Chilean forestry and paper company CMPC SA CAR.SN plans to invest around $340 million in 2008, and will scale back investment in coming years due to energy shortages, according to a Reuters report.

“We are coming down from an average of more than $500 million (in annual investment) because we are coming out of a period of high investment,” CMPC Chairman Eliodoro Matte said after a recent shareholders’ meeting. Chile is among the world’s five largest wood pulp exporters and CMPC is the nation’s No. 2 pulp exporter after Copec COP.SN.

Catalyst Paper plans to cut employee numbers at its two largest mills in British Columbia, Canada, as it tries to cope with rising input costs and a relentless fibre shortage made worse by recent sawmill closures.

At Elk Falls mill in Campbell River, reductions will affect approximately 145 hourly and staff employees as the #1 paper machine, which was curtailed last September, is indefinitely idled. At the Crofton mill in North Cowichan, approximately 82 positions will be reduced as the operation takes steps to bring its overall cost structure closer to best-quartile performance.

Richard Garneau, president and CEO: “The Elk Falls mill has been most affected by fibre and market dynamics to date. With the permanent closure of the TimberWest and other sawmills taking curtailment, the potential to restart #1 paper machine in the foreseeable future has disappeared. “We appreciate this is not welcome news for employees or the community, however, we need to make the best possible use of available fibre supply to support our most profitable business.”

Estimated costs of putting the measures in place is not expected to exceed $4 million and will likely be offset by manpower efficiency savings as the company continues to focus on achieving a best quartile labour cost benchmark of $80/t. “We have talked openly and often with employees about the pressures on the business, what it will take for Catalyst mills to be low-cost producers, and the steps the company must take to become profitable in a brutally competitive market,” Garneau said. “It is clear that cost improvements on all fronts will be needed in order to stabilise and strengthen the future of our operations.” Catalyst noted that the major industry tax rate paid by the company’s coastal mills is significantly greater than elsewhere in North America and remains a major hurdle to its competitiveness. “We appreciate the province has reduced the school tax component of our bill which will save us about $2 million over the next two years on a total 2007 property tax bill of $32 million. However, it will take a reduction ten times greater than that to bring our BC mills in line with the municipal property taxes paid by industry elsewhere in North America.”

Pöyry has been awarded implementation engineering services contracts by Stora Enso Oyj for combined heat and power plant projects in Belgium and Germany.

The value of the contracts is over €3 million. Stora Enso is improving energy efficiency through investments totalling EUR 260 million at the Langerbrugge mill in Belgium and the Maxau mill in Germany. At both mills a new multifuel circulating fluidised bed boiler, a steam turbine, new fuel handling systems and auxiliary systems will be installed.

The aim of the investments is to enable combined heat and power generation with a competitive fuel mix. Once completed, these installations will increase the self-sufficiency in electricity of the two mills. Both projects are scheduled to be completed in 2010. Pöyry’s contracts cover implementation engineering services for the new power plants. The assignments support Pöyry’s position as a preferred provider of comprehensive engineering and project services to both forest and energy industries.

Energy is critical to all development efforts across the globe. The absence of reliable energy supply could hamper development efforts, especially for struggling Third World economies. The link between energy and development constitutes the focus of an African Development Bank Group study – Gender, Poverty and Environmental Indicators on African Countries – released in Maputo, Mozambique, within the framework of the 2008 African Development Bank (AfDB) Group Annual Meetings.

Energy, the study says, is critical to improving the well-being of the poor, who need it for cooking, lighting, the production of goods and services, heating, water, and transportation. Access to energy affects quality of life as it contributes to better public services such as health care and education, as well as improving possibilities for income generation and employment, the study underscores.

The study emphasises that energy services can protect the local and global environment by helping curb deforestation and reducing greenhouse gas emissions. Energy’s crucial role in enabling development makes for the provision of adequate, affordable and reliable energy services necessary to the achievement of the Millennium Development Goals (MDGs). Simply improving access to energy is not sufficient, however, because energy is not an end in itself, but only a means to an end.

