BC Forest Minister Announces Changes to Forest Tenure to Encourage Investment in the Bioenergy Sector

The Minister of Forests has announced that he intends to introduce two significant changes to forest tenure to provide tenure holders incentive to harvest all the timber in a cutblock: (1) receiving licenses and (2) stand-as-a-whole pricing.

The new receiving licenses would give alternative (bioenergy) producers an annual allowable cut that could be transferred to a tenure holder to harvest low-grade timber, including beetle-killed wood, for chipping and to be used as feedstock. The purpose is to force full utilization of the cut, not to increase it. The stand-as-a-whole pricing model would allow tenures holders to pay a flat price for their harvesting rights on an area basis, rather than per cubic metre, reducing administrative costs for industry and government in scaling logs and calculating stumpage.

The changes are meant to encourage investment and "stability" in the bioenergy sector and, assist in getting forestry workers back to work. In an article published today, the Minister was reported as saying "Biomass producers need to have some leverage. This is a strategy that will not only benefit new players...but it also supports the primary sector by maximizing capacity of the pine beetle volumes."

The changes are are expected to come in the next couple of weeks, followed by BC Hydro's phase two call later this year and will require:

• approvals from the U.S. under the Softwood Lumber Agreement;
• details on who will be eligible for receiving licenses and how they will be distributed and, associated costs; and,