Plans underway to build $300m fossil-free fuel plant

Plans to build NZ’s inaugural plant to produce low emissions, fossil-free fuel to replace coal have moved a step closer with the signing of an agreement to lease a site at Kawerau

Henry Cheng

Foresta, an Australian listed company, announced the signing of a 30-year lease (with a 20-year right of renewal) on a 9.6-hectare property in Kawerau with Putauaki Trust. Foresta plans to invest around $300 million in building the plant, which at full production will employ more than 100 workers.

“There’s a huge opportunity in New Zealand for our world-leading low emissions technology and today we’ve taken a major step forward in our plans,” says Foresta chairman Henry Cheng.

The chosen site for the plant lies within an industrial zone developed by Putauaki Trust, with the support of the Provincial Growth Fund, which funded significant roading and other infrastructure improvements.

Foresta is currently negotiating supply agreements with owners of sustainably managed pine plantations. In December, Foresta signed a 10-year agreement with South Island energy distribution company Tailored Energy & Resources Ltd to supply 65,000 tonnes of pellets annually to its industrial customers.

The production process involves the creation of torrefied ‘black’ wood pellets by subjecting them to temperatures between 200 and 300 degrees Celsius, in the absence of oxygen. Black wood pellets have the potential to significantly reduce carbon emissions when used as a drop-in replacement for coal, as well as reducing emissions from shipping for every log not being exported. A recent Genesis trial at Huntly power station using similar pellets reduced emissions by at least 90%.

New Zealand currently consumes around two million tonnes of coal per annum for industrial processes, electricity generation, and commercial heating. Seven million tonnes of pine feedstock would be used to produce two million tonnes of black wood pellets, which can directly replace the country’s annual coal consumption.

“The fuel could potentially reduce New Zealand’s total annual gross greenhouse gas emissions by five percent while adding 20% value to the country’s forest revenues.”

Foresta says they further add value by using the underutilised stumps and tops of the trees.

“By doing this, Foresta not only increases the volume yield of the forest by up to 20% but helps mitigate the slash issue that has plagued the industry for so long and caused so much concern in communities.”

Foresta expects to complete obtaining all consents and begin construction in the last quarter of 2024. Construction of the first production line is expected to take two years with Stage 1a of the plant opening in 2026.

Source: Foresta

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