Wood Fuel: The Key To Preventing New Zealand’s De-Industrialisation

New Zealand is facing a pivotal moment. Rising energy costs, tightening emissions requirements, and volatile global fuel markets are placing unprecedented pressure on the country’s industrial base.

The Bioenergy Association says that “the recent announcement of the Wattie’s processing line closure and McCain’s in Hawke’s Bay is the clearest signal yet: without affordable, reliable, low-carbon heat, New Zealand risks losing the industries that underpin regional economies.

Wood fuel—produced from domestic forestry residues and low value logs—offers a low-cost practical, scalable, and immediately available solution to halt this slide.”

A Domestic Energy Source That Keeps Industry in New Zealand

Doug Davidson, a Director of the Bioenergy Association said that “The Wattie’s and McCain’s decision highlighted a structural vulnerability: New Zealand manufacturers are competing against countries with lower and more stable energy costs. When energy becomes unpredictable or uncompetitive, production shifts offshore.”

Wood fuel directly addresses this by providing:

• Stable, predictable pricing starting at $10/GJ insulated from global LNG ($40-$80/GJ) and Middle east volatility
• Local supply chains that keep value and jobs in regional communities
• Energy sovereignty, reducing reliance on imported fossil fuels

For processors, manufacturers, and exporters, energy stability is not optional. It is the difference between expansion and exit.

Proven in New Zealand’s Most Critical Infrastructure: Hospitals

Mr Davidson said that “One of the strongest signals of wood fuel’s reliability is its adoption in New Zealand hospitals, where uninterrupted heat and steam are essential for sterilisation, laundry, heating, and clinical operations. Hospitals do not take risks with energy supply.

• The technology is safe, proven, and dependable
• Supply chains are mature and resilient
• Performance is consistent enough for 24/7 critical services

If wood fuel is trusted to keep hospitals running, it is more than capable of powering New Zealand’s industrial sector.”

A Proven, low cost, low-carbon replacement for fossil fuels

Wood fuel is already widely used across the globe. In New Zealand, it can replace coal and gas in most applications with:

• Up to 90% emissions reduction
• Low-cost wood fuel starting at $10/GJ Net in some cases, or chipped low value export logs, at $17/GJ, are equivalent to 7.1c/kWh through an electric boiler
• Immediate availability, 24x7 dispatchability at commercial scale

This is not experimental technology. It is low cost, bankable energy source that aligns with New Zealand’s climate commitments while keeping industry competitive.

A Strategic Opportunity for Regional Growth

New Zealand’s forestry sector produces millions of tonnes of residues and logs every year—much of it currently under-utilised. Converting this material into wood fuel:

• Creates new regional jobs in harvesting, processing, transport, and energy supply
• Supports higher-value forestry pathways beyond raw low value log exports. Reduces the number of logging trucks on our roads
• Strengthens regional manufacturing.
• Produces “made in NZ” fuel which may otherwise be exported in the form of logs.

Wood fuel is a circular, renewable industry that turns a low-value by-product of forestry and wood processing into a high-value national asset.

A Call for Strategic Alignment

The Wattie’s and McCain’s closure is not an isolated event. It is a warning. If New Zealand wants to retain its industrial capability, protect regional employment, and build a resilient low-carbon economy, wood fuel must be recognised as a strategic energy priority.

Invest in domestic renewable heat or accept the slow erosion of New Zealand’s industrial base.

Wood fuel gives New Zealand a pathway to remain a country that makes things—not just imports them.

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