Niche Markets for Economic Revitalisation of Satoyama Forest ...

2 EXISTING AND EMERGING CHALLENGES
Despite the enormous economic potential of the various
niche markets identified and discussed in chapter one,
there are a number of challenges to be overcome before
the economic revitalisation of satoyama forest resources
in Ishikawa Prefecture can be achieved. The challenges
can be grouped into three dimensions, namely; policy and
institutional; product development and technology diffusion/
proliferation; and market development. A random list of the
issues would include high equipment and transportation
costs on forest thinnings, lack of cost–saving technology for
processing the various wood products at competitive prices
relative to imports, policy and technical issues relating to
carbon markets, market constraints for wood blocks, and
unfavorable national import policy on wood materials.
Many of these issues are identified within the context of
satoyama in Ishikawa Prefecture, but bear similarity to other
local contexts across Japan.
2.1 Challenges Relating to Viability of Market
for Wood Products
Japan has successfully pursued an aggressive policy and
implementation of forest expansion over the last four
decades, and currently has an approximately 70 per cent
forest cover. Over the same period, however, Japan maintained
a highly liberalised import regime on wood products, thereby
undermining the economic development of the domestic
forestry sector, and the prices of domestic wood materials
plummeted under pressure from the imports. The low
prices, coupled with the high costs of wood processing and
transportation in Japan, appear to have eroded the economic
incentive for investors to locally produce timber and forest
thinnings.
Distribution and Processing System for Forest Thinnings:
In order to promote methods for the use of forest thinnings
such as wood block construction, efforts are needed on the
local level to reduce costs in the collection and transport of
the thinnings. Under the current distribution system, it is
often the case that the processor will receive an order from
a housing construction company and will saw and process
raw wood purchased on the market. With wood blocks, it is
generally necessary to dry the wood to less than 20 per cent
moisture content. Drying methods include artificial drying
and natural drying, and while artificial drying possesses are
shorter, they incur drying equipment and fuel costs. While
natural drying does not incur these costs, a two year period
and a very large stockyard are required. If a processor is small
scale and has low production capabilities, product costs will
be high and variability in standards and quality may result.
On the other hand, construction companies that require
large supply sources strongly desire a stable supply of high
quality material at low cost. 33
In response to these needs, forestry associations, the raw
wood market, and processing companies are collaborating to
establish distribution and processing centers at key regions,
and a distribution network with housing construction
companies is starting to form (Agriculture, Forestry and
Fisheries Department, Ishikawa Prefecture Government
edition, 2002). If high quality and low cost wood can be
supplied in a stable manner through performing purchasing,
managing, drying, materials processing, and product control
of raw wood in an integrated and rational manner, an
expansion in the use of forest thinnings, which were largely
avoided by housing construction companies, can be achieved.
These efforts could open the way for further exploration of
new requirements and the development of technologies for
the use of these materials in various fields such as residential
construction technology like the wood block construction
method that utilises forest thinnings.
Establishing Stable Supply:
There are challenges relating to successful scale–up of
small scale, high efficiency plants to provide a stable supply
to meet woody biomass demand, thereby permitting the
development of more robust fuel supply systems, with lower
overall costs. For example, the use of wood pellets for heating
(which effectively utilises various leftover and discarded
materials and are relatively easy to transport), would be
enhanced if uniform demand could be established year–
round. It is, therefore, desirable to develop and introduce
not only stoves for heating, but also functional boilers for
heating water which could meet the large demand from
public facilities and businesses, and if possible, also cater to
residential homes.
2.2 Challenges Relating to Biomass
Reducing Equipment Costs:
Costs associated with the installation and operation
of boilers and stove equipment need to be reduced.
Furthermore, various types of devices and systems to respond
to diverse biomass collection and use must be developed
and introduced. Of these, there is a high need to promote
the development of innovative technologies involving the
gasification and liquification of woody biomass, which is
easier to use and has greater energy conversion efficiency
than direct burning.
Reducing Collection and Transport Costs:
Woody biomass resources are generally located in
mountainous areas and are dispersed over large areas. As
this material is high in volume and weight, the reduction
of costs associated with collection and transportation is an
important challenge associated with promoting biomass
based energy in Japan. Wood collection is considered the
primary reason why wood material remnants, including
forest thinnings, have not been used in energy production
in the country.
The use of high performance forestry equipment to improve
labor productivity and road improvements are considered
important steps in reducing costs (Forestry Agency edition,
2006a). In addition to shortening the distance between
production, processing, and consumption sites the beneficial
use and integrated applications for timber and woody
biomass need to be explored at the local level. It will be
necessary to establish a distribution system and methods
which take into account the balance of demand and
supply of targeted wood resources in specific locations. The
Anamizu–cho gasification power generation system is a
good example.
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