The development of sustainable energy systems must be integrated into larger development programs. Providing sustainable energy options ranks high on the international agenda, particularly energy derived from renewable sources and cleaner applications of fossil-based fuels. This was the case at the World Summit on Sustainable Development in Johannesburg in 2002 and this was reinforced in 2004 at the Bonn International Conference on Renewables in Germany and the World Summit on Energy for Development in The Netherlands. During the Bonn Conference, several African governments, institutes, and organisations committed themselves to the introduction of renewable energy or a more efficient use of energy. Although the largest number of energy-related commitments as pledged in Bonn originate in Europe (44%), Africa is still the second largest initiator with 20%. More than 580 million people in Africa – two-thirds of the continent’s population – do not have access to electricity, especially in rural areas where electrification rates might be as low as 2%.

On average, 92% of the continent’s rural population lives without electricity. The absence of regular and clean energy is considered to be the root cause of many health and environmental risks. In Sub-Saharan Africa, air pollution from wood fuels in inefficient stoves or open fires is responsible for 1,100 respiratory tract-related deaths per day, especially among women and children. Women and children are the primary users of household energy and they bear the burden associated with issues of access to reliable energy.

Improving energy services for the poor will significantly improve the living conditions of women and children. Increasing dependence on fuel imports and the high and volatile price of fuel threatens the security of national energy supplies and drains foreign exchange reserves of African countries.

Fortunately, Africa is endowed with vast unexploited renewable energy resources, including solar energy, wind energy, hydropower, biomass energy and geothermal energy. Poverty can be conceptualised in different ways, including economic (a personal income of less than $1/day) and social (lack of access to adequate levels of food, water, clothing, shelter, sanitation, healthcare, education, etc). Energy poverty can be defined as the absence of choice in procuring adequate, affordable, reliable, high-quality, safe and environmentally-benign energy services to support economic and human development.

Most poor people, particularly in Sub-Saharan African rely on biomass energy as the main source of basic energy services. In many areas, an increasing shortage of biomass energy adds to the burden of women who are generally responsible for collection of wood fuel. Although researchers, practitioners and international organisations have repeatedly raised the issue, the link between energy poverty is typically overlooked in energy planning. This can be attributed to the invisibility of the issue. Biomass energy, in most cases, is collected at zero monetary cost and it falls outside national energy statistics and energy balances.

The use of biomass energy by poor people is often a choice made from a narrow range of options. Limited cash prevents poor households from purchasing fuel-efficient appliances, resulting in higher energy consumption than that of less poor households.
Energy-efficient stoves that use less wood and reduce associated collecting time are not generally available to poor people, leaving them with energy-inefficient, smoke-generating open fires and stoves and adding a health hazard to the burden of collecting fuel. Being forced to opt for lower first-cost options instead of lower life-cycle cost resulting in using precious cash on low-quality fuels, which are then used at low efficiency, reducing the family’s ability to accumulate the financial resources needed to invest in strategies to improve their livelihoods. This vicious cycle of energy poverty needs to be broken. http://www.afdb.org/

A unique worldwide tree planting initiative, aimed at empowering citizens to corporations and people up to presidents to embrace the climate change challenge, has now set its sights on planting 7 billion trees. It follows the news that the Billion Tree Campaign has in just 18 months catalyzed the planting of 2 billion trees, double its original target. The campaign, spearheaded by the UN Environment Programme (UNEP) and the World Agroforestry Centre (ICRAF), was unveiled in 2006 as one response to the threat but also the opportunities of global warming, as well as to the wider sustainability challenges from water supplies to biodiversity loss.

To date the initiative, which is under the patronage of Nobel Peace Prize Laureate and Kenyan Green Belt Movement founder Professor Wangari Maathai and His Serene Highness Prince Albert II of Monaco, has broken every target set and has catalysed tree planting in close to 155 countries. Achim Steiner, UN Under-Secretary-General and UNEP Executive Director, said: “When the Billion Tree Campaign was launched at the Climate Convention meeting in Nairobi in 2006, no one could have imagined it could have flowered so fast and so far. But it has given expression to the frustrations but also the hopes of millions of people around the world”. “Having exceeded every target that has been set for the campaign, we are now calling on individuals, communities, business and industry, civil society organizations and governments to evolve this initiative onto a new and even higher level by the crucial climate change conference in Copenhagen in late 2009,” he said. “In 2006 we wondered if a billion tree target was too ambitious; it was not. The goal of 2 billion trees has also proven to be an underestimate. The goal of planting 7 billion trees – equivalent to just over a tree per person alive on the planet – must therefore also be do-able given the campaign’s extraordinary track record and the self-evident worldwide support,” he added. The Billion Tree Campaign has become a practical expression of private and public concern over global warming. Heads of State including the presidents of Indonesia, the Maldives, Mexico, Turkey and Turkmenistan as well as businesses; cities; faith, youth and community groups have enthusiastically taken part. Individuals have accounted for over half of all participants.

