How is NZ’s energy crisis impacting the wood industry?

New Zealand’s pulp and paper industry has lost a pulp mill – and could lose another – to an energy crisis that shows little signs of abating. The Winstone Pulp International (WPI) pulp mill on the Central North Island will close permanently and cease manufacturing Bleached Chemi Thermo-Mechanical Pulp (BCTMP) immediately. 

A second pulp mill, the recycling mill owned by Oji Fibre Solutions at Penrose in the Auckland region, has been proposed for closure by the end of the year, citing energy costs as fundamental to the expected decision. The Penrose mill employs around 75 people and is the sole fibre recycling facility in New Zealand. Oji was quick to point out that its extensive collections would continue, the fibre being shipped to other Oji recycling mills, including most likely the Malaysian operation.

IndustryEdge’s long experience in the pulp and paper industry reminds us no manufacturer likes closing facilities, including because of the impact on the workforce and their families and livelihoods. That means the situation is serious, so, how did it come to pass?

Pulp, paper and energy

At a facility level, and also at a national level, there is no escaping the fact that manufacturing the world’s paper, paperboard and fibre packaging products is energy intensive.

Though energy is used throughout the process of manufacturing pulp and paper, some operations can be self-sufficient for thermal (heat) and electrical energy. These are mainly the chemical pulp mills, where one of the by-products of circular manufacturing and the recovery of chemicals, is abundant energy.

Other facilities are however less self-sufficient, but still energy intensive. This is the case for the WPI mill, which uses energy to produce a ‘mechanical’ pulp and has limited thermal and even less electrical energy outputs. The situation is even more severe for Oji’s Penrose recycling mill, which has little to no capacity to recover or create energy.

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Source: IndustryEdge