Australian listed company Foresta has announced the signing of a 30-year lease (with a 20 year right of renewal) on a 9.6 ha property in Kawerau with Putauaki Trust.

Foresta plans to invest some $300 million 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," said Foresta Chairman Henry Cheng.

"We’re very excited to play our part in building a greener, more sustainable future for New Zealand by producing our unique low impact torrefied wood pellets."

The site chosen for the plant is in 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.

TERL is an energy distribution company supplying solid fuels, mainly coal and wood pellets, for raw resource processing such as milk, meat and wool as well as energy supply for industrial heating of schools, hospitals and horticulture.

The production process produces torrefied "black" wood pellets - involving heating the wood pellets to 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%.

"With the phasing out of industrial coal boilers by 2037, Foresta is uniquely placed to provide locally produced black wood pellets which are a seamless drop-in replacement for coal as a fuel source in boilers without any loss of energy intensity."

New Zealand currently consumes around two million tonnes of coal per annum for industrial processes, electricity generation and commercial heating. Just 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 5% while adding 20% value to the country’s forest revenues."

Foresta further adds 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."

The planned plant will also produce natural pine-based chemicals (rosins and terpenes) from pine trees which can replace petroleum sourced chemicals. These are used in everyday items including flavours, fragrances, chewing gum, paint, ink and tyres.

"Today marks a major step forward for Foresta and underlines our commitment to helping New Zealand build a more sustainable and environmentally friendly chemical and energy industry," said Henry Cheng.