• In a single day in Uttar Pradesh, India, 10.5 million trees were planted
• 35 million young people in Turkey have been mobilised to plant trees
• 500,000 schoolchildren in sub-Saharan Africa and the UK have become engaged.

It has also attracted the support of multilateral organizations including the Convention on Biological Diversity whose new Green Wave initiative was launched in advance of its important conference being held in Bonn, Germany later this month, and which supports the Billion, now Seven Billion, Tree Campaign. Tree planting remains one of the most cost-effective ways to address climate change. Trees and forests play a vital role in regulating the climate since they absorb carbon dioxide – containing an estimated 50% more carbon than the atmosphere. Deforestation, in turn, accounts for over 20% of the carbon dioxide humans generate, rivaling the emissions from other sources. Trees also play a crucial role in providing a range of products and services to rural and urban populations, including food, timber, fibre, medicines and energy as well as soil fertility, water and biodiversity conservation. “The Billion Tree Campaign has not only helped to mobilize millions of people to respond to the challenges of climate change, it has also opened the door, especially for the rural poor, to benefit from the valuable products and services the trees provide,” said Dennis Garrity, Director General of the Nairobi-based World Agroforestry Centre. “Smallholder farmers could also benefit from the rapidly growing global carbon market by planting and nurturing trees,” he said. The two billionth tree was put into the ground as part of an agroforestry project carried out by the UN’s World Food Programme (WFP). It now planted 60 million trees in 35 countries to improve food security. This news comes as the United Nations calls for resolute action to end the global food crisis which affects an estimated 73 million people in 80 countries around the world. In announcing the agency’s contribution to the Billion Tree Campaign, WFP Executive Director Josette Sheeran said: “WFP is concerned about rising costs of food and fuel which inevitably hit the ‘bottom billion’ hardest. More people will require WFP assistance at a time when WFP’s current programmes are reaching fewer due to the critical funding gap created by rising costs.” In terms of geographic distribution, Africa is the leading region with over half of all tree plantings. Regional and national governments organised the most massive plantings, with Ethiopia leading the count at 700 million, followed by Turkey (400 million), Mexico (250 million), and Kenya (100 million). The campaign has also generated significant appeal in post-conflict and post-disaster environments. In acting upon the words of the campaign’s patron Wangari Maathai “when we plant trees, we plant the seeds of peace and seeds of hope,” communities in Afghanistan, Bosnia-Herzegovina, Iraq, Liberia and Somalia contributed to the global effort with over 2 million trees. Furthermore, mangrove plantings were organised by Planète Urgence in Banda Aceh and other Indonesian provinces recovering from the December 2004 Indian Ocean Tsunami, while Replant New Orleans initiative in the United States sponsored a planting of fruit-bearing trees to breathe new life into a community struggling in the aftermath of the 2005 Hurricane Katrina. The private sector pitched in as well, accounting for almost 6% of all trees planted. Multinational corporations including Bayer, Toyota, Yves Rocher, Accor Group of Hotels and Tesco Lotus supported the campaign, as did hundreds of medium and small-sized enterprises the world over. The Billion Tree Campaign has further highlighted the cultural and spiritual dimension of trees with groups as diverse as the International Olympic Committee, the World Scouting Movement, SOS Sahel Initiative or yet “Geiko and Maiko for Forests” – Japanese geishas from the hometown of the Kyoto Protocol – actively participating in the initiative. “The Billion Tree Campaign is UNEP’s call to the nearly 7 billion people sharing our planet today to take simple, positive steps to protect our climate. It is a defining issue of our era that can only be tackled through individual and collective action. I am convinced that the new target will be met ? one tree at a time,” concluded Executive Director Steiner. The Billion Tree Campaign web site with pledges, plantings and news is at www.unep.org/billiontreecampaign http://www.worldagroforestry.org/billiontreecampaign/

New Forests Pty, a specialist investment management and advisory services firm, has reached agreement on the sale of a minority equity position in the company to Generation Investment Management. Generation Investment Management is a London-headquartered fund management business dedicated to long term investment and integrated sustainability research. The link between the two companies will explore and create new opportunities in the burgeoning area of environmental markets.

