Pine trees and petroleum

Pine trees are the source of much debate in the New Zealand rural sector but they have the potential to supplant the oil industry. By Nicola Dennis.

In Business15 Minutes

Pine trees are the source of much debate in the New Zealand rural sector but they have the potential to supplant the oil industry. By Nicola Dennis.

Petroleum (a.k.a. crude oil) comes from plants and organisms that died millions of years ago. It is used to create a dizzying array of products. Fuels, solvents, plastics, fabrics, electronics and even food additives call petroleum their daddy.

This month, I sat down with the NZ Bio Forestry company employees to hear about their plans to cut out the million-year middleman when it comes to turning trees into these products.

“Give us enough time and we will be able to make everything that is currently petroleum based out of pine trees,” Kai Hsuan Lin says. He’s beaming in from his home in Taiwan to explain the chemistry to me, along with Wayne Mulligan in New Zealand and Dr Yin Fah Kam in Singapore.

The biographies of these people are nothing short of intimidating – these are very serious businessmen and scientists. But they ask me to call them Wayne, Kai and YF which is the first clue that I am dealing with a Kiwi business. The second clue is the extensive discussion of the Maori values that drive the business.

This is a global Maori business that is out to achieve very big things. We will get to that in a moment, but first we need to burn through some background information.

The history of petroleum

Petroleum has been used in its raw form since ancient times, but it wasn’t until the mid-1800s when it started being refined into more sophisticated products, most notably kerosene for lamps.

In today’s language kerosene lamps were the new and improved ethical option for the Victorian-era consumer. No longer would they need to burden themselves with the guilt of the whaling industry to secure their lighting needs. However, historical advertisements suggest that the main selling points of the new “coal oil” lamps were how many “candle’s worth” of “smokeless” light they produced.

It took a long time and a lot of development for petroleum-based products to become the cheapest option. Especially in New Zealand, which was still ripping whales out of the sea until 1964.

I’m telling you all this because we need to remember that developments take time to get cheap enough to compete with their predecessors. When it comes to making petrochemicals from pine trees, it is the business development, rather than the science, that is the main issue.

Turning pine trees into petrochemicals

Wood has three main components. There is the cellulose and hemicellulose which are types of complex sugars/carbohydrates and there is the lignin which is a polymer that holds it all together.

You might better recognise cellulose as paper or cellophane. Rayon/viscose fabric is also made from cellulose. So, the idea of turning wood (or more specifically waste wood such as sawdust) into shiny things is not that new.

In many cases, it’s not that complicated. I found a science paper (Xia et al. 2021) that listed a three-stage recipe for wood-derived plastic. (See right).

“This is not new technology,” explains Wayne, “but it will be new to NZ.”

NZ Bio Forestry are planning on a slightly more technical route for the new NZ wood refining industry.

They are planning to break the waste wood into its sugar components and then ferment that sugar into chemicals and materials. It will be the same methods that other countries use to make corn and beet into bioethanol and other biochemicals.

NZ Bio Forestry has validated the process on 42 tonnes of pinus radiata in Malaysia and Taiwan and are getting ready to scale the process up.

The great New Zealand pine problemTo outsiders, the fuss about pine trees seems trivial. After all, who doesn’t love trees? Especially now we know about the extra talents our leafy friends have been hiding from us. Despite the wood enthusiasm going on above, I think the crew at NZ Bio Forestry would find a lot of common ground with the belaboured sheep farmers being squeezed out by pines.

Both recognise NZ has a pine problem. Kiwis are world leaders in producing pinus radiata. The temperate climate of our disease-free piece of paradise suits Pinus Radiata (which, like the brushtail possum, is a threatened species in its homeland). Plus, NZ has put the hard yards into breeding good pine genetics. But we fall short when it comes to making products with pine.

Most of the harvested pine (60%) leaves the country as logs bound for China or South Korea. Why blanket the land with pines just to ride the boom-and-bust cycle of the Asian commodity log market? Why not put a little more thought into things and get more value out of fewer pines?

How about switching it up so that the pine tree is not simply appeasing the guilt of the fossil fuel industry via carbon credits, but creating sustainable alternatives to their products?

Wayne asserts that to change the value of the NZ forestry estate and to create greater benefits for NZers, it is critical to change to higher valued markets. The markets NZ Bio Forestry are targeting are high value decorative wood engineered products, biochemicals and biomaterials. All individually valued much higher than carting whole logs out of the country.

