Issue
Does the maintenance of a woodchip stockpile at the site of infield wood chipping in a forest or plantation fall within the definition of 'forestry' in section 35 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
Yes. The maintenance of a woodchip stockpile at the site of infield wood chipping in a forest or plantation falls within the definition of 'forestry' in section 35 of the EGCSA.
Facts
A contractor carries out infield wood chipping in a forest or plantation.
Timber is chipped in wood chipping plant and the woodchips are moved to a stockpile on site prior to transportation out of the forest by truck.
The contractor uses eligible fuel in a front end loader in carrying woodchips from the chipping plant to a stockpile and in organising the stockpile to prevent it from spreading too wide.
Reasons for Decision
The definition of 'forestry' in section 35 of the EGCSA includes, at paragraph (c), the transporting, milling or processing in a forest or plantation of timber felled in the forest or plantation.
Infield wood chipping is the milling or processing of timber in a forest or plantation.
Product Grant and Benefit Ruling PGBR 2005/1 states: 154. We consider that the milling of timber is not limited to the actual subjection of the timber to the sawing or chipping activity at the mill, but it includes activities that are integral to, or necessarily incidental to, the process of milling timber. However it does not include activities regarded as secondary manufacture.
At paragraph 156 of PGBR 2005/1, the ruling states in example 5 that the movement of logs by forklift to a stockpile at a forest mill for drying prior to sawing is necessarily incidental to the process of milling or processing timber, as it is necessary to make the logs suitable for debarking and sawing. The drying process and movement of logs are activities in milling or processing the timber.
In this case, woodchips are carried from the chipping plant by front-end loader and stockpiled on site. Also, the front-end loader is used to organise the stockpile and prevent it from spreading too wide.
Similar to example 5 in PGBR 2005/1, these activities are necessarily incidental to the milling process. Without them, the in-field chipping operation would not be able to function, or function efficiently. They are therefore considered to be activities in milling or processing the timber. Note: This decision does not apply where the stockpile is made at a location other than the chipping site.