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Miscanthus Industry in New Zealand


Miscanthus Industry in New Zealand

Currently there is around 50 ha of Miscanthus established and growing in New Zealand. Its current growing range stretches from the north of the North Island down to Southland and so far it has been established on a wide variety of sites. It has also been established at different times of the year, some of which would seem illogical to traditional growers, with the first serious planting being done in Hawke’s Bay on 1 February 2011. Luckily, with rainfall after planting, this proved to be extremely successful.

Current uses

Use of the harvested Miscanthus product has started off with it being used as fuel for the boiler at the Oji Fibre Solutions mill near Tokoroa.  Use has continued with production of top quality long lasting and labour saving horse bedding.  Considerable research has been done on this use for bedding, particularly for race horses and Miscanthus bedding has shown itself to be superior to alternatives.  The residue from the bedding production process is now being marketed as superior long-lasting mulch but mulch retailers in both the North And South Islands are now also looking at the whole harvested crop which would open up a large market.

Plant growth and development

Growers can begin commercial production at the end of an initial establishment phase lasting two growing seasons.  It then grows annually from its rhizomes in the soil to a height of 3.5 to 4 m.  It is normally harvested during the winter when it has senesced (died back).  In the autumn, it translocates almost all of the nutrients from its leaves and stems down to its rhizomes – storage organs in the ground – and the woody plant dries out.  When it is harvested, very few nutrients are removed so it requires little, if any fertiliser.  It is also quite dry – less than 20% moisture content – when harvested at that stage, so if it is to be used for burning to create industrial heat or renewable diesel, it has a significant advantage over its competing products such as woodchips which can be 50 to 60% moisture content.

Forward purchase contract

MNZ is sufficiently confident about the future markets for Miscanthus that in many cases it can offer growers a forward purchase contract.  This gives them certainty of sale of harvested Miscanthus material that they will produce, thus dramatically reducing their market risk.  Risk reduction is not the only benefit – the other one being that the grower can then have certainty of income, providing they are able to produce the harvested product.

Profitable business

Based on the production levels that MNZ is assuming, which in most cases have proved to be conservative, growers are able to generate a respectable return on the Miscanthus that they purchase and grow. The fact that this revenue has no connection to other agricultural cycles means is that it acts as an insurance against things like poor dairy prices or poor prices for lamb.  The fact that it can generate a good return with almost no inputs after the establishment phase, makes it quite unique in agricultural terms.  International experience had shown that farmers that venture into growing Miscanthus tend to expand their Miscanthus plantings over time because of the income security that it generates.


Because Miscanthus is a perennial plant, once it is successfully established is simply carries on producing harvestable material year after year.  The length of time that this can go on for at a commercially successful production rate is not known simply because it has not been grown on a commercial basis for long enough.  However MNZ staff have seen a 25-year-old Miscanthus stand in Illinois that is still producing at much the same rate that it did 10 and 20 years ago.

Low inputs

Once the crop has been established successfully, there is very little requirement for further inputs other than harvesting.  Some proponents claim that there is no need for fertiliser.  But it is inevitable that no matter how careful the grower is as regards timing of harvest, some nutrients will be removed from the site in the course of harvest.  There will therefore almost certainly be a need for application of small quantities of fertiliser in the future.  This lack of requirement for regular fertiliser is not only an advantage in farming terms.  It also means that when a detailed life cycle analysis of net greenhouse gas emissions is carried out, Miscanthus performs extremely well.  MNZ has access to such a detailed Life Cycle Analysis that has been done independently on NZ Miscanthus.

End Users

Certainty of price

Because an established Miscanthus crop tends to have a reliable production – the minimum amount being dependent almost entirely on the weather during the growing season – growers tend to be happy to have a known market for their product and to be willing to agree on a price going some time in the future, indexed only to inflation, so that they have certainty of income.  This in turn gives the end user certainty of future price – something that is almost impossible with alternative fuels.  The same applies to end uses such as bedding, where certainty of future supply and certainty of future price is an advantage.

Environmentally friendly

As a non-fossil fuel Miscanthus has obvious greenhouse gas advantages over alternatives such as coal or natural gas.  But it has other advantages in that as a perennial plant it provides ecosystem services that most other agricultural crops cannot provide. As well as providing suitable habitat for a variety of species including bumblebees and indigenous skinks, Miscanthus also significantly reduces the leaching of nitrogen from a site, with obvious benefits for water tables and streams.  Nitrogen leaching from a Miscanthus stand looks to be less than from a pine forest.  At the same time, its deep rooting structure means that it holds soil together; the lack of requirement for annual cultivation means that soils are physically protected; and build up of organic matter over time is considerable.  It has been shown in work done by Lincoln University to actually increase the growth of pasture on Canterbury sites as a result of protecting that pasture from drying winds.  The commercial benefits of this to the landowner are clear, but the green credentials that can be claimed by the end user of the harvested product are also very real.

Cost competitive

From the beginning, MNZ has taken the view that for Miscanthus to be commercially successful it must be directly competitive in terms of cost with alternatives.  If used for fuel the price per usable gigajoule has to equal to or better than the price per usable gigajoule of the fossil fuel alternatives.  At the moment, this can be done but it is challenging with the low price of coal.  However the emissions trading scheme is being reviewed this year and with the likely changes that are expected to be made to this scheme, it is expected that this low coal price will change.  The ability of end users to lock in a low but reasonable price for Miscanthus that is being planted this year will give those users a commercial advantage in the future.  When used for bedding, the competing products tend to become in short supply at times – such as drought in Hawkes Bay – and with the significant labour-saving advantages of Miscanthus arising partly from it not having to be changed as often, Miscanthus has shown itself to be extremely cost competitive.  Users also report a huge reduction in horses’ foot problems when they are housed on Miscanthus bedding.  End users who want to purchase Miscanthus for this use will have to move quickly because the supply of this material is currently limited and will only be expanded at a rate that is warranted by firm orders.

Carbon benefits

A full greenhouse gas life cycle analysis has been done by Bioenergy Cropping Solutions Limited on Miscanthus produced in New Zealand.  This has been done in considerably more detail than is the norm so that there was no question about the quality of the analysis.  When used for fuel Miscanthus can demonstrate significant carbon benefits and these can be claimed commercially by end users.  When renewable diesel production begins in New Zealand, because one of the by-products of the process is biochar which is effectively permanently sequestered carbon, this fuel will be carbon negative.  This can go some way to offsetting the perceived greenhouse gas emissions of New Zealand agriculture.

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