NZ Bio Forestry says making the switch will strengthen rural communities and increase the pool of money available for further investment in research and innovation.

The company’s strategy

The Tri-national team at NZ Bio Forestry is planning on producing high-end wood products. Decorative plywood is part of the plan, but also wood engineering. If you want a nice rabbit hole to go down, google “programmable wood” or “4D printed wood”. The shortest explanation I can offer is that it is wood that is engineered to bend and fold itself. Think self-assembling flat pack furniture and the like.

The waste wood left over will be turned into “green chemicals”. The first cab off the rank is the solvent used to etch semiconductors (the tiny microchips that are ubiquitous in modern electrical goods).

Japan and Germany have cornered the market with a petrochemical-derived product, but an identical product can be made using NZ pine tree waste. NZ has the rare advantage of being both a strong supply of underutilised trees and having a good reputation for calling a spade a spade.

If the NZ authorities say that product is a biodegradable solvent made from pine trees,

customers can rest easy knowing they aren’t being duped. Also, as opposed to many other places, NZ has some room to move when it comes to manufacturing space and electricity use, given that barely any manufacturing takes place here.

In time, other products can be added into the mix depending on which companies want to collaborate. For example, plastic extrusion equipment is relatively inexpensive ($100k to $200k in capital costs), local producers may wish to buy them to make packaging or consumables from the local pine-derived plastic. During our meeting YF pitched the idea of biodegradable plastic toys. As a mother who stands on Lego on a daily basis, the idea of burying toys in the garden holds some appeal.

Where to from here?

The next step is a large ($3-5 billion over more than a decade) capital raise. Wayne says there is some $50 trillion of Green Investment and ESG (Environmental Social and Governance) funds that can be attracted to create new precision wood manufacturing and bio-refining in NZ. Also, there are many global companies seeking alternatives to traditionally petroleum-based products, be they packaging, carbon fibre, energy, or biofuels.

The plan is to start the construction of the first commercial plant. This prototype is now planned for Taiwan because legal processes and bureaucracy is holding things up in NZ. It has been years of legal stuff just to try to rezone some land in Marton from “rural” to “industrial” so they can build a bio-facility.

But this is where the strength of the other nations comes into play. Taiwan is strong in innovation and new product development. It is a good place to get prototypes up and running in the high-value electronics and material markets. Meanwhile, Singapore is an excellent place to raise funds, conduct research and work through intellectual property protection.

Once that is done, the plan is to licence modular and scalable wood processing plants, both wood engineering and bio-refining here in NZ. They believe there could be up to 12 facilities located throughout the country turning pine into the high-value products.

The business model is to be a technology platform assisting NZ and global companies that want to get the most out of pine trees and secure their supply of non-fossil products, rather than NZ Bio Forestry operating the facilities themselves. The Netflix of pine, so to speak. Therefore, they will be looking for local collaborators.

People of the land unite

It would be remiss of me not to mention the Maori values that underpin this business because it is clearly a big part of what makes NZ Bio Forestry tick. If these three words are unfamiliar to you, I think the concepts will resonate with most farmers.

There is Tikanga, which is an intergenerational principle of doing what is right. In this context, it is balancing what is right for the planet and what is right for the people.

Kotahitanga is unity in the community. Here this means working in unison with the forestry industry, the governments, and international companies that want to remove themselves from petroleum-based products. It’s teaming up for a better solution from NZ for the rest of the world to use.

Mauri is the vital essence or special nature of a being or object. In this case it means respecting the pine tree by using everything and leaving no waste.

I think many rural people will find themselves nodding along to the beat of that drum. Taking care of the land and the community and not wasting natural resources. Sounds pretty similar to the goals of farming.

Three-stage recipe for wood-derived plastic

Step 1: Treat the sawdust with a biodegradable solvent to dissolve the lignin and break up the cellulose.

Step 2: Separate the hemicellulose (who isn’t invited to this party) from the lignin and cellulose with some water.

Step 3: Evaporate the water and mould your cellulose-lignin slurry into your desired shape. Voila! You have a piece of black plastic.

Step 4 (optional): Bury your piece of plastic in the ground and watch the microorganisms compost it.