25 July 2013

Media Statement

PGP funding for forestry biofuel programme

Science and Innovation Minister Steven Joyce and Primary Industries Minister Nathan Guy today welcomed the announcement of Primary Growth Partnership funding of $6.75 million to investigate producing biofuels from forestry waste.

The ‘Stump to Pump’ Primary Growth Partnership (PGP) programme partners are Norske Skog, Z Energy and the Government. The Government will match their funding of $6.75 million to bring the project’s total funding to $13.5 million.

“This is an exciting announcement as this partnership between the Government and industry has the potential to make an important economic and environmental contribution to New Zealand,” Mr Joyce says.

"If the technology can be proven and commercialised, the economic benefit for New Zealand over the next 20–25 years is estimated at an annual increase in GDP of up to $1 billion and the creation of 1,200 direct jobs in regional economies.”

“The Stump to Pump programme has obvious sustainability and environmental benefits. Local production of biofuels from forestry waste could be a game-changer for New Zealand and could also reduce the industry’s dependency on imported fuel,” Mr Guy says.

“Since the PGP was launched three years ago, 16 exciting innovative projects are underway. While the programmes are long-term initiatives, progress is evident, including:

· a new tree harvesting machine that can fell and bunch logs on steep slopes and remove the need for chainsaw operator, resulting in a 26% increase in productivity, now being in commercial use.

· 2000 farms are implementing the Dairy Value Chain programme’s Whole Farm Assessment approach, resulting in an estimated economic benefit of $50,000 per farm per year.

· In the 2011–12 production season, farms in the Farm IQ programme recorded an average decrease in production costs of 12%, with an average increase in production of 10% leading to a gross farm income increase of $214 per hectare.

· grass-fed wagyu processed as part of the Marbled Grass-fed Beef programme returned and extra $1 per kg, above the schedule price for Prime Steer.

“These investments in productivity will play a big part in achieving the Government’s goal of doubling primary exports by 2025,” says Mr Guy.

“Science and innovation are key drivers of international competitiveness, job creation and economic growth – particularly for our regional economies,” Mr Joyce says.

“This investment will provide a significant boost for both Kawerau and the Eastern Bay of Plenty and is an opportunity to develop its natural resources and assets, allowing for job creation and growth."

Robust governance, monitoring and assurance processes are in place to ensure that public funding is used appropriately to help drive commercial innovation and productivity in the primary sectors.

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