Greens MPs Lee Rhiannon (NSW)

Sue Pennicuik (Vic) and Deb Foskey (ACT)

c/- NSW Parliament House

Macquarie Street SYDNEY 2000

2 September 2008



Mr Peter Mitchell,
General Manager

South East Fibre Exports Pty Ltd (SEFE)

PO Box 189, Eden NSW 2551, Australia.



Dear Mr Mitchell


Costs of greenhouse gas emissions released by Eden Chipmill Logging


Thank you for the opportunity to meet with you and visit the Eden Chipmill today. We appreciate the extensive briefing provided by yourself and Peter Rutherford.


As we raised with you in our discussions we have deep concerns about the impact logging native forests in NSW and Victoria, to supply wood to your chipmill, has for both the environment and climate change.


Attached you will find an invoice for $181,146,800 which we believe is payable for the costs of carbon pollution generated as a result of this logging during 2006/2007.


The basis of these calculations is set out below. You will see that in fact that the $181 million estimate is a conservative figure using an Emissions Trading Scheme based on $10 per tonne of carbon dioxide. Using Sir Nicholas Stern $107 per tonne of carbon dioxide figure set out in his report to the British government this invoice would rise to $1.9 billion.


Basis of calculations

As a result of the release of the “Green Carbon” (Mackey et al) report this month, we are now in a position to make a reasonably accurate calculation of the carbon dioxide released as a result of logging for your mill.


According to Mackey, the average carbon capacity for all the South East Australian eucalypt forests is 640 tonnes per hectare.  In those forests in our region where the actual carbon stored is currently less than the carrying capacity, this is entirely due to the previous operations of the Eden chipmill over the past 40 years, so we believe it is valid to use Mackey’s figure.


We understand that in the Eden RFA region the carbon carrying capacity is considerably higher than the national average, but for the exact figure we await further research.


Logging related emissions
According to information obtained through FOI processes, in 2006-07 Forests NSW logged 14,388 hectares in the Eden, South Coast/Southern and Tumut areas.


The figures below do not include the emissions from running the mill, and transport associated with logging contractors and deliveries to the mill. One estimate puts the emissions from logging trucks (14.5 million truck kms per year) at a further 2 million tonnes.



Our calculation is based on: Area logged  x  Carbon stock per ha  x  40% (loss from logging) x  3.666 (converting carbon to CO2).



For NSW:

14,388 x 640[1] x .4[2] x 3.666[3] = 13,503,080 tonnes of CO2

For East Gippsland:

4,500[4] x 700[5] x  .4 x 3.666  =  4,611,600 tonnes of CO2


Pricing carbon costs

·        Nicholas Stern calculated a price for carbon of $A107 per tonne.

·        Australia has not yet set a price for carbon. The Federal Green Paper, Carbon Pollution Reduction Scheme (2008), canvasses an auction based pricing system for permits and media speculation puts a likely price at between $10 and $20 per tonne of CO2.

·        The European price is currently between €20 (A$33) and €27 ($45), say $40.


We contend that the use of any of these prices is defensible.





Tonnes CO2





Australian ETS $10




















We use 2007 figures because in that year both Labor and Coalition adopted a policy of having a carbon trading scheme.


This invoice, for carbon pollution created as a result of just one year of the Eden chipmill's operation, is substantial and highlights the enormous impact that logging of our native forests has for our environment.


The Greens will continue to work with the community to end the logging of native forests so as to limit future environmental and economic damage caused by these operations. This work will include lobbying for a restructuring package for the woodchip industry that would include retraining and


Yours sincerely,




NSW Greens MLC Lee Rhiannon

Victorian Greens MLC Sue Pennicuik

ACT MLA Deb Foskey


[1] “Green Carbon – the role of natural forests in carbon storage” ANU Epress 2008. B. Mackey, H. Keith, S. Berry, D. Lindenmayer: 28. This figure is the South East Australian average. We understand that the actual figure for Eden region forests is considerably higher, but for the present purposes we propose to use 640 tonnes/ha.

[2] 40% of the carbon stored in a forest is lost to the atmosphere when it is logged, even after 150 years.

[3] The weight of a carbon dioxide molecule is 3.666 times the weight of a carbon atom.

[4] Approx hectares logged in East Gippsland in 2007.

[5] Mackey: 47