Australia’s Transition from Native Forests to Plantations: The Implications for Woodchips, Pulpmills, Tax Breaks and Climate Change

Judith Ajani[1]

Table of Contents

The plantation wood surge
Wood processing
Sawn timber and wood-based panels
Pulp and paper
Unprocessed wood exports
Australia’s current forest policy issues
Federal Government disengagement
Managed investment schemes, tax deductibility and future plantation wood supply
Climate change
Concluding comments


Deforestation and the degradation of native forests account for an estimated 20 per cent of Australia’s annual net greenhouse-gas emissions. Most of the degradation occurs via chip exports, with the plantation sector having captured 80 per cent of wood processing in Australia. Being perfect substitutes for native forest chips, Australia’s maturing hardwood plantations present a major opportunity for mitigating climate change. But this opportunity will not be realised with ‘business as usual’ forest-policy frames and policy information, which are steering Australia to perverse outcomes favouring investment in an inferior sequestration strategy (plantations) and handicapping the economically superior plantation-processing industry. A major review of the Australian forestry industry in the context of climate change is needed.

[1] Fenner School of Environment and Society, The Australian National University, I would like to thank Sandy Berry, Margaret Blakers, Naomi Edwards, John Kerin and Gordon MacAulay for their comments on an earlier version of this paper; and Brendan Mackey, Heather Keith and two anonymous referees for their comments. The views presented in this paper are not necessarily theirs and any errors are mine.