“We’re excited to welcome Generation Investment Management and continue to build on New Forests growth,” David Brand, Managing Director of New Forests, said. “We feel that there is a strong alignment of values and culture between our firms and a common interest in seeing growth in the area of environmental and ecosystem-based markets.”

New Forests is an investment management and advisory services firm specialising in land-based business models that deliver returns from emerging environmental markets, such as carbon, biodiversity and water. The company is a leader in commercialising ecoproducts, such as sustainably produced timber, forest-based carbon credits, biodiversity conservation, wetlands banking and other emerging environmental markets.

“We see great opportunities for both ourselves and New Forests in this investment,” David Blood, Managing Partner of Generation Investment Management, said. “New Forests is creating substantial new IP and knowhow in this high growth area, and we are interested in supporting the success of this business model.” Blood will join the board of New Forests.

New Forests was created by David Brand in 2005. The company began as a Sydney-based asset management business supporting forestry investment in Australia and New Zealand. Today, New Forests supports three forestry funds focused on Australasian investments with exposure to environmental markets. US offices were opened in 2007 to facilitate the growth of a new eco products investment business in Washington, DC. In partnership with Equator Environmental of New York City, Washington-based New Forests Inc now jointly manages The Eco Products Fund, an investment platform focusing on carbon, biodiversity and other environmental market exposures primarily in the US.

In 2008 the San Francisco-based New Forests Advisory Inc was opened to support the development of an international advisory business. New Forests has worked with advisory clients from five continents in the past year and continues to provide leading edge advice enabling clients to engage with environmental markets.

The new equity will support the growth of these offices and business lines in addition to the company’s expansion into Asia. “We see tremendous opportunities for growth,” Brand said. “This new partnership will allow us to maintain our position in these emerging markets and continue to build out a global business.”

New Forests is a forestry investment management and advisory services firm currently managing over $150 million in forestry and environmental assets. The company’s investment thesis is unique in seeking assets that deliver returns from sustainable forestry, as well as returns from emerging environmental markets and preferences, such as certified timber, carbon, biodiversity and water. In addition to world-leading forestry investment expertise in the areas of acquisitions, modeling, operations, silviculture and ecosystem services, New Forests is at the forefront of evaluating opportunities and commercialising environmental products from emerging environmental markets. The company is headquartered in Sydney, Australia, with offices in Washington DC and San Francisco and holds an Australian Financial Services License. www.newforests.com.au

In Canada, the Alberta government has directed C$55.2 million in funding to continue pro-active action against mountain pine beetle infestations in the province. “This funding gives us the resources we need to continue our fight against this threat to our forests,” Sustainable Resource Development (SRD) Minister Ted Morton said. “The time to attack the beetle is now, when we have the greatest potential for success in managing mountain pine beetle populations.”

The allocation for pine beetle work includes C$50 million in emergency funding, plus C$5.2 million in the department’s base budget. The C$55.2 million in total funding for pine beetle will be used for control measures to remove beetle-killed and at-risk trees, and to continue surveys to detect infestations. The budget will also provide funding for control work undertaken by municipalities in affected areas. For the 2006-07 and 2007-08 fiscal years, SRD allocated C$134.3 million to mountain pine beetle actions. The ministry’s goal is to remove as many infested trees as possible before the next beetle flight this July. Each infested tree contains enough beetles to attack five to 10 more trees. Priorities are to contain infestations and minimise the spread of beetles north and south along Alberta’s Eastern Slopes and prevent their spread further eastwards in the boreal forest. At risk are 6 Mha of pine forest in Alberta – about 15% of the province’s total forest – as well as the viability of the province’s forest industry, sustainability of communities, watersheds, crucial wildlife habitat, recreational access and tourism. SRD is also implementing strategies to grow a younger, more resilient forest that will be better able to withstand wildfires and insect attacks.

CONSOL Energy’s, the largest producer of high-Btu bituminous coal in the USA, Fola Coal Co Surface Mine 6 in Bickmore, West Virginia, has been presented with the Appalachian Regional Reforestation Initiative’s Excellence in Forestry Award for 2007. The award, presented by the US Office of Surface Mining (OSM), on behalf of the Appalachian Regional Reforestation Initiative (ARRI), recognises exemplary efforts in forestry reclamation. The ARRI, an OSM initiative, is a coalition of groups, including citizens, the coal industry, and government, dedicated to restoring forests on coal mined lands in the Eastern US.

