Revenue from residue

The use of wood residue for energy is growing, so it can represent a valuable revenue stream to those who produce it as a by-product of other operations.

In the 1990s, there was little harvesting of wood residue. But this rose to around 50,000 tonnes per annum by the year 2000 and now over 250,000 tonnes per annum is harvested. This figure still only represents a small proportion of the total residue available. Potentially as much as 1.9 million tonnes per annum could be harvested.

Value

Forest residue is currently sold for up to $10 per tonne (including processing and delivery costs) in some forests. However, with increasing demand for sustainable fuels and the potential for the cost of competing fuels to increase, the value of residue could rise.

Based on this, wood residue could represent a significant revenue stream for businesses. For example, for a forest harvesting 100,000 tonnes per annum, the volume of residue could be up to 6,000 tonnes on log landings and 14,000 tonnes within the in-forest cutover. If just the log landing residue is harvested and sold at $10 per tonne, the extra revenue generated could be up to $60,000 per annum.

The calculators and information in our resource centre can determine the potential value of wood residue in your specific circumstances.  An example of the potential value that might be derived from wood residue is presented below.

This example assumes the material is harvested and sold fresh and 1 tonne = ~1m3 and is from a site with flat to rolling terrain (ground based logging) and a total recoverable volume (TRV) of 500m3 per ha:

  • Log landing residue = 4% of TRV = 20m3 per ha
  • In-forest cutover residue = 50m3 per ha recoverableTotal = 70m3 per hectare $5m3 $10m3 $20m3Log landing residue$100 per ha$200 per ha$400 per
  • Total = 70m3 per hectare 
Residue$5m3$10m3$20m3
 Log landing residue $100 per ha  $200 per ha   $400 per ha
 In-forest cutover residue $250 per ha $500 per ha  $1000 per ha 
All residue  $350 per ha  $700 per ha  $1400 per ha 

Potential users

Currently, the main user of wood residue for energy is the wood processing industry. However, there is potential for other businesses like dairy factories, cement works, meat works, food processing plants, and commercial heat plants (e.g. hotels) to use residue as fuel in some locations. Electricity generation plants can also use residue by co-firing wood residue with other fuel types such as coal.

Harvest considerations

A variety of factors impact on the volume and value of wood residue harvested. Use the calculators and tools in our Resource Centre to account for your specific circumstances.

Crop type

Open grown crops with significant stem malformation will produce relatively high volumes of residue. A high quality crop, with well formed stems and suppressed branching will produce low volumes of residue.

Log making system type

The volume and individual piece size of residue is influenced by the type of log making system being used. Computer optimised log making tends to produce longer sections and mechanised operations produce more pieces than motor manual operations. The separation of different residue types can also be important as stem, bark and branch material all have different handling characteristics.

Residue location

Wood residue on log landings is more cost effective to harvest than in-forest cutover residue. Of the in-forest cutover residue, collection of ground-based residue by forwarders or bundlers may become viable if the value of wood residue increases, but the collection of residue from steep hauler country is not practical and is more expensive again. The cost of harvesting wood residue also varies widely between regions.

Site access 

Planning is required to allow on-highway trucks and/or low-loaders to access wood residue piles. This access may be required for periods of up to 12 months after the completion of harvesting operations.

Storage facilities

Wood residue may be stored on-site or moved to an alternative location. On-site storage on dry, open ground can result in reduced moisture content, minimal dry matter losses and reduced transportation costs.