Co-funding regional wood biomass aggregation facilities

How the initiative will work

New Zealand has a significant untapped fuel supply in wood, with around 8 million green tonnes per year of wood biomass that could be available. This material could be sustainably diverted to wood energy, creating new economic opportunities and helping diversify our energy system while we reduce our emissions.

To support investment in the supply of biomass, EECA is providing co-funding support capped at 30% of the total capital cost (excluding land and other ineligible costs) for projects establishing facilities that collect biomass from multiple commercial forestry sources. These facilities may store biomass for a period of time as well as potentially undertaking minor processing such as sorting, chipping, hogging, screening, and drying.

This is an open request for proposals, with applications to be assessed against criteria of project benefits, deliverability, and value for money.

Who should apply

We are seeking applications that meet the following criteria:

• Projects that establish a wood biomass aggregation facility primarily for the purpose of supporting wood energy demand.
• The facility must be available for multiple parties to deposit wood biomass
• The facility is for wood biomass derived from commercial plantation forestry of pinus radiata, douglas fir, and/or eucalyptus.
• Final products leaving the facility would be seasoned logs, seasoned binwood, hog fuel, and/or wood chip.
• Outlets for the product leaving the facility could be direct to a process heat end user or to a wood energy manufacturing facility (e.g. white wood pellets, torrefied or steam-exploded wood fuels, or other biofuels). 
• Projects must have a minimum size of at least one hectare and 5,000 tonnes storage potential. 
• Projects need to be investment ready with cost components detailed to an accuracy of +/-30%.
• Projects must have planned commissioning dates before 30 June 2027. 

EECA will not consider funding more than one facility for an organisation. 

Projects will be excluded if:

• Wood biomass isn’t from commercial plantation forestry (e.g. natives, agricultural wastes, construction waste).
• Facilities that are not available for multiple parties to deposit wood biomass into.

Benefits to New Zealand’s energy system

Strategically located facilities where forestry can aggregate and store biomass will support greater recovery of wood fibre from harvest operations, including from small wood-lot owners, increasing overall biomass supply. Further, storing biomass for a period of time allows the biomass to dry, reducing processing costs and enhancing energy content.

A network of facilities will ultimately deliver lower costs and greater security of supply for bioenergy users as fuel storage will be less concentrated. They will provide resilience in supply chains by providing a storage buffer to manage fluctuations in supply and demand, as well as by providing decentralised sources of wood energy protecting against potential single points of failure in site or transport networks.  

Expanding wood energy has the potential to cut waste and slash-related environmental impacts, lower fossil fuel use, create jobs, and strengthen New Zealand’s energy security.