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FAQs
Q. Can I use the Land for grazing once the trees are established?
A. Sheep can be introduced after 2 years as long as there is plenty of grass. In fact this is encouraged to keep grass growth controlled. Small cattle can be introduced after 4 years but the preference is to limit grazing to sheep until the plantation is well established.
Q. Can I sell my leased land that the plantation is on at anytime?
A. Yes, if you sell your property you will retain the equity you have in the plantation up until the time of sale. The new owner will receive ongoing equity in Lieu of lease payments after the sale as per the Radialwood forest property agreement. (FPA)The new owner will be obligated to honour the existing FPA, which will be noted on the land title and gives Radialwood 25 year rights to grow timber on the Land.
Q. Can the plantation be sold to a Third party?
A. Yes, Radialwood reserves the right to on sell its interest in the plantation to a third party at anytime. The landowner agrees that Radialwood has the right to transfer the FPA to a third party under the same terms and conditions of the original FPA. Any equity in the plantation by the landowner will be paid to the landowner pro-rata based on the price paid for the plantation.
Q. If the plantation is sold who will manage it?
A. Under the terms and conditions of the contract Woollybutt will continue as plantation managers, under the control of Radialwood, even if the plantation is sold. This arangement will continue for the life of the plantation unless there is a mutual wish by both parties to change management.
Q. Can the landowner cancel the FPA?
A. The only way the landowner can exit the FPA is if he purchases the plantation at an independent valuation. He has the first right to purchase. This cost is to be picked up by the landowner.
Q. Will the landowner be up for any additional costs?
A. All preparation, establishment initial fertilizing and weed control will be at the expense of Radialwood. On going harvesting will be covered by all equity partners including landowners. If the landowners don' t have money to pay for any of the costs, Radialwood can cover them in exchange for the landowner handing back an equivalent value in equity. This way the landowner would not have to pay a cent over the life of the plantation.
Q. What happens if Fire, Drought or Pests damage the plantation?
A. Insurance can only be taken for fire. Storm, pest, drought and flood damage cannot be covered and is at the risk of the grower. Initially the plantation value is only the cost of establishment which the land owner doesn't have to contribute. As the plantation ages it will become more valuable. If all stakeholders agree at around 5 years a quote on insuring the plantation will be obtained and a policy taken out with the premium being paid for by the stakeholders.
Q. What is Carbon Trading?
A. Climate change is widely regarded as the greatest environmental issue faced by communities across the world. Scientists generally agree that increased greenhouse gas emissions (e.g. carbon dioxide, methane etc) is the main cause of "global warming".
Increasing carbon sequestration(1) and planting new carbon sinks is one way to fight climate change. New and existing plantations (established since 1990) can sequester carbon existing in as carbon dioxide in the atmosphere. Timber plantations that are harvested on a regular rotation (e.g. 20-30 years) can absorb significantly more CO2 over their lifetime than can a perpetual forest (e.g. a revegetation planting that is never harvested) for the following reasons:
1. After harvest timber products continue to store carbon in addition to the new forest that is replanted in place of a recently harvested plantation;
2. Fossil fuel use is reduced by using harvested timber as fuelwood.(2)
3. Timber plantations grow much quicker than perpetual forests (up to 20 times) and therefore sequester more carbon over a given period.
Timber plantations can also sequester carbon more cost effectively than other vegetation options because the cost of establishment is subsidised by the revenue obtained from the harvest.
Carbon brokering companies such as Victorian based "TreeSmart" are leading the way by purchasing carbon that has been sequestered by native plantations established since 1990. This carbon is then purchased by greenhouse gas emitters (i.e. motorists, electricity generators etc) to neutralise their carbon "footprint". The amount paid for carbon depends on the growth rate of the plantation and management regime. For example, fast growing trees managed (i.e. thinned and pruned) for solid wood production will be worth more than poorly managed trees. TreeSmart quote typical returns for carbon to range between $60-120/ha/yr. Annual returns are indexed to growth rate and can be expected to peak at 10-15 years after establishment when plantation trees usually reach their peak growth rate. TreeSmart has indicatively quoted that the proposed SRW site would return an average of ~$100/ha/yr (3). The annual nature of this return improves the performance of the investment significantly.
(1) Sequestration means "storing for safe keeping". It is a term often used to describe the role trees can play in mitigating against climate change.
(2) Unlike all other mainstream heating alternatives firewood is regarded greenhouse positive because the the carbon sequestered during the growing phase outweighs the greenhouse gas emitted during burning.
(3) Tony Richardson, Director of TreeSmart, personal communication.
Q. Who decides if we sell carbon credits to a 3rd party
A. Radialwood will make all plantatation decisions on behalf of the land owner. The good news is if it is a viable option to sell the carbon component of the trees then the landowner will benefit according to the FPA agreement. If it is not considered viable then the trees will be utalised for originally intended and we will be still be a major contributor in fighting global warming!