Iran war: Forestry giant wants industry to be ‘critical’ in national fuel plan
Monday, 30 March 2026
One of New Zealand’s biggest forestry companies is joining the call for forestry to be included as a critical industry in the national fuel plan as it deals with the fallout of the Middle East war.
Ernslaw One, a major softwood plantation company and the country's fourth-largest forest manager, has seen its operating costs climb sharply as fuel and freight prices soar in response to a decrease in supply.
The company, which is part of the Malaysian-owned Oregon Group, grows, harvests and exports logs from more than 95,000 hectares of radiata pine and Douglas-fir forests in the North and South Islands.
“Our sector is significantly impacted by the current uncertainty of fuel supply and we are closely monitoring government updates on fuel availability,” Ernslaw One chief executive Darren Mann said.
“Since the conflict began, we have experienced significant upward pressure on freight rates, with a 50% increase in our shipping costs, and bunker fuel for shipping has doubled.”
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Mann says its operations rely on diesel to power machines, including for harvesting in the forest, log transportation to market and shipping and port operations.
Forestry is not singled out as a critical customer under the agriculture category of the national fuel plan, but the company strongly believes it is an “activity of significant economic export value”, he says.
“Without log supply from forestry operations, sawmills will be without the key ingredient they need to produce lumber for New Zealand’s construction sector. The ripple effect through the local economy would be huge.
“Our industry bodies are currently talking with the relevant ministers on this point, and we appreciate the constructive conversations that are underway.”
Mann says that additionally Ernslaw One, and other forest owners, are working with urgency on large windthrow salvage operations after several big storms ripped across the motu over the last year.
With millions of trees on the ground, there is a limited timeframe for recovery before the wood begins to deteriorate and is no longer viable for the market, he says.
“These salvage operations should be prioritised under any future fuel management scenarios.”
While the uncertainty of the fuel supply situation is having a profound impact on forestry operations, the company has managed supply and demand shocks before, he adds.
“We are collaborating with our industry bodies and consulting with the relevant officials to make sure the forestry sector comes through this period in a strong position.”
Dr Elizabeth Heeg, chief executive of the Forest Owners Association, says the sector is grappling with operating costs increasing by 25% due to the fuel crisis.
For some typical harvest operations this equates to an additional $60,000 per month, she says.
“But it is particularly challenging for forestry operations in the Nelson-Tasman and Marlborough regions, which are still recovering from windthrow and severe flooding in recent months.
“Freight is a critical part of the forestry sector, underpinning both domestic sawmills and export markets. Fuel is needed to keep harvesting, transport and wood processing operations running.
The association is concerned that forestry is not explicitly included as a level two critical industry in the National Fuel Plan, Heeg says.
That has led the association and the Forest Industry Contractors Association to write to the ministers of finance, forestry and trade, and resources to ask that the industry be included.
“This is crucial to ensuring an industry that supports more than 40,000 Kiwi jobs can continue to meet export demand,” she says.
“Keeping forestry operating under all fuel plan response settings is essential for regional jobs, supply chain strength, and the wider economy.”