Senator RICE: Do you know whether any energy retailers have expressed interest in acquiring RETs from native forest wood burning?

Mr Archer: No, I am not aware that that is the case. That is not to say it is not the case, but I am not aware that that is the case.

Senator RICE: Okay—and/or whether there have been any energy retailers advising against allowing native forest wood to be included as RETs? Mr Archer: It is really a commercial decision for the liable entities under the scheme as to where they source the certificates. They need to meet their liabilities. I have not heard either way in relation to their views.

Senator RICE: Again, if you can take on notice whether there has been correspondence or advice either way from energy retailers about the inclusion of energy from native forest wood.

Mr Archer: Yes, I can certainly take that on notice.

Senator RICE: Okay. Is it planned to include the provisions for the burning of wood from native forest as part of the legislation that is going to be introduced, or by specific regulations?

Mr Archer: While the government has announced that it intends to reinstate eligibility for native forest wood waste, it has not made any announcements specifically about how it will do that. It is really for the government to state its intentions in that regard.

Senator RICE: Has the legislation or the regulations been drafted?

Mr Archer: We are working on a package. But, as I said, it is really a matter for the government as to when and what the nature is of its announcements in relation to the specifics of that.

Senator RICE: So, working on a package—when is it expected that it will be ready to be introduced to the parliament?

Mr Archer: We are working as fast as we can. We have been advised that it is the government's priority to prepare that legislation; and, partly, that is to provide the certainty that the industry is seeking.

Senator RICE: What is your time line, then? What are your expectations of when you will have something ready for government to introduce?

Mr Archer: The word I would use is 'imminent'. It is probably the best word I could use to describe that. But, again, it is really a matter for the government to decide when legislation will be introduced.

Senator RICE: In terms of the legislation regulations, is it expected that they will be similar to or different from the pre-2011 regulations?

Mr Archer: The general intent will be as it was previously, which is that it is not the idea that you would encourage harvesting of native forest wood waste for the sole purpose of energy production. Once again, for the details of that, you will have to wait and see.

Senator RICE: All right. In terms of the pre-2011 regulations, are there any power generators that are operating under the transitional arrangements in the 2011 legislation—operating under the regs that existed?

Mr Archer: Yes. I would actually have to take that question on notice. I am not aware that there are, but to be certain I need to take that on notice.

Senator RICE: If you could—and how many, what they are, how much power they are generating. In particular, do you know whether there are any processes of auditing them for whether they complied with the conditions under those regulations?

Mr Archer: I guess that sort of relates to the question of whether there are any. I will take that on notice.

Senator RICE: And, finally, given that it is one minute to 11: you have not done any further analysis, you were saying, based on past history; but have you done any analysis regarding potential carbon dioxide emissions from the proposal to include the burning of native forest wood under the RET?

Mr Archer: No, we have not. But, again, I think the general principle here is that this is native forest wood waste that would either be burnt anyway or be left to rot on the forest floor. The idea is that it is actually beneficial from an emissions point of view to have electricity generated from that wood waste, rather than have emissions emanate from it and no electricity generated.

Senator RICE: So you have not done any further analysis as to whether there would be other further CO2 emissions—what the carbon accounting of it would be?

Mr Archer: No.

Senator RICE: One final question: the Climate Change Authority in its review in 2012 recommended the government should commission a new study about the likelihood that the logging of native forests would increase if native forest wood waste was not eligible fuel under the RET. This was not considered in the Warburton review, but I am wondering whether, in the process of deciding to include wood waste, such a review was considered?

Mr Archer: We are considering and advising the government on what would be the most appropriate arrangements for reinstating native forest wood waste eligibility. Yes, the CCA made recommendations in that area, as did the Warburton review. All those factors are being taken into account.

Senator RICE: Has there been any internal review following that line of recommendation from the Climate Change Authority?

Mr Archer: I am not sure about how much detail to go into on our internal workings on this issue but, as I said, we have generally taken into account those previous recommendations and the subsequent work of the Warburton review.

Senator RICE: The CCA recommended that there be a review, so has there been any review of that type?

Mr Archer: There was been the Warburton review, but other than that there has not been a review.

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