The award has been presented annually since 2005 to individuals, operators and/or organisations, and was created to acknowledge and give public recognition to those responsible for Appalachia’s most outstanding achievements in forestry reclamation and to encourage the exchange and transfer of successful reforestation technology. Fola Coal was nominated for the award by the West Virginia Department of Environmental Protection. In January, Fola Coal also won the West Virginia Foresters Association Excellence in Forestry Award. Fola Coal has planted more than four million trees on the company’s surface mine property in West Virginia through various reclamation efforts and other events. The company has previously participated in other tree planting outings and in other environmental initiatives, including projects with Ducks Unlimited and the National Wild Turkey Federation.

The forestry industry in British Columbia has been hammered over the last 12 months from all sides. As Innovatek notes in this week’s Friday Offcuts, “mill closures, job layoffs (the West Coast’s largest forestry company, Western Forest Products, just announced that it’s shutting down most of it’s logging operations next week with 800 loggers affected by the move) and of course the mountain pine beetle has knocked the industry for a six. Selling lumber from infested forests into a market already hit hard by reduced demand because of the collapse of the US housing market has been tough.” The mountain pine beetle has been the real killer though. According to new government statistics, about half of the marketable forest estate in BC (estimated to climb to a staggering 76% by 2015) has been ravaged by a nearly decade-long beetle infestation. The outbreak of mountain pine beetles has affected trees over an area of 13.5 Mha. As of last month, the insects had infested and killed about 710 million m3 of timber – up from 582 million m3 at the same time last year, according to a recent news release.

To add to the industry’s woes, a just released report says that the beetle is now transforming BC’s forests into a major source of greenhouse gases. Federal scientists say that by the time this unprecedented infestation ends, an extra 1,000 Mt of carbon dioxide will have been released into the atmosphere. The report’s lead author says this is five times the annual emissions from all the cars, trucks, trains and planes in Canada. After “the beetle has eaten itself out of house and home” in BC the authors have suggested that given favourable conditions in future, such as the mild winters now being experienced, the beetle could well spread across Canada’s vast northern boreal forest, one of the most important stores of carbon on the planet.

Skogsnolia – one of Sweden’s most important industry trade fairs – is strengthening its collaboration with the trade association, MaskinLeverantörerna Forestry Section, for the supply of mobile machines.

“We have long wanted the timing of the different trade fairs in Sweden to result in a fair every other year,” said Björn Bäckström, MaskinLeverantörerna’s CEO. “Nolia has listened to us, and now Skogsnolia will be held in 2008 and then in 2011. Then those of us from MaskinLeverantörerna’s Forestry Section will be taking part in a trade fair in Sweden every other year.

Elmia Wood and Skogsnolia are the trade fairs we’re focusing on.” Margaretha Lundqvist, Nolia AB CEO: “We have to listen to the industry, and we see this as a challenge. We think this will help Skogsnolia become bigger and allow it to showcase more new products. “But we also see it as an opportunity to focus on other areas of the forestry industry in the even numbered years when Skogsnolia will now not be taking place. “This year’s booths sites at Skogsnolia – one of Sweden’s most important industry trade fairs – are nearly fully booked. There has been great interest in the fair and a big influx of registrations from exhibitors, indicating the optimism found in the forestry industry.” Interest from exhibitors is huge, as are expectations of this year’s trade fair, according to Skogsnolia’s Project Manager Kristin Olsson, who said she was also happy about a number of new exhibitors for this year’s fair. One of these many newcomers is OP Industrier from Karlstad, a sales company for Höglunds Flak and OP Smedab, which is very optimistic about its participation in the fair: “We and our sister company OP System are looking forward to exhibiting at the fair, which is said to attract lots of forestry people from northern Sweden,” said the company’s CEO, Sven-Åke Kvaldén. Many more exhibitors can be found on Skogsnolia’s website www.nolia.se/skogs Ever since it began in 1984, Skogsnolia has been one of the most important forestry trade fairs in Sweden with around 200 exhibitors and 12,000 visitors. The 2008 fair will be from 12-14 June in Hörnefors, 30 km south of Umea.