Blow for energy proposal

A woodchip mill near Eden plans to build a biomass plant on site, burning waste wood to create electricity both to run the mill and supply the local power grid. Opponents argue that burning wood to create power is no cleaner than burning coal, and more inefficient.

South East Fibre Exports, the company which operates the mill, hopes to pay off the $20 million project by creating renewable energy certificates, which can be sold to businesses which need to compensate for their pollution.

It believes that burning wood waste – which would otherwise rot on the ground and release methane into the atmosphere – is a "carbon-neutral" way of generating power.

But Country Energy confirmed in a letter to an environment group, the South-East Regional Conservation Alliance, that it did not regard the proposed power station as "green power". The utility said it does "not intentionally buy wood waste renewable energy certificates". Origin Energy has also decided not to recognise wood waste as a form of green power.

"The project is still going ahead," said Peter Mitchell, the mill's general manager. "If we had every group in the country saying it wasn't renewable energy, we might have a problem then. But … we will find someone to buy certificates."

Plans for the five-megawatt power pilot plant will be submitted to the NSW Government for planning assessment this year.

"We have the waste wood just sitting around and we burn it off anyway, so we might as well use it to generate power that we can use," Mr Mitchell said.

About 70 per cent of the fuel will come from native forests around Eden, and environment groups believe it will provide an excuse for the forestry industry to cut down more trees while giving the impression it is fighting climate change.

When the carbon-absorbing qualities of trees and undisturbed soil were taken into account, burning them can create more greenhouse gases than coal, said NSW Greens MP John Kaye.