Construction of a $300 million wood pellet plant in the Eastern Bay of Plenty is expected to start next month, with hopes it could reduce coal use.

Kawerau Mayor Faylene Tunui said Foresta’s proposed wood pellet plant in the Putauaki Trust Industrial Zone would couple economic growth with environmental stewardship - kaitiaki taiao.

The plant, once built, would convert radiata pine into torrefied wood pellets that can be used as an environmentally friendly substitute for coal.

While not quite ready to turn the soil on the plant, Australian company Foresta’s directors and senior management were in Kawerau on Wednesday to give an encouraging progress report to Tunui and Putauaki Trust representatives.

The plant promises to bring more than 50 new jobs to Kawerau while helping decarbonise New Zealand’s energy supply.

Foresta is in negotiations with Genesis Energy to supply pellets for electricity generation at Huntly Power Station and hopes to eventually replace all of the energy company’s coal with torrefied wood pellets.

“We are hoping to kick off works in October,” Foresta head of project development and delivery Alex Johnson said.

The company announced in April last year that it had signed a 30-year lease with a 20-year right of renewal on 9.6 hectares of land in the Putauaki Trust Industrial Zone to build its $300 million plant.

The Foresta plant would use the entire tree, including the currently underutilised stumps and tops of the trees.

It’s hoped this would mitigate the issue of slash left behind by the forestry industry after harvesting.

“Foresta announced that funding, project planning, and contracts for supply and production are all well under way which, thanks to environmentally sustainable production processes, is great news for Kawerau and Aotearoa New Zealand,” Tunui said.

She acknowledged Putauaki Trust for working to secure this significant “anchor tenant” operation in Kawerau on their industrial park, which is already home to Waiū Dairy, another value-added manufacturing operation.

“Economic growth relies on communities, iwi and council collaborating for the benefit of our shared future,” she said.

“The development of the industrial park by Putauaki Trust unlocks huge potential for current and future generations. These new businesses offer new jobs and incomes that can help people raise their families here in Kawerau.”

Kawerau was just the pilot project for Foresta in New Zealand.

The management team said replacing all the coal used in New Zealand would require them to produce 200 tonnes of pellets.

To do that, they would require 11 plants like the one they plan to build in Kawerau.

Executive director Maurice Fabiani said the project was going to plan and the board was fully committed to it.

“We’ve gone beyond the point of no return as far as the company is concerned. All told, there is probably getting close to $30 million that we have invested in this project to get it where we are today.

“We have a long-term vision, and I think it will be wonderful for the community, for the region, and for New Zealand as a whole. At the end of the day, it is going to help decarbonise the nation.”

Johnson said consent had been granted in March through the Government’s Fast Track Approvals Act, and as part of the conditions of the consent, work must take place between September and the end of April.

Further consenting would be required if work overflowed into May.

It was close to finalising contract negotiations with its main contractor, and with Putauaki Trust around enabling works for the site.

Full funding for the project was yet to be secured, but executive chairman Henry Chang said they were hoping to make some public announcements toward the end of September.

Tunui said it was important to think about the footprints that were left behind.

She said 71 years ago, when industries were being developed in Kawerau, it had been about making money at any cost to the environment.

“Our land continues to suffer, and our awa suffered. I am still, in 2025, recognised as the mayor of the town with the black drain.

“Shifting into decarbonisation is the polar opposite of what used to happen here in Kawerau.”

LDR is local body journalism co-funded by RNZ and NZ On Air.